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REBNY 3rd Quarter 2015 Broker Confidence Index Report
November 5, 2015
The Real Estate Board of New York’s Real Estate Broker Confidence Index for the third quarter of 2015 is 8.34, a half-point drop from last quarter’s 8.84. Confidence has remained positive. Likewise, confidence in the market six months from now was also positive at 7.87, though dipping more than a half point from 8.52 last quarter.
This slight drop in confidence in the current market and the market six months from now was shared by both our residential and commercial brokers. Concerns about rising interest rates and the lack inventory continue to temper the confidence of the residential brokers in the current market and the market six months from now.
Likewise, the concern about the national and international economy has tempered the outlook of the commercial brokers. Nevertheless, the overall level of confidence of the residential brokers and the commercial brokers remains positive.
The Commercial Broker Confidence Index was 8.85, a slight decrease from last quarter’s 9.47. Similarly, the Commercial Broker Confidence Index in the market six months from now was 8.17, down almost a point from last quarter’s 9.10.
Anticipation of an interest rate increase in the future, its possible impact on job growth and uncertainty about the local, national and global economy, were the key concerns cited which impacted their confidence in the market six months from now. Similarly, the financing market for commercial real estate sales six months from now was an issue that the commercial brokers were most concerned.
The Residential Broker Confidence Index decreased slightly to 7.83 from 8.21 last quarter. Again, the issue of concern most cited was the lack of inventory, specifically in rentals in Upper Manhattan and two-to-three bedroom inventory for sale. The lack of inventory has been an ongoing concern for the past year and a half with our residential brokers. On the contrary, brokers point out that the Brooklyn market is experiencing an inventory boom as is Long Island City, which has experienced strong price growth.
Nevertheless, residential broker confidence continues to remain positive despite the different assessment of the market in Manhattan and the other boroughs. Likewise, the uncertainty of interest rates left many residential brokers unsure of the market six months from now; some believe that the increase in rates may trigger more sales, while others think that the rise will reduce sales. Confidence in the market six months from now dipped to 7.58, from 7.93 last quarter. This has been the lowest index for the market six months from now since our reporting began in 2013.