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Second Quarter 2015 Real Estate Broker Confidence Index
July 30, 2015
The Real Estate Board of New York’s Real Estate Broker Confidence Index for the second quarter of 2015 is 8.84, a slight drop from last quarter’s 9.05 and virtually unchanged from a year ago. Confidence has remained relatively stable, not fluctuating more than half of a point in the past two years. Likewise, confidence in the market six months from now also dipped slightly to 8.52 this quarter from 8.88 last quarter. This slight drop in confidence in the current market and the market six months from now was the result of the dip in confidence among the residential 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. Nevertheless, the overall level of confidence of the residential brokers and the commercial brokers remains exceptionally positive.
The Commercial Broker Confidence Index was 9.47, a slight increase from last quarter’s 9.24. Likewise, the Commercial Broker Confidence Index in the market six months from now was 9.10, up from last quarter’s 8.92. Brokers gave credit to employment growth as a key factor for their positive outlook on the market. Anticipation of an interest rate increase in the future and uncertainty about some aspects of the global economy, particularly the Greek and Chinese economies, 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 6 months from now was an issue that the commercial brokers were most concerned.
The Residential Broker Confidence Index decreased slightly to 8.21 from 8.86 last quarter. Again, the issue of concern most cited was the lack of inventory. This has been an ongoing concern for the past year and a half, especially low inventory of two bedroom apartments. Nevertheless, residential broker confidence continues to remain high despite this persistent concern. Likewise, the uncertainty of interest rates left many residential brokers unsure of the market six months from now. Confidence in the market six months from now dipped to 7.93, from 8.82 last quarter. This has been the lowest index for the market six months from now since our reporting began in 2013. Despite the reduction in confidence in the market six months from now, brokers were very positive about robust sales volume and the growing popularity of new neighborhoods and increased demand, especially in Brooklyn and Queens. They anticipate that this popularity will result in a strong pick up in new development and increased inventory in the long run.