Brokers Keenly Aware of Risks to Economic Recovery
NEW YORK, NY – The Real Estate Board of New York (REBNY), the City’s leading real estate trade association, today reported that broker confidence in the current real estate market remains high despite risks on the horizon.
According to REBNY’s Q3 2021 Quarterly Real Estate Broker Confidence Index, the Current Conditions Index (CCI) for commercial brokers rose to 36.11 in Q3, up from 20.81 in Q2. For residential brokers, the CCI remained high at 56.29, though it saw a slight decline from the record high of 60.04 posted in Q2 2021.
However, uncertainty over the future has grown, as the Expectations Index (EXI) for both the residential and commercial sectors declined from Q2 2021. For commercial brokers, EXI dropped significantly from 52.50 in Q2 to 37.26 in Q3. Residential brokers also saw a decrease in EXI, from 55.79 in Q2 to 45.88 in Q3. While the indexes fell for both sectors, residential brokers are generally more optimistic, reflected in scores that are 10 to 20 points higher than in the commercial sector. Commercial brokers have gained confidence as leasing picks up in both the retail and office sectors, particularly in boroughs outside of Manhattan. Demand is also intensifying in Manhattan as tenants capitalize on discounted fully built space options. Residential brokers are understandably more consistently hopeful about the direction of the market – sales have more than doubled compared to 2020, with nearly $20 billion in residential properties changing hands in the first half of 2021.
Brokers’ concerns about the future are driven by the continued risks posed by the COVID-19 pandemic. At the same time, brokers are also waiting to see how the transition in City government will impact issues important to the industry.
“While the third quarter saw the real estate industry help lead the City forward on its path to economic recovery, this report highlights the work that still needs to be done,” said REBNY President James Whelan. “It’s imperative that the incoming City administration and the private sector continue to work together on issues critical to the City’s economic success such as improving public safety, creating good jobs, producing much-needed housing and safely welcoming back tourists.”
REBNY’s Quarterly Real Estate Broker Confidence Index, New York City’s only broker confidence report, surveys REBNY’s residential and commercial brokerage members to measure their confidence in the New York City real estate market across the five boroughs. Launched in 2012, the index benchmarks key data and insights from the real estate industry to track critical economic indicators such as activity from renters and buyers, pricing and political climate. The survey captures broker attitudes about current market conditions as well as their projections on market conditions six months ahead. Survey results are published quarterly and include overall commercial and residential broker confidence indexes. The Index uses a scale of -100 (uniformly negative responses) to 100 (uniformly positive responses) with a score of 0 representing either uniformly neutral responses or an equal number of brokers responding with positive and negative sentiment.
Download the complete Q3 2021 Quarterly Real Estate Broker Confidence Index here.
For more information about REBNY research reports, visit go.rebny.com/Reports.
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