Market Activity, Vaccination Rates Key Factors in Renewed Optimism After Broker Confidence Hit Record Lows in 2020
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 real estate market increased for the second consecutive quarter after hitting record lows in the height of the pandemic.
According to REBNY’s Q1 2021 Quarterly Real Estate Broker Confidence Index, the overall real estate broker confidence index is 6.66 out of 10, a 53% increase since the previous quarter.
Additionally, the future broker confidence index is 7.71, the highest level it has seen since Q3 2015 – signaling that brokers have renewed optimism about the market’s trajectory and the industry’s recovery.
“This surge in broker confidence is happening alongside encouraging signs in our City, the overall economy, and particularly the real estate market where commercial and residential market activity are exhibiting clear signs of momentum,” said REBNY President James Whelan. “It is critical to seize this moment so that New York comes back stronger than ever.”
In the first quarter of 2021, the commercial broker confidence index witnessed a 96% increase since the previous quarter to 5.65. This marks a 75% increase year-over-year and its highest level since Q4 2019.
Recent commercial market activity released by CBRE illustrates why commercial brokers are more confident in the market. According to CBRE’s report, Q1 2021 experienced the best quarter of leasing activity since the start of the pandemic, with 2.9 million square feet signed.
“Additionally, CBRE’s report found that the number of tenants active in the market is growing, with the total as of April 2, 2021 more than four times higher than one year before,” said Nicole LaRusso, Senior Director of Research & Analysis, NY Tri-State at CBRE.
For the commercial real estate sector, this is a leading indicator that leasing activity will continue to improve, thus boosting brokers’ optimism in the overall state of the market.
On the residential side, broker confidence increased 82% year-over-year 7.66 in Q1 2021, its highest level since Q1 2016. This growth is supported by a new report from Douglas Elliman showing that new leases in Manhattan jumped 89% year-over-year in March, providing residential brokers high hopes for a market rebound.
“Our New York City brokerage has seen written business surpassing $1 billion every month for the past 3 months,” said Douglas Elliman President and COO Scott Durkin.
Additional key findings from the Q1 2021 Quarterly Real Estate Broker Confidence Index report include:
The overall broker confidence index increased 79% year-over-year.
At 6.66, overall broker confidence hit its highest level since Q4 2019.
The present situation broker confidence this quarter increased 55% since Q4 2020 to 5.25, its highest level since the pandemic began. This represents an 85% increase year-over-year.
The future broker confidence index this quarter increased 52% since the previous quarter and increased 76% year-over-year.
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 report includes a maximum index of 10, with zero indicating the least confidence and 10 indicating the highest confidence. An index value above five indicates that broker sentiment is more positive than negative.
Download the complete Q1 2021 Quarterly Real Estate Broker Confidence Index here.
For more information about REBNY research reports, visit go.rebny.com/Reports.
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