Broker confidence in New York City peaked in the fourth quarter of 2014 and has been consistently trending down on a quarterly basis, according to the Real Estate Board of New York (REBNY).
REBNY’s Broker Confidence Index in the second quarter survey dipped to 7.04, a fall of 0.19 points from 7.23 in the first quarter. The three-year-old index peaked at 9.23 less than two years ago.
REBNY President John H. Banks III says New York City brokers are “cautiously optimistic” due to the local and global constraints weighing on the real estate market.
Residential brokers’ inventory concerns
REBNY / Broker Confidence Index Quarterly Results
On the housing side, residential brokers are concerned over rising interest rates and tight supply, REBNY says. Some U.S. buyers are hesitant to invest because they anticipate prices to drop, while foreign buyers are reeling over economic episodes like Brexit.
The residential broker confidence index dropped to 7.23 from 7.92 in the first quarter of 2016. Despite inventory remaining low, some brokers view low supply as a chance for competitiveness among buyers.
At the same time, the upcoming Presidential election is waning confidence, REBNY says, as many are cautious of how the market will respond come November.
Commercial broker confidence dips in retail
Some commercial brokers are viewing global instability with strong assurance, stating that foreign volatility is likely to have a positive impact on U.S. real estate investments.
REBNY / Broker Confidence Index Quarterly Results
Despite this, retail leasing has dropped in favor of online marketplaces, where storefronts aren’t obligatory. Traditional shopping centers in NYC are less favorable as urban and mixed-use retail spaces gain traction.
Tech office demand has boosted activity, allowing commercial retail leasing to stay afloat. However, government regulations limit the ability of banks to finance transactions, causing friction for the industry.
The descent of REBNY’s index was largely driven by commercial brokers, whose individual index slumped to 6.57, with expectations for the market in the next six months at 5.71.
