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Luxury firm Engel & Völkers Americas has launched a new monthly market sentiment index based on data provided by real estate professionals within the Engel & Völkers Americas network across the U.S., Canada, Caribbean and Mexico, the company announced on Thursday.
The Engel & Völkers Real Estate Sentiment (EVRES) Index will provide a monthly score from 0-100 of market sentiment, which will help support the firm’s strategy across the Americas. About 250 responses are collected each month from the firm’s real estate professionals.
Engel & Völkers first started gathering data for the index in March 2023 but is now releasing it publicly for the first time.
Andrew Dinsmore | Credit: LinkedIn
“The Engel & Völkers Real Estate Sentiment Index was initiated to generate a clear understanding of how our network of real estate professionals felt about the market to help us build out planning scenarios, resources and projections,” Andrew Dinsmore, CFO of Engel & Völkers Americas, said in a statement.
“We are excited to publicly share the results for the first time with the larger industry as our data and analytics teams have been able to leverage the EVRES Index to project market activity and identify key trends that are shaping the industry.”
The EVRES Index calculated a score of 64 for sentiment towards the residential real estate market in the Americas during the month of April, Engel & Völkers reported. Sentiment remained largely flat on an annual basis from the score of 67 recorded by the firm in April 2023. It was slightly down from a peak of score of 70 seen in February 2024. The Index’s lowest point thus far was in November 2023, when the Index bottomed out at 47.
Engel & Völkers noted that the Index has been in flux in recent months with buyers gradually gaining more confidence and adapting to shifts in the market as the traditional spring buying season approaches. Still, although buyer confidence and the Index have been on a positive trajectory, inventory, affordability and market uncertainty remain challenges.
“2024 kicked off with so much optimism across the real estate industry as more buyers planned to enter the market,” Dinsmore continued. “April’s results indicate there is a stabilization of positive sentiment during the beginning of the year. At this point, we are seeing that consumer concerns around rising mortgage rates, limited inventory and economic uncertainty are leading to growing hesitancy among consumers.”
Sentiment was most optimistic across the South and Southwestern U.S., which the luxury firm attributed to a boost in inventory and growing pockets of high-net-worth buyers. The Southwest in particular has seen increased positive sentiment from well-priced properties and new construction.
Northeastern and Northwestern markets in the U.S. saw the greatest decline in sentiment, which was down in each region by 13.5 percent and 14.1 percent month over month respectively, as high demand, low inventory and high mortgage rates impacted the market.
Canada remained a bright spot in the index, as the eastern part of the country has seen growing activity since January and more buyer optimism with the anticipated lowering of interest rates by the Bank of Canada within the next month. In Western Canada, seller confidence has also driven optimism in the market, yielding a sentiment score of 70.8.
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