Broker Confidence Drops As Political Turmoil, Interest Rates Cloud Future
Real estate brokers are less confident in New York City's property industry over the next year than they were at this point three months ago, a sign that interest rate increases and continued political turmoil are putting a strain on the optimistic-by-nature broker class.
The Real Estate Board of New York Broker Confidence Index, a quarterly survey of the city's residential and commercial brokerage community on the current state of the market, was 5.53 out of 10 in Q2 2018, a decrease of 0.25 from Q1, the group announced Thursday.
Brokers' confidence in the future of the market — six months from now — dipped to 5.18, compared to 5.47 at the end of 2017. That number is the lowest REBNY has recorded since it began the survey in 2014.
“As federal policies have taken effect, local real estate markets have been seeing their impact on buyer hesitancy and seller uncertainty,” REBNY President John Banks said in a statement. “Despite these conditions, New York City real estate brokers remain positive overall about the present situation and future real estate market.”
Commercial brokers' confidence increased year over year, from 5.94 to 6.43, but they also took a dimmer view of the future.
“Combination of end of [the venture capital] cycle, rising interest rates, and lack of political certainty are all negatively impacting [the] market,” a commercial broker told REBNY in the survey. "Moreover, the WeWork's of the world have created a false supply/demand balance. Had those companies not existed, the market never would have seemed as strong."
Residential's anxieties over oversupply and the buying and selling dynamics have tanked residential brokers' confidence in the present market and the future to numbers well under 5, which REBNY says indicates a negative view of the market.
