The Real Deal New York

NYC broker confidence dips slightly in Q2

Concerns over interest rates and inventory are to blame
July 31, 2015 08:00AM

New York City brokers’ confidence dropped ever-so-slightly in the second quarter of 2015, though attitudes have largely remained on an even keel for the past two years, according to the Real Estate Board of New York’s latest broker confidence report.

The small dip was attributed to concerns over interest rates, especially among residential brokers, as well as lack of inventory. The overall measure for Q2 was 8.84, down from 9.05 in the year’s first quarter, though unchanged from one year ago.

“Our survey found that brokers are slightly less confident in the market six months from now, which is largely due to interest rates,” said John Banks, president of REBNY. “This seems to be a more significant concern for the residential brokers whose activity is more directly impacted by changes in rates.”

On the commercial side, broker confidence was at 9.47, slightly up from last quarter’s 9.24. Brokers said that employment growth was the main reason for their sunny outlook.

“Job growth continues to be the most significant driver of future market performance. [The] market is ‘cooling’ a bit, but there is still velocity (and urgency),” said one broker.

The residential broker confidence index decreased to 8.21 from 8.86 last quarter. Brokers cited low inventory, especially of two-bedroom apartments, as an ongoing source of worry. Concern over interest rates also led brokers to feel uncertain about the market six months from now.

However, brokers were optimistic about robust sales volume and increased demand, especially in Brooklyn and Queens. — Tess Hofmann