Broker confidence slips again in 2016

Resi agents feeling rosier than commercial counterparts: REBNY
By Rich Bockmann | May 09, 2016 05:45PM

Rising interest rates, a slumping global economy and concerns over the presidential election have shaken real estate brokers’ confidence in the market, particularly those working in the commercial sector, according to a new report from REBNY.

For the fifth straight quarter in a row, overall confidence among the city’s brokers – both residential and commercial – declined, falling about 8 percent during the first quarter to a score of 7.23 on the Real Estate Board of New York’s Broker Confidence Index. Residential brokers were much more optimistic than their commercial brethren, the survey found.

“The ongoing transition in our nation’s leadership has contributed to apprehension surrounding decision-making and uncertainty for the future of the real estate market and economy,” REBNY President John Banks said in a statement. “While this builds on concerns about future interest rates and inventory, our brokers maintain a positive outlook overall with healthy market demand and the growth of New York City jobs.”

Anticipation over rising interest rates and concerns about new office space flooding the market drove commercial brokers’ confidence down for the third-straight quarter to 6.36. That was the first time since REBNY started reporting confidence in 2013 that the index fell below 7.

“Too much new space coming available at rents that are too high,” one broker responded. “Too many tenants shrinking.”

Some on the commercial side, however, did express confidence in the city’s prospects for job growth.

On the residential side, confidence ticked up slightly again for the second quarter in a row to 8.1 on the index.

Despite a slowing luxury market, brokers seemed confident in the city’s economy and said enough buyers still have plenty of financing and cash.

“My clients are buying because the NYC economy is good, they have good jobs, and interest rates are low,” noted one residential broker. “Some slowing in residential price growth will be good for the NYC residential market.”