The economist who came up with the Consumer Confidence Index in the 1960s struggled for years to get anyone to take it seriously. But eventually business people came to regard the survey asking people how they feel about the future as a valuable metric for decision-making.
These days, confidence surveys abound. And the one taking New York residential and commercial brokers’ temperature shows they are hopeful — even more so than before the pandemic.
The Real Estate Board of New York’s confidence index hit 56 for residential brokers and a record-high 36 for commercial brokers, up from negative 24 and negative 60, respectively, a year ago.
In the third quarter of 2019, residential brokers’ confidence was at a 12 while commercial brokers’ confidence was 20. The previous high for commercial brokers was 33 in the quarter immediately before the pandemic (proving, perhaps, that the metric is not perfect).
Commercial brokers’ confidence shot up from 21 in the second quarter while residential brokers’ mark dipped from its record high of 60 last quarter.
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REBNY’s survey uses a scale of -100 — uniformly negative responses — to 100 — uniformly positive responses. A score of 0 would indicate an equal number of brokers responding with positive and negative sentiment. Previous versions of the survey used a zero to 10 scale.
Despite the optimism, uncertainty still hangs over the market, particularly for commercial brokers. Office employees remain inclined to work from home, and tourism, especially international tourism, continues to lag.
“Some of neutrality has to do with not really understanding yet the new normal. How will we work?“ one respondent said in the report. “This is a market still very much in flux – though the improvement we are seeing is the result of [recovery from] the Covid shutdown.“