- For all brokers, assurance levels at the close of 2015 stood at 7.87, which is a .47 fall from the prior quarter. In the Fall, faith in the market was higher at 8.34.
- The drop is attributed to commercial broker confidence cuts, which went from 8.85 to 7.88 between quarters.
- Residential brokers were more optimistic regarding the short-term and six-month forecast for New York City. Agents’ confidence for six months from now rose from 7.58 to 7.90 between quarters.
- A few residential agents specifically commented on the shortage of mid-market properties available, mentioning the need for housing options between $1.25 and $4 million that still offer a “quality” product – well-appointed, but not overly lavish.
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Although confidence in the real estate market dipped almost half a point in the fourth quarter of last year amongst all brokers, residential brokers’ certainty rose from 7.83 to 7.85, according to the REBNY 4th Quarter Broker Confidence Index Report.
For all brokers, assurance levels at the close of 2015 stood at 7.87, which is a .47 fall from the prior quarter. In the Fall, faith in the market was higher at 8.34.
REBNY also surveys confidence in the market six months down the road: Overall, brokers outlook dipped .3 points since the prior quarter in 2015, from 7.87 to 7.57 at the end of 2015.
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The drop is attributed to commercial broker confidence cuts, which went from 8.85 to 7.88 between quarters. Commercial brokers’ confidence in the market six months from now also declined .93 points quarter-over-quarter.
The primary causes behind the lack of assurance in commercial real estate surrounded the interest rate increases seen in late 2015, which caused many agents to worry about jobs and the economy. Potential issues with financing was another apprehension for commercial agents worried for their retail and business clients.
“Our brokers are mindful of the potential impact of increased interest rates on future business decisions and questioning the sustainability of this extremely long and generous market cycle. Nevertheless, they remain positive on the City’s growing residential and commercial demand and standing as a safe haven for investment,” REBNY President John H. Banks III said in a prepared statement.
Residential brokers were more optimistic regarding the short-term and six-month forecast for New York City. Agents’ confidence for six months from now rose from 7.58 to 7.90 between quarters.
Yet, for-sale and rentals agents still cited concerns, including strong development in Brooklyn that could weaken the Manhattan rental market. A recent report revealed Brooklyn is the most inflated housing market in the U.S., with median income residents forced to allot 98 percent of their incomes on median-priced homes. According to real estate experts, the wide disproportion is due to multi-million dollar condominiums and rentals saturating the Brooklyn market and escalating property values rapidly.
Like commercial agents, residential brokers shared fears that rising interest rates combined with “buyer fatigue” could weaken demand. Residential brokers also stated the lack of inventory in New York City is slightly disconcerting.
A few residential agents specifically commented on the shortage of mid-market properties available, mentioning the need for housing options between $1.25 and $4 million that still offer a “quality” product — well-appointed, but not overly lavish.
Some developers have already taken note, including Magnum Real Estate Group, Toll Brothers and Extell Development Co., who plan to deliver luxury units within reach. Sales on Magnum’s Luminaire and 389 E. 89th St. are due to start this month.
