On A Scale Of 1-10, NYC Commercial Brokers' Confidence Is Below 2
New York City brokers feel less confident in the current and future state of the real estate market than they ever have before.
Overall commercial broker confidence averaged 1.94 out of 10 this quarter, down from 3.72 out of 10 last quarter and 73% lower than Q2 in 2019, according to the Real Estate Board of New York’s quarterly Broker Confidence Index report, released Thursday.
“Broker confidence — or lack thereof — signals the critical need for the federal government [to] step up to provide the State and local aid required to recover from this pandemic,” REBNY President James Whelan said in a release.
The average quarterly index is only slightly higher than the day Gov. Andrew Cuomo announced the state would shut down on March 20, when the daily average was at 1.89 out of 10.
Brokers are more confident in the future, the report shows, with the index at 0.89 out of 10 of confidence in the current situation and an index of 2.72 out of 10 for the future situation, a number that shows the future outlook has dimmed from last quarter.
In their general written comments about the market, brokers cited “declines in disposable income” and “the inability to cold call” as reasons for their rating.
“The current political unrest and lack of coherent policy from the federal government will negatively impact economic growth and makes New York City unattractive to offshore investors,” one broker responded.
While confidence has been shattered, an increase in sales volume reveals that the market is moving again. Investment sales volume increased fivefold from May to June, with nearly $1.5B in June, up from less than $240M in May 2020, according to REBNY’s monthly Investment and Residential Sales report, also out Thursday. June’s total is still a 55% decline year-over-year, with property tax revenue down 83%, the report shows.
Brokers told Bisnow in May that many of their peers would not make it through the pandemic. Though real estate viewings were deemed inessential during the shutdown, many brokers were still giving tours of properties they were marketing, citing either ignorance of the rules or a need to drive business.