Amid concerns over the nation’s political future and global instability, the city’s real estate brokers are tempering their optimism about the real estate market, according to a report released Monday from the Real Estate Board of New York — but that might be good news for would-be buyers and renters.
There’s been a “slow, steady decline” in confidence in the real estate market ever since the fourth quarter of 2014, REBNY’s Real Estate Broker Confidence Index found.
Overall broker confidence for the market in the second quarter of this year was 7.8. Looking ahead six months from now, confidence drops to 6.47.
This is down from a high of 9.23 in 2014, which is when the real estate trade group began surveying its brokers, taking the temperature of the market by asking them to assess the current situation and share their expectations for the next six months.
“Uncertainty is rising among the residential and commercial brokers who participated in our latest survey,” John H. Banks, III, REBNY president, said in a statement. “While their softened confidence is reflected in the index, both groups maintain cautious optimism for the current and future New York City real estate market.”
Residential brokers cited concerns that local buyers are delaying purchases because they anticipated price drops, while foreign buyers are more cautious due to Brexit and other turmoil around the world.
“With such an uncertain outlook, prices will not increase, and will start to decrease, as the volume of sales decreases," one broker warned.
Residential brokers were worried about the possibility of rising interest rates and the continued lack of sales inventory, but others noted that the lack of sales inventory created more competition. In the rental market, on the other hand, some predicted a glut, which has been pushing prices down.
Buyers looking for properties under $1 million may not see as much of a cooling-off trend, one said.
Commercial brokers were feeling even more glum than residential brokers — as retail shops move away from brick and mortar and toward an online shopping-centric model.
Still, there were some points of optimism for commercial brokers as stores shift from traditional shopping centers and malls to more mixed-use urban areas — and the tech sector remains active.
And brokers said the lure of New York City may be strong enough to survive any downturn.
“I don't think any of the above issues will divert a buyer who wants to live in NYC. Some people don't let outside issues stop them from living their life.”