In a report released on January 28, NYC-based trade association the Real Estate Board of New York (REBNY) notes that after three consecutive record lows, confidence among the city’s real estate brokers appears to have rebounded in the last quarter of 2020, as the COVID-19 vaccine continues to roll out throughout the City and State.
According to REBNY’s Q4 2020 Quarterly Real Estate Broker Confidence Index, the current real estate broker confidence index is 4.35 out of 10 - a 41% increase since its lowest point on record in the previous quarter. Additionally, the future broker confidence index is 5.07 - a 44% increase from the third quarter of 2020, suggesting that brokers feel the market has already bottomed out and is beginning its slow road to recovery.
Allowing that improving access to rapid testing sites and a successful, broad-based rollout of the COVID-19 vaccines will be critical in determining how quickly business and economic activity will return to pre-pandemic levels (or at least somewhere close), the report asserts that “Broker confidence rebounding at the end of 2020 illustrates that the industry has an increasingly positive view that we can overcome the immediate challenges we face,” chief among them vaccinating all New Yorkers, making it safe for them to participate in all facets of life in the city - economic and otherwise.
The uptick in broker optimism is not limited to residential activity; according to the report, “In the fourth quarter of 2020, both residential and commercial brokers witnessed an increase in confidence compared to the previous quarter. The Residential Broker Confidence Index increased 45% between Q3 and Q4 to 5.81 and the Commercial Broker Confidence Index increased 34% from Q3 to 2.89.”
“There has been a spike in activity over the past few weeks, where the reasonably well-priced properties that have been sitting are now seeing significant activity and even getting multiple offers,” said one residential broker surveyed. “There seems to be a sense that the worst is over, and that things will begin to improve in the market over the coming months.”
To be sure - there’s still plenty of trepidation and uncertainty in both commercial and residential sectors; as mentioned above, the Q4 improvement in industry morale arguably reflects more of a bounce than an upward-trending rocket. For example, additional key findings from the Q4 2020 Quarterly Real Estate Broker Confidence Index report include:
- The overall broker confidence index in Q4 declined 37% year-over-year. Compared to Q4 2019, the commercial broker confidence index decreased 60% and the residential broker confidence index decreased 10%.
- The overall present situation broker confidence this quarter declined 51% year-over-year. Compared to Q4 2019, the commercial broker present situation confidence index decreased 76% to 1.83 and the residential broker present situation confidence index decreased 20% to 4.95.
- The future broker confidence index this quarter declined 26% year-over-year to 5.07. Compared to Q4 2019, the commercial broker future confidence index decreased 47% to 3.68 and the residential broker future confidence index decreased 3% to 6.45.
REBNY’s Quarterly Real Estate Broker Confidence Index is New York City’s only broker confidence report, surveying the trade organization’s residential and commercial brokerage members to measure their confidence in the New York City real estate market across the five boroughs. Launched in 2012, the index benchmarks key data and insights from the real estate industry to track critical economic indicators such as activity from renters and buyers, pricing and political climate. The survey captures broker attitudes about current market conditions as well as their projections on market conditions six months ahead. Survey results are published quarterly and include overall, commercial and residential broker confidence indexes. The report includes a maximum index of 10, with zero indicating the least confidence and 10 indicating the highest confidence. An index value above five indicates that broker sentiment is more positive than negative.
Download the complete Q4 2020 Quarterly Real Estate Broker Confidence Index here.