NY Broker Confidence Hits Highest Level Since 2019

In Q1 2021, broker confidence increased 53% in New York City, rising for the second straight quarter after hitting record lows at the height of the pandemic.

According to the Real Estate Board of New York (REBNY) Q1 2021 Quarterly Real Estate Broker Confidence Index, the overall real estate broker confidence index is 6.66 out of 10. That is its highest level since Q4 2019 and a 79%-increase year-over-year.

Present situation broker confidence increased 55% since Q4 2020 to 5.25. That is the highest level since the pandemic began and an 85% increase year-over-year. “This surge in broker confidence is happening alongside encouraging signs in our city, the overall economy, and particularly the real estate market where commercial and residential market activity are exhibiting clear signs of momentum,” said REBNY President James Whelan in prepared remarks. “It is critical to seize this moment so that New York comes back stronger than ever.”

Brokers are even more optimistic about the market’s trajectory and the industry’s recovery. The future broker index is at its highest level since Q3 2015, hitting 7.71. This quarter’s future broker confidence index increased 52% since the previous quarter and increased 76% year-over-year.

The commercial broker confidence index jumped 96% in Q1 to 5.65. REBNY says that is a 75% increase year-over-year and its highest level since Q4 2019. CBRE reports that leases for 2.9 million square feet were signed in Q1 2021, which was the best quarter of leasing activity since the start of the pandemic. CBRE also found that four times as many tenants were searching for space compared to the year before.

Given that background, it’s no surprise that commercial broker confidence jumped. Future broker confidence increased 98% from last quarter and last year at this time to 7.27.

Residential broker confidence hit 7.66 in Q1 2021, an 82% increase year-over-year and its highest level since Q1 2016. In a recent report, Douglas Elliman indicated that new leases in Manhattan jumped 89% year-over-year in March. That kind of growth will give residential brokers high hopes for a market rebound.

Future residential broker confidence rose 26% from the fourth quarter of 2020 and 61% since the first quarter of 2020 to 8.15. That is the highest level it has been at since the first quarter of 2015.

Further strengthening the case for a New York recovery in both commercial and residential is the fact many businesses stayed in place through the pandemic, according to an analysis from Cushman & Wakefield.

Typically, C&W experts say, gateway cities are on the leading edge of recessions, with office fundamentals declining but recovering more quickly than the rest of the country. And historically, the gateway cities of Boston, Chicago, LA, New York, San Francisco, and Washington, DC have accounted for 44% of all office leasing in the US.  In 2020, that number went to 41.5%, a percentage C&W says is still within the normal range.