The Real Estate Board of New York (REBNY) released their Broker Confidence report for the 1st quarter of 2020. What it shows is that due to the pandemic caused by the Coronavirus (COVID-19), broker confidence in New York City is in a sharp decline due to recent governmental orders to shut down businesses which are deemed non-essential and order citizens to shelter-in-place.
The REBNY regularly surveys its residential and commercial brokerage members to measure their confidence in the New York City real estate market now and six months from the same period. The results which are published quarterly have a maximum broker confidence of 10. The survey found that broker confidence for the first quarter came in at a 3.72 out of ten. The number is a 46% decrease from the last time brokers were surveyed in 4th quarter 2019.
In the residential market, brokers surveyed came in with a confidence level of 4.21. This was a 35% decrease from the 4th quarter of 2019. From March 20th, the date on which the government ordered a stay at home order for all workers deemed non-essential broker confidence further dipped to 3.39. The future prospects seems pretty gloomy as well with residential brokers having a confidence of 3.42 for 6 months from March 20th. Residential brokers provided quotes used in the report. One broker believes it has crushed business saying “It is impossible to do deals while our businesses are closed, it’s left the real estate market broken.” Other are optimistic the stimulus will help the market with one broker stating “The FED lowering interest rates to the zero bound and reopening emergency lending facilities should aid in stabilizing the real estate market when businesses are able to reopen.”
In the commercial market, broker confidence was an even lower 3.23 for the first quarter of 2019. Confidence continue to wane on March 20th where it came in at 1.89. The 6 month prospect seems gloomy as well with confidence coming in at 2.04. A few quotes indicated in the report by commercial brokers show the malaise of the industry. One broker stated “COVID-19 has crushed commercial real estate. The retail market was slow before coronavirus, and this enhances and expedites the upcoming recession.” Another broker went on to say “Large majority of retail tenants will be behind rent or forced to vacate. The retail vacancies will significantly impact the value of buildings. The amount of vacancies will bring down asking rents and projected rents, lowering investors’ projections.”
REBNY President James Whelan states “With New York City as the national epicenter of this global public health crisis, it’s no surprise that, along with everyone else confronting the current humanitarian crisis, our industry is deeply shaken. REBNY remains confident that the hardworking men and women of our industry, and all New Yorkers, will weather this storm together, but we will need strong policies at the City, State and federal levels to get our economy back into shape and working for all those impacted by this unprecedented crisis.”
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