Despite encouraging signs that New York City’s residential real-estate market may be emerging from its coronavirus basement, broker confidence has hit a new all-time low, according to two new reports by the Real Estate Board of New York (REBNY) that highlight this disconnect.
The first, the Monthly Investment and Residential Sales Report for June 2020, shows an impressive 56% uptick in tax revenue generated by real estate transactions since May 2020. That reversal of previous declines comes as good news to the financially strapped city, which covers more than half of its annual budget with taxes generated by the real estate industry.
Despite this encouraging news, REBNY’s second report, the Quarterly Real Estate Broker Confidence Index, reveals that broker confidence has hit its lowest point on record for the second quarter in a row. The current real estate broker confidence index is 3.30 out of 10, down from 3.72 last quarter, representing an 11% decrease since the first quarter of 2020 – and a 50% decline since the same time last year. Additionally, the survey results indicate a decline in brokers’ outlook on the future market six months from now. That index is 3.91, an 11% decline from the first quarter of 2020 and a 35% decline since the same time last year. Residential brokers, according to the report, tend to be considerably more optimistic than their commercial counterparts.
“While we are seeing encouraging signs in both the management of our ongoing public health crisis and restarting the economy in New York City, caution abounds in its real estate industry,” says REBNY President James Whelan. “Tax revenue generated by real estate appears to have hit its bottom in May 2020 and may be starting the long road back. Broker confidence – or lack thereof – signals the critical need for the federal government step up to provide the state and local aid required to recover from this pandemic.”
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