Brokers’ Optimism in NYC Real Estate Market Hits Record High: REBNY Report

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Real estate brokers’ confidence in New York City’s market and its future hit record highs in the second quarter of this year, according to a new report from the Real Estate Board of New York (REBNY).

REBNY survey found residential brokers were more optimistic about current market conditions and expectations in the next six months than in any quarter since 2017, while commercial real estate brokers were more positive than any quarter since the first quarter of 2019. 

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That optimism is driven by the Big Apple’s comeback, according to the report. 

“This renewed and record-level optimism exhibited by brokers this past quarter is driven by increased vaccination rates and the return of domestic tourists and entertainment throughout the city, indicating that a strong recovery is underway,” James Whelan, REBNY’s president, said in a statement. 

The city is entering an economic recovery, as domestic tourists creep back to Fifth Avenue and Times Square, according to the report. Weekly hotel demand in the city hit a high point in July since the pandemic began, with nearly half-a-million room nights sold the week of July 12, as Commercial Observer reported. 

Growing confidence in the residential market as more people get vaccinated and apartment-hunters seeking bargain deals have pushed a sales recovery forward, too, the report said. The multifamily market is reflecting that recovery, with sales up 57 percent in the second quarter, CO reported.

“Now is the time to build on this momentum with a focus on further boosting vaccination rates and adopting smart public policies that drive our recovery forward,” Whelan said.

The commercial sector has not recovered as quickly as the residential market, according to the report. While the city’s retail market has warmed up, it’s still dragging behind pre-pandemic levels with a high number of vacancies, CO reported. And everyone is watching the long-awaited return to work and its impact on the commercial real estate market, but the post-Labor Day office homecoming is seeming less likely.

A growing list of companies — including large tech firms like Amazon, Apple and Google  have delayed their return to work, waiting out an uptick in coronavirus cases, due in part to the more-contagious delta variant, the dominant strain of the virus in New York city as of last week.

But, a return to work is still underway in the Big Apple. Only a quarter of managers and professional employees called in to work from home in July, Bloomberg reported. As the return to work progresses, brokers are turning their attention to public safety, public transit, legislation and preventing another outbreak of the coronavirus as key issues in supporting the city’s recovery. 

“There is a consensus that retention of residents and businesses, rising tourism and an accelerated return to the office will go a long way towards addressing quality-of-life issues like sanitation and crime,” the report said. “The longer these issues linger unresolved, the more likely it is that confidence indexes will fall. More critically, any surge in COVID-19 variants would depress the outlook.”

Celia Young can be reached at cyoung@commercialobserver.com.