As America wakes up to a new president this morning, New York City brokers are breathing a sigh of relief after blaming election drama for dragging down business.
Whether Donald Trump or Hillary Clinton wins, most hope the end of the campaign for the White House will mark the start of renewed confidence in the real estate market.
“This election cycle has put pressure on brokers’ optimism despite the sustained health of the real estate market in New York City,” said John H. Banks, III, REBNY president.
“Their uncertainty is being affected by ongoing economic and governmental issues that have impacted the pace of decision-making on a local and national scale.”
According to the Real Estate Board of New York’s (REBNY) latest Broker Confidence Index, concerns over the nation’s political future and the presidential election drove down confidence in the third quarter of 2016.
Drops in both the commercial and residential broker indices have contributed to the slow and steady decline in overall broker confidence in the current market and market six months from now.
Both indices hit their lowest points this quarter following a downward trend, which started after the fourth quarter of 2014 when the Real Estate Broker Confidence Index hit an all-time high and the first potential candidates began exploring their run for presidency.
Concerns about the country’s political future and bank regulations have continued to influence the outlook of the commercial brokers.
Some voiced their apprehensions sensing a slowdown in the retail market due to the industry’s transition to web-based services. Others expressed that government regulations and lending are affecting banks’ abilities to finance transactions, which are delaying their closing times. Despite this quarter’s drop in confidence, some commercial brokers are optimistic about the future. One commercial broker predicted, “There should be a bounce in activity after the election.”
Concerns among residential brokers include softening in the rental market and uncertainty for the presidential election.
“The rental market is slowing down due to the amount of new development on the market, causing landlords of older properties to expect similar rental rates, which is not achievable,” said one residential broker.
Another commented, “Several clients have put off selling and/or buying homes until after the election, most likely until 2017 to see how the market plays out.”
Some brokers mentioned that domestic buyers are lagging on committing to transactions because of the election, while foreign buyers have also grown more cautious due to the election and international economy.