Existing home sales softened in December, according to business contacts and recent data releases. Contacts indicated November home sales got a boost from the deadline imposed by the initial housing stimulus, but momentum stalled somewhat in December. Existing home sales in December remained above weak levels a year earlier, while new home sales were generally even with year-earlier levels. Contacts continued to report downward pressure on home prices, and builders in particular reported that competing against foreclosed homes remained difficult. Construction remained at very low levels across much of the District. The outlook among Realtors for sales over the next three months improved sharply on a year-over-year basis, while builders expected more modest improvements.
Commercial development remained weak across the District. Vacancy rates remained elevated, and contacts continued to note downward pressure on rents. Reports indicate that commercial construction has begun to stabilize at low levels, and activity will remain weak for the remainder of the year.