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March 2009
Overall, District housing remained weak in January; however, several Florida markets continued to note gains compared with weak levels a year earlier. Sales appear to be largely driven by deeply discounted homes owned by financial institutions, resulting in falling home prices in many parts of the District, particularly Florida. Construction remained at low levels across the District. Contacts did note a pickup in buyer interest and traffic, but the outlook remains subdued.
Commercial development weakened across the District. Vacancy rates trended up, with greater availability of sublease space in some areas. Developers continued to report fewer backlogs, and more projects were put on hold. Contractors noted that tight credit and economic weakness were curtailing activity. Most commercial contacts anticipate weaker activity for 2009, and concern is growing that 2010 will be very challenging. Recent data support the view that commercial construction activity will continue to soften.
