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October 2008
Overall, reports indicated that District housing remained soft in September, but several markets noted year-over-year gains compared with weak levels a year earlier. Gains appeared to be largely driven by sales of deeply discounted homes owned by financial institutions, resulting in falling home prices in many parts of the District. This dynamic was most apparent in Florida. Home inventories reportedly declined across most of the District; however, foreclosed properties account for a large share of these properties, particularly in Florida. Construction remained at low levels across the District. Despite more positive news, the outlook remains subdued largely because of weak economic conditions and financing issues.
Commercial development remained weak across the District. Vacancy rates trended up in District markets, 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 during the first half of 2009. Recent data support the view of continued softening in commercial construction activity.
