Construction and Real Estate - June 2008
Construction and Real Estate
Overall, reports on District housing continue to indicate weakness in the District's housing markets. However, several reports also suggested that sales may have stabilized in some markets. Reports from Florida in particular are more positive. May existing home sales in Florida continued to note more modest sales declines than seen in more than a year. Inventory levels remain high across much of the District, but homebuilders in particular appear to have made some headway in reducing inventories. Downward pressure on home prices continued to be noted across the region, and construction remains subdued.
Commercial development remained weak across the District, most notably in Florida markets. Vacancy rates were trending up in several markets, and developers reported less construction backlog. Most commercial contacts anticipate 2008 will be weaker than 2007, and the degree of pessimism has grown from earlier in the year. Material prices continued to rise while more contacts also noted rising labor costs. Several contacts anticipate weakness will persist into 2009. However, data on construction potentials indicated that the outlook for activity over the next six months improved in District markets outside of Florida while further weakening was noted in Florida.