Construction and Real Estate - August 2008
Construction and Real Estate
Overall, reports on District housing remain soft. However, falling home prices, particularly in the existing home market, appear to be spurring sales. Both home builders and real estate agents noted that bankruptcies and short-sales were putting downward pressure on prices. Home sales in July remained at low levels, but growth rates continued to hold steady or trend upward across much of the District. Construction remained at low levels across the District, and new home inventories continued to contract by most accounts. Despite more positive news, the outlook remains subdued, in large part because of weak economic conditions and financing issues.
Commercial development remained weak across the District, most notably in Florida markets. Vacancy rates were trending upward in District markets, and developers continued to report fewer backlogs. Contractors noted that credit tightening and rising costs were curtailing activity. Most commercial contacts anticipate 2008 will be weaker than 2007, and the degree of pessimism has grown from earlier in the year. Several contacts anticipate weakness will persist into 2009. However, recent data indicate that the outlook for activity over the next six months will improve in Florida markets while softening elsewhere in the District.