Construction and Real Estate - November 2008
Construction and Real Estate
Overall, reports indicated that District housing remained soft in October. However, several District markets continued to note year-over-year gains compared with weak levels from 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. District contacts reported that existing home inventories increased on a year-over-year basis while new home inventories continued to contract. Construction remained at low levels across the District. 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.