Wednesday, September 06, 2006

Beige is the new black

The Federal Reserve released the September Beige Book this afternoon. The full report can be found here:

Summary of Commentary on Current Economic Conditions

Second District--New York

Economic activity in the Second District has shown signs of decelerating since the last report, though business contacts generally report that the labor market remains steady and strong. Manufacturers report widespread increases in input prices; they also note further deceleration in business activity and are a bit less optimistic about the near-term outlook. Retailers indicate that sales were on or close to plan in August, while prices were relatively flat. Tourism activity was mixed around generally robust levels: New York City hotels continue to report strong revenue growth, but Broadway theaters report that attendance, though still high, retreated in July and August.

Both new home construction and the home purchase market continued to slacken in July and August, but Manhattan's apartment rental market reportedly strengthened further. Office markets across the New York City metro area were steady to stronger in July and August while the market for industrial space was mixed. Activity in the securities industry activity is reported to have weakened across the board in July and August. Finally, bankers again report widespread slackening in loan demand, somewhat tighter credit standards, and little change in delinquency rates.

Construction and Real Estate
The region's housing market has slackened further since the last report, with the notable exception of Manhattan's rental market. Housing permits have weakened markedly in recent months, with July particularly soft. Based on the first seven months of the year, single-family permits in the New York-New Jersey region are on track for their weakest year since 1996. Multi-family permits, though down in recent months, remain at relatively high levels. More currently, New Jersey homebuilders report that the inventory of homes on the market continued to increase in August, and that market psychology has worsened. Builders have begun advertising price reductions on new properties instead of merely offering concessions. Nonetheless, an industry expert notes an increasingly large gap between asking prices and offers, which has caused inventories to swell.

Manhattan's co-op and condo market slowed further in July and early August. The inventory of homes on the market is reported to have risen noticeably, and units are staying on the market for longer. Both the number of transactions and total sales volume were down from a year earlier in August; the high end continues to be the most active market. At the same time, Manhattan's rental market was characterized as increasingly robust in July and August, across the board, but especially at the high end of the market: The inventory of available units has continued to shrink, rents are up, and prospective renters are signing leases more quickly than in the recent past.


Blogger grim said...

From Inman:

Federal reserve banks report weak real estate market

Most Federal Reserve Districts across the country reported declines in home sales and construction activity, "substantial increases in the inventory of unsold homes" and a general expectation of continued weakness in the housing market, according to an informal review prepared by the Federal Reserve Bank of New York.
he Philadelphia, Cleveland, Atlanta and Kansas City districts reported that housing market were expected to continue to remain weak, "if not weaken further." The Kansas City district reported that "sizable numbers of foreclosures" contributed to a rise in unsold inventory.

New York, Richmond and Kansas City districts reported flat or declining home prices, and decelerating prices were reported in the Philadelphia and San Francisco districts.

The high-end real estate market was described as particularly weak in the Richmond, Chicago and Kansas City districts, according to the report, and in parts of the Minneapolis district. Meanwhile, the high-end real estate market in the Dallas area and the high-end co-op and condo market in the New York district "were reported to have experienced less softening than the more moderately priced segments."
Credit quality was generally described as good, with little change in delinquency rates, "though a few noted scattered increases." The New York and Philadelphia districts reported an increase in delinquencies on home mortgages, and Cleveland noted a slight increase in commercial delinquencies. Credit standards were reported to be holding or slightly tighter.

9/06/2006 03:17:00 PM  

Post a Comment

<< Home