The real estate recovery slowed during the late fall and early
winter, according to the FDIC's January quarterly opinion survey. Although
many of the experts polled continued to cite improvements in their local
real estate markets, a slowdown in home sales offset gains in commercial
The nationwide poll of 333 senior examiners and asset managers from
the federal bank and thrift regulatory agencies was conducted in late
January and covered developments during the prior three months.
The proportion of respondents saying housing markets were on the
upswing during the prior three months slipped to 28 percent in January from
37 percent last October. Home sales and existing home sale prices during
the past three months also were cited as lackluster. Even so, positive
opinions of housing market trends still outweighed negative ones by almost
"The survey results do not suggest that housing markets are in a
downturn -- only that they may have leveled off or temporarily stalled,"
said FDIC Chairman Ricki Helfer. "With mortgage interest rates in the
current low range, conditions are favorable for housing markets and
Under the index scoring system used to summarize survey results,
scores above 50 indicate that more respondents thought conditions were
improving than declining, while readings below 50 mean the opposite. The
more the reading goes above or below 50, the greater the proportion of
positive or negative assessments. The composite index covering both
commercial and residential real estate markets slipped from 64 during the
two previous surveys to 60 in January, the lowest level in more than three
years. In general, examiners and asset managers in all regions were less
positive about recent developments in their local real estate markets in
Regarding commercial real estate markets, January survey participants
continued to report a fairly widespread recovery. As in the previous
survey in October, one-third cited gains, while only five percent found
deteriorating conditions. Also, reports of excess supply have been
decreasing steadily for three years.
"The ongoing recovery in commercial real estate markets is making
serious inroads in reducing surplus floorspace left from previous building
booms," Chairman Helfer said. "This may well provide new impetus to loan
demand and future new construction."
The experts polled increasingly characterized their local commercial
real estate markets as "in balance." A record number of market observers
in the Northeast and the South stated this view.
Copies of the Survey of Real Estate Trends are available on the Internet
(via the World Wide Web at http://www.fdic.gov/bank/analytical/survey/index.html), by fax (dial 804-642-0003 on your
fax machine and follow the voice prompts to request Document No. 220), or
by mail or messenger (contact the FDIC's Public Information Center at (703) 562-2200).
Congress created the Federal Deposit Insurance Corporation in 1933 to
maintain public confidence in the nation's banking system. The FDIC
insures deposits at the nation's 12,000 banks and savings associations and
it promotes the safety and soundness of these institutions by identifying,
monitoring and addressing risks to which they are exposed.