Commercial and residential real estate markets continued to
show improvement during the late fall and early winter, according
to the FDIC's latest nationwide poll of experts from the federal
bank and thrift regulatory agencies. Reports of declining prices
-- for both existing homes and commercial properties -- were at
the lowest levels since the FDIC survey began in April of 1991.
Also, excess supply of residential and commercial real estate
continues to be whittled down.
"We are pleased to see continued reports of gains in real
estate markets," FDIC Chairman Ricki Helfer said. "Improving
commercial real estate markets benefit banks and thrifts in terms
of reducing problem assets and creating new lending
opportunities. Also, the high marks for residential markets are
good news for lenders and homeowners alike."
The latest quarterly survey polled 297 senior examiners and
asset managers in late January about developments in their local
real estate markets during the prior three months.
Thirty-eight percent of the respondents noted improved
housing market activity, while only eight percent observed weaker
conditions. The five percent that reported decreasing resale
prices was the lowest of any survey to date. Only 25 percent
noted excess supply in local housing markets, among the best
readings to date. In addition, residential construction remained
strong. Eighty-seven percent said new homebuilding was at
average or above-average levels, and 71 percent gave similar
opinions about the construction of rental apartments.
Assessments of commercial real estate markets remained
favorable, with 43 percent reporting better conditions in the
previous three months and 41 percent noting rising prices.
Twenty-five percent noted above-average volume of commercial
sales, the highest of any survey to date.
Regionally, the Northeast continued to receive reports of an
upswing in real estate, particularly in commercial markets, which
were at their highest levels to date. In January, 46 percent
reported gains in commercial markets in the Northeast, up from 39
percent in October.
The composite index used by the FDIC to summarize results
for both residential and commercial real estate markets
nationwide edged up slightly -- to 68 in January compared to 67
in October. Under the FDIC's system, 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.
Congress created the Federal Deposit Insurance Corporation in 1933 to restore
public confidence in the nation's banking system. The FDIC insures deposits
at the nation's 11,547 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.
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. 233), or by mail
or messenger (contact the FDIC's Public Information Center at 800-276-6003 or
(703) 562-2200).
