Commercial and residential real estate markets showed
continued improvement during the early spring of this year,
according to the FDIC's latest nationwide survey of experts. In
addition, opinions about real estate sales volume and excess
supply indicated that real estate markets are continuing to
rebound.
"Our surveys have shown steady improvement in real estate
markets since early last year," FDIC Chairman Ricki Helfer said.
"We are pleased to report these gains; however, we urge banks not
to relax their credit underwriting standards based solely on
reports that real estate markets are continuing to improve."
The FDIC's latest quarterly survey polled 309 senior
examiners and asset managers in federal banking and thrift
agencies. They were asked in late April about developments in
their local real estate markets during the prior three months.
Assessments of commercial real estate markets remained
favorable. Forty-nine percent reported that market conditions in
April were better than three months earlier and only two percent
reported worse conditions. Forty-eight percent noted rising
sales prices in these markets and two percent reported decreasing
sales prices. The proportion characterizing the volume of sales
of commercial properties as above-average rose for the fifth
consecutive time, to 27 percent in April from 25 percent in
January. Also, the 22 percent citing excess commercial space was
down from the 35 percent a year earlier.
Forty-four percent noted improved housing market activity
since the last survey, while only six percent observed weaker
conditions. The proportion of respondents noting above-average
sales volume rose to 41 percent, up from 33 percent a year
earlier. Also, the 19 percent noting excess supply in
residential markets was down from 27 percent a year earlier. In
addition, 89 percent said new homebuilding was at average or
above-average levels, and 75 percent gave similar opinions about
the construction of rental apartments.
Regionally, respondents from the West were the most positive
about commercial real estate activity, while respondents from the
Northeast reported improvements in residential real estate
activity.
The composite index used by the FDIC to summarize results
for both residential and commercial real estate markets
nationwide increased to 71 in April, up from 68 in January.
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.
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 11,452 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.
