QUARTERLY SURVEY FINDS REAL ESTATE STILL RECOVERING BUT AT A SLOWER PACE
FOR IMMEDIATE RELEASE
The broad-based recovery in real estate markets is
continuing but at a somewhat slower pace, according to the latest
quarterly survey from the FDIC. Weaker housing market trends
were the key factors in the results of the nationwide poll of
federal bank and thrift regulators conducted in late January.
The latest survey covered developments during late 1994 and early
The FDIC's composite index, covering commercial and
residential real estate markets, stood at 62 in the January
survey. This indicates that many markets are continuing to
improve. However, the composite index is down from the 67
recorded in the October 1994 poll. This latest survey also marks
the third consecutive decline in the composite index, after
peaking in last April's survey at 78.
Under the index scoring system used to summarize the 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
"Many real estate markets are still improving, but the
recovery in general has lost some steam," FDIC Chairman Ricki
Tigert Helfer said. "The recent slowing has been concentrated
in housing markets, no doubt reflecting the effects of rising interest rates on home buying and construction."
The poll found that only 32 percent of respondents in
January cited an improvement in local housing markets. That is
the lowest percentage since the FDIC survey began in April of
1991. Nonetheless, the latest survey also shows that housing markets are still in relatively good shape. For
example, only 28 percent of the respondents reported an excess
supply in their local housing markets, among the best readings
Thirty-eight percent of those surveyed in January cited
gains in commercial real estate activity during the previous
three months, the lowest proportion in more than a year but still
far above the four percent who said conditions had worsened.
Just over half the respondents in the most recent poll observed
an excess supply in local commercial markets -- a vast
improvement over two years ago when 84 percent saw oversupply.
"The experts across the nation continue to report positive
developments in many commercial real estate markets," Chairman
Helfer said. "Vacancy rates have fallen in several areas of the
country, and the strength of the economy apparently has
businesses looking for more floor space."
Composite findings differed little among regions of the
U.S. Readings in the South and in the Northeast were a bit more
positive than the average, while those in the Midwest were
somewhat below average primarily due to a noticeable softness in
The FDIC quarterly survey polls senior examiners and asset
managers from the federal agencies about developments in the
local real estate markets they track. For the latest survey, 407
participants were asked in late January about developments during
the prior three months.
Copies of the latest Survey of Real Estate Trends are available in the lobby of the FDIC's headquarters at 550 17th
Street, NW, Washington, and from the Office of Corporate