Florida Housing Market Dominates Federal Reserve Report
Overall, business activity grew at a modest pace throughout November-December in the Federal Reserve’s Sixth District, although officials made note of continued weakness in the housing market, especially in Florida.
According to the Orlando Business Journal, the Sunshine State reported the largest declines in sales and new home construction throughout the Sixth District, which comprises Alabama, Florida, Georgia, along with parts of Louisiana, Mississippi and Tennessee.
While Florida mortgage demand languished, sales were mixed in the whole district, although the inventory on the market remained high across much of the region. Most real estate agents reported price reductions on existing homes for sale, while there were some reports of price declines scattered in parts of the district as well.
Non-residential real estate development in the district remained at healthy levels, and commercial real estate markets showed signs of improvement late in 2006 as office occupancy and rental rates increased, according to the report.
Residential home loan demand also remained weak in most parts of Florida and the Southeast, the report said. Banking conditions stayed stable and overall credit quality was good, there were some reports of increases in consumer loan delinquency in parts of the district.
Reports concerning the overall economy were generally positive, with some officials familiar with the Florida housing market noting that the 2006 holiday season was stronger than last year and business is protected to rise considerably in the first quarter of 2007.
Most retailers said sales in December rose modestly compared with a year ago, too. The region’s auto sales, often linked closely to housing sales, were below year-ago levels in most areas, however. The slowdown in real estate building also affecting producers of building materials.
The Fed also said hiring trends remained positive, while reiterating its belief that mortgage rates will remain at current levels as the risk of inflation has been kept at bay, barring unforeseen issues in employment energy prices.