U.S. Property Market Survey Shows Strength

The Federal Deposit Insurance Corp.’s national index of residential and commercial real estate markets rose last month, showing sustained confidence over the last three months.

The FDIC survey of 298 federal examiners and asset managers at federal banking and thrift agencies rose to 72 in January from 71 in October and 68 in January 1997.

The index, which tracks changes in real estate market conditions around the country, indicates confidence if it scores above 50.

“Contributing to the favorable observations of housing market conditions were reports of strong home sales and a tight housing supply,” the FDIC said. “Home sales have been buoyed by low mortgage-interest rates and high consumer confidence.”

Among the respondents to the January survey, 49% said local housing conditions were improving compared with 42% in October and 38% in January of last year.

In addition, 60% said they observed rising home prices in their areas, up from 48% the previous January.

In contrast, the number of respondents expressing confidence in the local commercial real estate market dropped, to 49% from a record-high 54% in October.

Excess inventory of commercial real estate was down, as were vacancy rates, the FDIC said. Thirty-seven percent cited below-average vacancy rates, up from 33% last October.

Regionally, the West led with a composite index at 84, followed by 79 for the Northeast, 71 for the South and 62 for the Midwest.