Fed's 'Beige Book' offers snapshot of housing markets
Most areas of U.S. remain soft or weak
Friday, June 15, 2007
Reports from the nation's 12 Federal Reserve banks show continuing weakness in residential real estate and construction, with most districts characterizing housing markets as soft or weak, and no districts reporting an increase in new home construction.
The latest "Beige Book" report -- a summary of comments the Federal Reserve has received from businesses including real estate firms and mortgage bankers -- provides anecdotes and observations that go beyond statistics in describing market conditions around the nation.
Atlanta District
Most builders and Realtors reported new- and existing-home sales remained below year-ago levels in the Atlanta district, which encompasses Alabama, Florida, Georgia, and parts of Louisiana, Mississippi and Tennessee.
Reports suggest that home sales stabilized at low levels in parts of Florida in April and May, but declined in Georgia. Most contacts continued to report that both new- and existing-home inventories were up from a year ago, and that asking prices were being lowered. New-home construction remained below year-ago levels across most of the region.
The majority of housing contacts continued to expect home sales and construction to be weak for the next several months. Higher mortgage delinquencies were noted in some parts of the district.
Hiring remained positive on balance during April and May, although there were reports of layoffs in the construction and real estate services sectors, especially in Florida.
Home builders were reportedly letting go the least qualified workers that they had hired during the housing boom. However, demand remained strong for skilled construction workers such as electricians, plumbers, and heating and air-conditioning technicians.
Contacts in the health-care industry continued to observe shortages of healthcare professionals, and strong demand for skilled workers was noted in the defense and aerospace industries. In some areas, attracting and retaining low-skilled workers in the retail and hospitality industries was said to be difficult because of the high cost of housing.
The district's longer-term manufacturing outlook brightened with several new announcements. Hyundai announced a $270 million engine plant expansion in Montgomery to build four-cylinder engines for the North American car market. Honda announced a $64.5 million expansion at its Lincoln, Ala., facility. ThyssenKrupp AG said it will build a state-of-the-art steelmaking complex near Mobile, Ala. The $3.7 billion plant is expected to have 2,700 employees by 2010.