Thursday, September 8, 2011

The Local Conditions

The Fed's Beige Book, with its periodic look at economic conditions in eight separate regions around the country, arrived yesterday, and its examination of our area here in New Jersey was somewhat dispiriting. Economic growth is still "sluggish," and even before Irene hit, "manufacturing reported steady to weakening activity."

There was a dollop of good news, though. Retail sales and tourism activity were both pretty solid, at least until the hurricane hit. The residential real estate market has been stable for existing homes, and the commercial real estate market is even starting to rebound, with both office and industrial spaces showing some signs of improvement. In northern New Jersey, the industrial vacancy rate was at its lowest level in two years.

One thing to watch for the housing market: The Beige Book reports that foreclosures have been weighing down the residential market, which comes as no surprise to those of us who live here. But the processing of those foreclosures is proceeding ahead now, which might temporarily depress home prices but should also mean more sales and a reduction of housing inventory on the market.

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