WASHINGTON (MNI) – The following is the second part of the text of
the Federal Reserve’s Beige Book survey Fifth District summary,
published Wednesday:
Real Estate
Residential Realtors in the District gave generally upbeat reports
on house sales. While the tax credit program remained the single most
important motivating factor, one Realtor told us that sales over the
past three months had outweighed all of his 2009 sales and that only
18-20 percent of the buyers had taken advantage of the tax credit. House
prices were mixed across the District. For example, prices rose in
Fairfax and Greensboro, held steady in Greenville, and were relatively
flat in Richmond. Notable decreases in prices were reported in
Washington, D.C., where a significant increase in sales of lower-priced
properties were reported, and in Fredericksburg, where a Realtor stated
that, \banks seem to be willing to take anything within reason to
reduce their holdings of foreclosed properties.. Commercial real estate
activity picked up slightly since our last report. Most contacts
generally reported an uptick in leasing activity, particularly in the
office and industrial sectors, while activity in the retail sector
remained sluggish. Effective rental rates decreased somewhat as
landlords became more aggressive in offering concessions. Vacancy rates
were generally high, although vacancy rates in some local markets did
improve. Sales activity continued to be hampered by stringent bank
requirements and a scarcity of creditworthy buyers. However, one contact
reported that property sales increased somewhat due to foreclosed
properties being purchased at very low prices. While contacts reported
very little new construction over the past few weeks, some activity was
reported on the industrial side for some build-to-suit projects and some
bidders continued to submit proposals at low or no profit just to keep
their doors open.
Tourism
Assessments of tourist activity improved somewhat since our last
report. Along the coast, contacts noted somewhat stronger bookings,
compared to our last survey. An analyst on the Outer Banks of North
Carolina said that bookings for the Easter weekend were looking good
with advanced rentals up 10 percent over last year. A manager from
Myrtle Beach indicated that last-minute bookings had picked up, which he
attributed to the recent warm weather and steep discounts on special
packages at most hotels. Managers at mountain resorts throughout the
District reported one of their best ski seasons ever.both in terms of
business activity and revenues.and mentioned that vacationers were
booking early and staying close to home. Finally, the 98th annual
National Cherry Blossom Festival in Washington, D.C., is off to a good
start and is expected to attract record crowds.
Labor Market
Fifth District labor markets remained soft over the past several
weeks, but declines in some sectors eased. Job cuts subsided at retail
businesses, and employment was unchanged at most other services firms as
well as in manufacturing. A West Virginia automobile dealer increased
hiring, and a retailer reported that he was only replacing workers, but
continued to give raises. Average wages edged higher in March in the
service sector, but declined slightly in manufacturing. Contacts at
temporary employment agencies reported generally stronger demand for
temporary help since our last report. Reports from some agency clients
indicated that, while they saw an increase in business, they remained
unsure how long it would last and opted to continue using contingent
labor. However, one temporary agency reported that clients were now
filling positions that had been eliminated at the depth of the economic
downturn.
Agriculture
Although drier weather prevailed in recent weeks, wet fields
continued to hinder plantings and field preparation in many areas of the
District. Indications of delayed fertilization of winter grains and
forage seeding were evident in some areas. In Virginia, grain farmers
attempted to fertilize their wheat and barley fields, but were forced to
wait for drier weather. In addition, hay was still being fed to
livestock in many areas of the state. Nevertheless, winter wheat was
reported to be in mostly fair-to-good condition in South Carolina and
West Virginia. In addition, drier weather during the first week of April
allowed farmers in South Carolina to plant corn at a rapid pace.
Finally, results of our recent survey of agricultural credit conditions
indicated that farmland values were above the previous quarter and
year-ago levels.
(2 of 2)
** Market News International Washington Bureau: 202-371-2121 **
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