From the Federal Reserve:
Economic activity in the Second District has grown steadily since the last report. Consumer prices remain relatively stable, despite some signs of acceleration in input prices and wages. Labor markets appear to have firmed, with reports of a pickup in hiring activity. Retailers indicate that sales were generally ahead of plan in March and early April and that selling prices remained steady. Tourism activity has shown signs of picking up since the last report. Two regional consumer surveys show confidence at high levels, despite retreating modestly in March.
Manufacturers report that activity slowed in March and early April and that profit margins are being squeezed by rising input prices. Housing markets continue to be mixed: prices have edged down and are generally on par with or moderately below year ago levels; however, apartment sales activity has picked up in New York City. Manhattan’s office market tightened further in the first quarter, with asking rents up more than 20 percent from a year earlier, while suburban markets have strengthened modestly overall. Finally, bankers report further weakening in loan demand, slightly tighter credit standards, and a modest increase in delinquency rates on commercial and industrial loans.
The commercial real estate market in metropolitan New York City remained robust in the first quarter. Manhattan office vacancy rates slipped to their lowest levels since 2001 and asking rents were up 20 to 30 percent from a year ago. In addition, the sales market for Manhattan office properties is described as exceptionally strong. Most suburban office markets tightened slightly in the first quarter: in Westchester and Fairfield Counties and on Long Island, vacancy rates edged down and rents rose roughly 5 percent from a year earlier; however, northern New Jersey’s vacancy rate edged up above 17 percent, while rents rose 3 percent.
Housing markets continue to be mixed. New York State Realtors report that statewide sales activity in early 2007 has been moderately lower than a year earlier, while the median sales price was virtually unchanged. A northern New Jersey real estate contact notes that, while many high-end homes (over $1.5 million) have languished on the market, there are pockets of strength for more moderately priced homes. A contact in New Jersey’s homebuilding industry notes that, while homes priced at under $300,000 have been selling well, the overall market remains soft; new home prices are reported to be down from a year ago, and cancellation rates are said to be high, particularly in active-adult (retirement) communities. Finally, Manhattan’s co-op and condo market continued to show resilience in the first quarter: sales activity rose sharply, and the inventory of listings, though still fairly high, continued to decline. However, selling prices for apartments, which had risen moderately throughout 2006 were reported to be virtually unchanged from a year earlier.