From the Federal Reserve:
The Second District’s economy has picked up, growing modestly since the last report, and labor markets remain tight. Contacts note continued moderate pressure on input prices and wages but little change in selling prices overall. Manufacturers report a modest rebound in activity, while service-sector businesses indicate a slight increase. Consumer spending was little changed, on balance, and tourism activity has remained sluggish. Residential real estate markets were mostly improved but weaker at the high end, while commercial real estate markets were steady to stronger. Residential construction has tapered off, whereas commercial construction has picked up. Banks report further strengthening in loan demand and continued improvement in delinquency rates.
Construction and Real Estate
The District’s housing markets have been mixed since the last report, with widespread signs of weakness at the high end of the market. New York City’s rental market has shown further signs of slackening: rents have been flat to down slightly in Manhattan, while they have continued to edge up in Brooklyn and Queens. In all these areas, rents on larger units have declined. Vacancy rates across the city, though still low, have moved up, and landlord concessions (e.g., free month’s rent, waived fees) have reportedly grown more widespread.
New York City’s co-op and condo resale market has strengthened somewhat–mainly in Brooklyn and Queens, where prices are up 8-10 percent or more from a year ago and sales volume has picked up as well. Manhattan resale prices are up roughly 5 percent from a year ago, with most of the rise on smaller apartments, while sales volume has receded from high levels. The inventory of resale units remains low, while the inventory of newly developed apartments for sale, mostly luxury, is reported to be high.
Elsewhere across the region, resale activity for single-family homes has picked up across New York State and in northern New Jersey. A real estate contact in the Buffalo area characterizes the local housing market as particularly robust and notes strong demand for downtown properties. There has also been a strong pickup in sales volume in suburbs around New York City, though prices have held steady. Residential construction has tapered off throughout most of the District, in both the multi-family and single-family sectors.
Commercial real estate markets have been stable to somewhat stronger through mid-year. Office availability rates edged up in Manhattan; despite a pickup in leasing activity, a large amount of space coming onto the market was not fully absorbed. Elsewhere, office availability rates were steady to down slightly; across upstate New York, they were at multi-year lows. New office construction has picked up in New York City but remains sluggish across the rest of the District. Industrial real estate markets strengthened further–particularly across the New York City metro region–with asking rents continuing to climb briskly and vacancy rates falling to their lowest levels since before the recession. New factory and warehouse construction picked up in the second quarter.