From the Federal Reserve:
Economic activity in the Second District has remained generally flat since the last report, while labor markets continue to tighten. Selling prices were little changed, while service-sector firms report continued upward pressure on wages and other input prices. Manufacturers report further weakening in activity, and service-sector firms also note some recent contraction. Consumer spending has been steady to up slightly in early 2016, while tourism activity has remained sluggish. Residential real estate markets showed scattered signs of softening, while commercial real estate markets were little changed. Multi-family residential construction has held steady at a high level, while commercial construction has weakened. Finally, banks report a pickup in loan demand from the commercial sector but further weakening in household loan demand, and little change in delinquency rates.
Construction and Real Estate
The District’s housing markets were stable to slightly softer in early 2016. In western New York, housing activity has reportedly slowed somewhat, in line with normal seasonal patterns, while contacts are optimistic about the outlook for the upcoming spring season. Statewide, sales activity was steady at an elevated level, while selling prices remained flat and little changed from a year earlier. Similarly, home resale prices are reported to be essentially flat in northern New Jersey, while both sales activity and inventory levels are characterized as low. One building industry contact notes that home renovation activity has been increasing, and that sub-contracting business seems to be robust.
New York City’s co-op and condo sales market has slowed somewhat since the beginning of the year, with both prices and activity down modestly from late-2015 levels. The city’s residential rental markets have also been somewhat softer. Rents on Manhattan apartments have been steady to somewhat lower so far this year, while rents in Brooklyn and Queens have increased at a slower pace than in 2015. A major New York City appraisal firms also notes that the high end of both the purchase and rental markets has been particularly sluggish, reflecting excess supply; a similar pattern prevails for high-end rental markets across the District more broadly.
Office markets have been stable across the District, with both availability rates and asking rents little changed since the beginning of the year. New office construction has weakened further; a good deal of new office space is under construction in Manhattan but little is in the works across the rest of the District. Single-family construction has generally remained sluggish, while multi-family development has been robust. In northern New Jersey, most of the recent apartment construction has been rental buildings, whereas in New York City, it has been largely condos.