Magazine article American Banker

Real Estate Picture Brightest in 3 Years

Magazine article American Banker

Real Estate Picture Brightest in 3 Years

Article excerpt

WASHINGTON -- Delivering the second consecutive quarter of record-breaking results, the Federal Deposit Insurance Corp. on Monday released its survey of commercial and residential markets across the country.

The good news covered the country, extending from the Northeast to Southern California.

With its best findings on real estate in three years, the FDIC's survey solidifies the upswing in real estate markets. As these assets rebound, bank balance sheets are strengthened and future earnings should increase.

Survey Prompted by Downturn

The FDIC started its survey in early 1991 when bad real estate loans were plaguing the industry. Every three months the agency asks about 450 examiners and liquidators to gauge the market's health. A composite score covers both commercial and residential markets.

On a scale of 0 to 100, a score over 50 means examiners see real estate markets improving. Below 50 means markets are declining. The closer to 100, the more agreement there is that real estate markets are getting better.

The composite score for February through April was a record 78, up from the previous record of 73 reported in January.

'Robust Housing Recovery'

The residential index soared five points to 82 from 77 in January, breaking the previous record set in April 1992.

"These survey results leave no doubt that a robust housing recovery is under way," said James L. Freund, chief of industry and financial analysis in the FDIC's research division. …

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