High prices for downtown office space have induced many new companies to locate in the suburbs. While prices have almost reached their 1980s levels, banks' reluctance to lend for real estate is said to have limited speculative construction. Outside Massachusetts, market conditions are mixed. Some sectors are seeing declining vacancy rates and increasing prices, but others still have high levels of inventory. Retail real estate markets have been strong in most places, mainly due to the mild winter and a successful holiday season.
Contacts report no major new construction projects in their states.
Most respondents are optimistic about the outlook, anticipating steady prices and decreasing vacancy rates during the coming quarter. Nonbank Financial Services Respondents at insurance companies report continued weak sales of life insurance in the fourth quarter and strong sales of mutual funds and variable annuities. Employment moved down slightly in the fourth quarter. Consolidations in the insurance industry are expected to continue in 1997, contributing to further reductions in employment. To comment on this site, please fill out our feedback form.