On average, contacts are slightly more optimistic about their outlook now than in July. Two areas of concern, however, are the effects that a downturn in the stock market would have on the default risk of corporate bonds and the implications of possible changes in the health care system on health insurance markets. Residential Real Estate Residential real estate markets in New England are said to be slowing. Although most contacts report active markets, they cite several signs of slowdown. Sales are starting to drop, especially at the high end.
Contacts attribute the decline to lower demand, partly as a result of changes in the stock market.
A Massachusetts contact indicates that the number of detached houses and condominiums sold in the Commonwealth dropped by 11 and 6 percent, respectively, over the year ending in second quarter 2000. Vermont contacts cite lower demand and rising inventories of new homes, especially at the higher end of the market. Inventory in other states, however, remains very low. New Hampshire and Rhode Island report very low inventory levels and active markets. Most contacts expect sales to slow further during the winter and prices to remain flat.