Confidence in local real estate markets dropped slightly this summer but remained strong, the Federal Deposit Insurance Corp. said Monday.

The agency's quarterly real estate survey found that optimism slipped from May through July for commercial and residential markets. It declined most in the Northeast and West, the survey found.

But officials emphasized that confidence levels were near the record highs reached in April, and real estate prices, sales, and construction remained robust.

"I would not interpret this as the beginning of a downward trend," said John P. O'Keefe, chief of the FDIC's economic analysis section. "The regional trends are consistently good. These are very, very minor fluctuations."

The 299 senior examiners and liquidators surveyed in late July gave the real estate market a score of 77, down 2 points from the record high of 79 in April.

A score above 50 indicates that a majority of regulators thought conditions in their markets were improving. A score below 50 indicates the opposite.

Confidence in the commercial market fell 3 points to 75 in July, and declined throughout the country, the FDIC said.

About half of the examiners surveyed, 52%, said their local commercial market had improved from the prior three months, when the commercial index hit a seven-year high. One in ten said their local market was "a lot" better than in the previous three-month period.

Mr. O'Keefe said this was evidence that commercial markets remain vigorous.

"For a relatively high proportion of respondents to come back in July and say things were better than three months earlier is pretty impressive," he said.

There were regional differences. More than two-thirds of examiners in the West, 69%, said local commercial markets had improved. By contrast, only 40% of Midwestern examiners said the same about their markets.

The supply of commercial real estate shrunk in three of the four regions, and 24% of examiners said supply was tight in their respective local markets. That compares with 21% in April.

In the Northeast, the percentage who called the commercial supply tight doubled to 28%. But Western markets, where the percentage was 31%, remained the tightest.

Other commercial real estate indicators were mostly positive. Across the United States, 89% of those surveyed said vacancy rates were at or below average, 71% said commercial real estate prices were rising, 46% said sales volume was higher than average, and 44% said demand for office space had increased since April.

The residential real estate story was more mixed. The national index fell 2 points to 79 in July, the second-highest quarterly score on record. But the West and the Northeast accounted for all of the drop, while the South and Midwest remained unchanged.

The residential markets score for the West declined to 81 in July from 87 in April. For the Northeast, the score dropped to 85 from 89. Still, for the West and Northeast, 53% and 34% of examiners respectively said residential markets were tight.

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