The Federal Reserve, in it’s most recent “Beige Book” said Residential real estate markets in most Districts remained weak, but many reported signs of improvement.
The report said that Minneapolis and San Francisco Districts cited large increases in home sales compared with 2008 levels, and other Districts reported rising sales in some sub-markets. Of the areas that continued to experience year-over-year sales declines, all except St Louis–where sales were down steeply–also reported that the pace of decline was moderating.
In general, the low end of the market, especially entry-level homes, continued to perform relatively well; contacts in the New York, Kansas City, and Dallas Districts attributed this relative strength, at least in part, to the first-time home buyer tax credit. Condo sales were still far below year-before levels according to the Boston and New York reports.
The Fed’s report on the performance of entry-level homes is consistent with the reports and data we have seen from the National Association of REALTORS(R). Also consistent with the NAR data was the Feds report on home price declines saying, in general, home prices continued to decline in most markets, although a number of Districts saw possible signs of stabilization.
The Boston, Atlanta, and Chicago Districts mentioned that the increasing number of foreclosure sales was exerting downward pressure on home prices. Residential construction reportedly remains quite slow, with the Chicago, Cleveland, and Kansas City Districts noting that financing is difficult.
The Beige Book refers to the commentary on current economic conditions that the Federal Reserve Board publishes 8 times a year. To gather information and data for the report each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The report comments on many segments of the economy including consumer spending, tourism, manufacturing, etc…All I report and comment on is the residential real estate part of the report. To read the entire commentary click here.
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