The residential real estate market remains dim nationwide, with only faint glimmers of light in a few Federal Reserve Districts, according to the latest Beige Book.
The Federal Reserve said anecdotal evidence from the Boston, Atlanta, Minneapolis, and Dallas Districts reported an increase in home sales over the previous year’s weak levels, but the Atlanta District’s uptick was concentrated in Florida.
The remaining Districts all reported stable or slower sales from the previous Beige Book survey period ending July 27 as the foreclosure backlog and unemployment continues to weigh heavily on housing.
The Federal Reserve’s Beige Book, published eight times per year, examines current housing and other economic conditions based on boots-on-the-ground, anecdotal information from bank and bank branch directors, key business contacts, economists, market experts, and other sources.
The latest September 7 Beige Book, prepared at the Federal Reserve Bank of Kansas City is based on information collected on or before August 26, 2011.
Here’s a look at the most hopeful districts.
States throughout New England cited increases in home sales in July compared to last year, but say the struggling sales still reflect the loss of the homebuyers’ tax credit. Buyers appear apprehensive about economic conditions.
The median sale price of single-family homes and condos remained were virtually unchanged compared to a year ago. Sellers are sweating competitive prices to attract buyers who, in turn, negotiate for even lower prices.
Most contacts did not express serious concern about the rising levels of foreclosures heavy inventory, but were pessimistic about any uptick in activity. Most contacts believe sales for this year will fall below last year’s levels and expect the same for as long as two years.
Residential brokers in the district reported sales moving slightly ahead of last year’s weak levels. However much of the increase was Florida-based where investors are taking up some of the slack. Outside Florida, brokers found that sales were similar to last year’s levels.
Inventories are up, keeping prices flat to slightly down from last year’s levels and the outlook is for little sales growth.
New home sales were similar to last years. With building off, inventory levels declined but that didn’t stop prices from falling.
Residential contractors did say home improvement construction improved from earlier in the year.
Residential construction increased from last year, according to sources, as the value of residential building permits in July increased significantly from the same period a year earlier in both the Sioux Falls and Minneapolis-St. Paul areas.
Resale real estate markets also grew, with home sales in July up significantly from the same period a year ago in the Minneapolis-St. Paul and Fargo, ND markets. However, July pending sales of homes in the Sioux Falls area decreased from July 2010.
Beige Book contacts in the single-family housing industry said new and existing home sales rose slightly since the last report, even in a generally weak market. Existing home inventories declined and new home inventories remained limited. Respondents were cautious in their outlooks, but most expect a slight improvement in sales in the second half of the year, with a slow recovery taking hold by early 2012.
Apartment demand was strong during the reporting period, and rental rates continued to rise. Contacts also noted increased sales of apartment properties.
Financial contacts reported flat to falling loan demand and customers approaching borrowing decisions with great caution even with competitive interest rates.