Beige Book shows real estate market remained weak in September
Conditions in the residential and commercial real estate markets remained weak in September, according to the latest Beige Book from the Federal Reserve. The Beige Book is published eight times a year and measures economic activity by surveying industry contacts in markets across the nation. Reports from the dozen fed districts nationwide suggest September brought some expansion in economic activity, but only modest or slight growth, the central bank said. Contacts in the New York district said residential construction "remains moribund" in the area, especially activity for single-family homes. At the same time, the rental market is strengthening in the region. All 12 districts noted little change in real estate construction activity in September with residential construction still at very low levels. Home sales remain weak with home prices either flat with the prior month or falling across most districts, according to the Beige Book. At the same time, construction of multifamily dwellings increased at a moderate pace in the Boston, Philadelphia, Cleveland, Kansas City, Dallas and San Francisco districts. Commercial construction is weak, but did increase at a slow pace in most districts. Boston, Philadelphia, St. Louis and Cleveland reported some gains in demand for construction on facilities related to education, health care and other institutional-related buildings. New York noted an increase in hotel development. Vacancy rates remained high nationwide, with the Boston, Atlanta, Chicago, Minneapolis and Dallas districts noting some increases in leasing activity. Philadelphia and San Francisco contacts saw investors intrigued by well-leased office space. This was the final Beige Book of 2011 and the one the Federal Open Market Committee will reference when it meets again Nov. 1-2. Write to Kerri Panchuk.