Only nine out of 12 Federal Reserve districts experienced moderate economic growth in the latest Fed Beige Book, but most real estate markets continued to improve from late November to the end of 2013.
This is a slightly disappointing change, considering all 12 districts witnessed moderate-to-modest economic growth in the previous beige book.
While a few districts witnessed a slowdown in home sales and residential construction, most reported increased residential sales activity, construction and rising home prices.
Atlanta, Cleveland and Kansas City districts indicated that year-over-year residential sales growth had slowed relative to earlier quarters in 2013, compared to most districts that recorded increases.
On the other side, Boston, Philadelphia, Minneapolis and Dallas noted that some areas within those districts saw home sales below year-earlier levels.
Home selling prices continued to climb in the Boston, Atlanta, Chicago, Minneapolis, Kansas City and San Francisco districts but remained stable in the Cleveland and Richmond districts. Meanwhile, New York posted mixed changes in sales price.
Residential construction recorded mild changes with most districts reporting slight to moderate increases. But not every district joined the bandwagon. Dallas cited a slight decline, compared to New York, which reported no change, and Cleveland, which reported strong growth.
Despite the dip in overall residential construction, Dallas noted elevated construction levels for multi-family units. Similarly, Atlanta, Cleveland and Chicago also posted strong multifamily construction.
The good news is that reporting districts indicated that residential real estate contacts remained optimistic looking forward, while voicing concerns about declining inventory and potential changes in the mortgage market.
Eight of the districts said their contacts expect residential construction to pick up in the near term, including Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.
Commercial real estate activity posted similar results, with commercial construction generally increasing and two-thirds of the districts reporting increases in commercial sales and leasing activity.