Seventh District – Chicago
Construction and real estate activity also increased moderately over the reporting period. Residential construction continued to expand in both the single- and multi-family markets. An industry contact noted that with homebuilders beginning to exhaust their existing inventories of vacant in-fill lots, single-family construction might slow in some areas of the District until planned projects start to come online. Builders also noted improved availability of financing for new projects, but indicated that difficulties in finding skilled labor have often delayed construction. Home sales were somewhat lower, and growth in home prices and residential rents slowed. Real estate contacts expected sales to return to normal levels in the coming months, pointing to recent increases in online and open-house traffic. Nonresidential construction increased, driven in large part by demand for industrial and office buildings. Automotive parts manufacturers, in particular, remained a source of demand for industrial buildings. Commercial real estate activity continued to expand, with contacts noting strong demand for medical office buildings. Vacancies ticked down, rents rose, and leasing of industrial buildings, office space, and retail space all increased.
Eighth District – St. Louis
Home sales decreased in the Eighth District on a year-over-year basis. Compared with the same period in 2013, August 2014 year-to-date home sales were down 3% in Little Rock, 2% in Louisville, 8% in Memphis, and 5% in St. Louis. Residential construction declined in the majority of the District’s metro areas. August 2014 year-to-date single-family housing permits decreased in the majority of the District’s metro areas compared with the same period in 2013. In particular, permits decreased 29% in Little Rock, 8% in Louisville, and 3% in St. Louis. In contrast, permits increased 2% in Memphis.
Ninth District – Minneapolis
Residential real estate market activity decreased since the previous report. In the Sioux Falls area, August home sales were down 8%, inventory increased 11%, and the?median sales price increased 5% relative to a year earlier. August home sales were?down 5% from the same period a year ago in Minnesota; the inventory of homes for?sale increased 13%, and the median sales price rose 4%. Several Minnesota real estate professionals and investors recently noted that out-of-state investor groups are paying above-market prices for single-family rental properties in Minneapolis. Meanwhile, August home sales in western Wisconsin were up 8% from a year ago; the median sales price was flat.
Tenth District – Kansas City
On balance, District real estate activity increased slightly in late August and September with residential real estate activity flat and commercial real estate activity increasing moderately. Residential home sales were unchanged compared to the previous survey period and were similar to year-ago levels. Sales of low- and medium-priced homes continued to run ahead of sales for higher-priced homes. Home prices increased modestly, and inventories continued to rise slightly. Most residential real estate contacts expected home sales to decrease in the coming months primarily reflecting typical seasonal declines. Housing starts and construction supply sales edged down since the previous survey period. Residential construction activity was expected to pick up slightly as builders anticipated a slight increase in traffic of potential buyers. Commercial real estate activity increased moderately relative to the previous survey period as contacts continued to report a decline in vacancy rates, an increase in absorption, higher sales, and increased construction activity. The commercial real estate market was expected to strengthen at a moderate pace over the coming months.
Eleventh District – Dallas
The District’s housing sector remained solid overall. Single- family home sales were flat to down over the reporting period. Land prices continued to trend upward at the same pace; however, the pace of home price appreciation slowed, with one respondent noting a slight pushback in pricing from buyers. Contacts said a few homebuilders were expanding production of more- affordable high-density housing. Robust apartment demand kept occupancy high and rent growth solid despite elevated levels of multifamily construction activity. Single- and multifamily housing contacts were optimistic in their near-term outlooks.
Twelfth District – San Francisco
Real estate activity in the District advanced, but growth trends in the residential sector were uneven across the District. Contacts reported that in a few areas, prices of single-family homes accelerated, while in other areas the pace of price increases declined. In a few areas, year-to-date single-family housing starts were down compared with the same period in 2013. Sales of single-family homes were stable during the reporting period. Overall, multifamily construction and development activity remained strong. Commercial office demand was robust in San Francisco and Silicon Valley, and rents increased compared with the previous reporting period. In Los Angeles, commercial real estate construction picked up.