The Summary of Commentary on Current Economic Conditions by Federal Reserve District or the so-called Beige Book was released on Wednesday.  The document consolidates comments from non-Federal Reserve contacts and sources on conditions prior to September 28 and is not a commentary on the views of Federal Reserve officials.

Most Districts reported conditions had improved since the last report with strengthening existing home sales, rising residential constructions, and prices described as steady to increasing.  Declining inventories were noted in the Boston, Atlanta, Minneapolis, Dallas, and San Francisco Districts. Here is a brief summary of residential real estate information from each of the 12 Federal Reserve Banks.

First District - Boston

Annual sales growth continued in August in both single family and condo markets.  Low interest rates and affordable prices contributed to improving sales and increased residential rents.  There were reports of improved lending conditions but most contacts said mortgage qualification remains difficult. 

Median prices appear to be mixed by area.  Prices in the Great Boston area are reported to have declined rather than increased as expected because of significant demand and dwindling inventory.  The decline might be the result of increased sales of lower priced properties. 

Inventory throughout the region continues to decline and some contacts fear this will discourage buyers and also sellers who may not be able to find a replacement property.  There are increasing reports of multiple bids and sales over asking price.  

Contacts expect sales to continue to grow on an annual basis in the next several months but many note that conditions remain fragile and recovery could be derailed by deterioration in economic conditions.  Some contacts expect an influx of sellers in the spring which would reverse declining inventory levels.  Median sale prices are expected to remain flat or improve modestly in the coming months.

Second District - New York

Residential real estate has continued to improve.  The Buffalo market flattened in August but picked up sharply in September while Northern New Jersey's shows further modest signs of improvement and sustained pickup in rental apartment construction.  Home prices across northern New Jersey are recovering gradually and distress sales still hold down but no longer push down prices,  Manhattan's co-op and condo market has remained stable--both in terms of sales activity and prices with strength at the upper end partly fueled by foreign buyers. Market conditions are reported to have strengthened in Brooklyn and especially Queens in the third quarter, while Long Island's housing market is weak but stabilizing. New York City's rental market remains robust: rents have decelerated a bit in recent months but are still estimated to be rising at a 6-8 percent annual pace.

Third district - Philadelphia

Builders reported a drop-off in traffic and slower sales in August and early September and lament that people are choosing to rent rather than buy even when rents exceed ownership costs. Residential brokers reported somewhat stronger annual sales growth in August than earlier thought and continued strength into September. Inventory levels of real estate listings remain at lower levels than one year ago with no signs of a significant emerging shadow inventory. Multiple bids are reported for homes priced between $250,000 and $400,000; more very high-end listings are beginning to appear and test the market.

Fourth District-Cleveland

Builders report that single-family housing starts were mixed and construction activity is about the same as a year ago.  Builders expect a modest rise in starts in the near term but spec building remains on the low side, due in part financing difficulties and the costs of some construction materials which rose modestly.  List prices of new-homes held steady and most builders indicated that they have reduced discounting.  There were sales contracts across all price-point categories. Sales of existing homes continued to show improvement, although inventory is tight in the mid-price range.

Fifth District--Richmond

Residential activity has improved since the last report with lower-priced properties selling more quickly in the Richmond area while an agent in the D.C. area indicated that sales in the $800,000-plus range were rising relatively quickly.  Housing inventories in DC are reported at eight year lows, pushing up prices.  A Realtor in the Fredericksburg area reported that in her agency sales were up forty percent over last year and she expected the stronger market to continue.   Another contact said that foreclosures in central Maryland had fallen thirty percent from the previous quarter, bolstering housing prices.  A report described the housing market in North Carolina as mostly unchanged, with the exception of an improvement in the Research Triangle. Another source reported a slowdown in housing in the Hagerstown area.

Sixth District--Atlanta

District residential brokers indicated that recent existing home sales and buyer traffic were up slightly compared with year-earlier levels and noted declining inventories continuing to put upward pressure on home prices in many markets. Contacts anticipate modest home price gains over the next year; however, it is expected that neighborhoods hard hit by foreclosures will continue to experience home price weakness for some time.

District homebuilders remained positive, indicating that recent new home sales and construction activity were up slightly from last year and new home inventories remained lower. Construction remained mostly limited to more desirable locations such as highly regarded school districts. Southeastern builders also reported that finished lot inventories varied across the region, but most anticipate a decline in those inventories over the next six months. Many indicated that financing terms remain prohibitive for acquisition and development. New home prices were slightly up compared with a year earlier. Homebuilders also witnessed stronger buyer traffic.

Seventh District--Chicago

Growth in construction moderated some from the previous reporting period. Homebuilders indicated that new single-family construction continued to rise at a slow but steady pace with multi-family construction comparatively stronger.  Lending remains tight both for residential development and home purchases   Prices edged higher, despite a rise in short sales.

Eighth District--St. Louis

Home sales increased throughout most of the District on an annual basis. Compared with the same period in 2011, year-to-date home sales were up 15 percent in Louisville, 6 percent in Little Rock, 11 percent in Memphis, and 17 percent in St. Louis. Year-to-date single-family housing permits increased in the majority of the District metro areas compared with the same period in 2011 and were up 41 percent in Louisville, 27 percent in Little Rock, 39 percent in Memphis, and 17 percent in St. Louis.

Ninth District--Minneapolis

The value of residential building permits in the Sioux Falls area in August was up 11 percent from the same period last year and the number of permits more than doubled in the Minneapolis-St. Paul area and in Billings.

Home sales in mid-September were up 18 percent from the same period a year ago in the Minneapolis-St. Paul area; the inventory of homes for sale was down 30 percent. In the Sioux Falls area, August home sales were up 44 percent, inventory was down 14 percent and the median sales price rose 5 percent relative to a year earlier.

Tenth District--Kansas City

Solid growth in residential real estate activity continued in late August and September; housing starts edged higher, and some builders had trouble finding workings in states with low unemployment rates. Expectations for future homebuilding remained favorable and building materials were generally available. Home sales continued to grow at a solid pace, though slightly slower than in the previous survey. Residential realtors said mid-range homes sold well, while the luxury home market remained exceedingly slow. Several contacts noted a rise in sales to investors, as rental rates increased. Expectations for future home sales flattened somewhat, but prices were generally rising and expected to increase further. Mortgage lending activity eased slightly but one contact noted continued tightening of underwriting guidelines.

Eleventh District--Dallas

Single-family housing activity continued to increase at a good pace over the past six weeks. Contacts said new and existing home sales outpaced expectations, and new home construction activity increased. Inventories of both new and existing homes remained tight, leading to price gains. Apartment construction picked up since the last report, and outlooks for the multifamily sector remain quite optimistic.

Twelfth District--San Francisco  

Although still well below its historical average, the sales pace for new and existing homes picked up further in many areas and contacts said pent-up demand may spur additional gains in coming months.  They noted a decrease in inventory and a noticeable increase in construction activity.