The Federal Reserve’s Beige Book released Jan. 15 showed that economic activity continued to expand at a moderate pace from late-November through the end of 2013, with almost half the districts reporting stable home prices. Despite the positive outlook, some districts noted concern over declining housing inventory.
Most districts reported increased residential sales activity and construction, as well as stable or slightly elevated home prices in the closing months of 2013 compared to the same point in 2012. However, the Atlanta, Cleveland and Kansas City districts indicated that year-over-year residential sales growth had slowed relative to earlier quarters in 2013.
Home selling prices continued to trend upward in the Atlanta, Boston, Chicago, Kansas City, Minneapolis and San Francisco districts. They remained stable in the Cleveland and Richmond districts. New York reported mixed changes in sale prices.
Residential construction saw slight-to-moderate increases in most districts; however, Dallas cited a slight decline, New York reported no change and Cleveland cited strong growth. Reporting districts indicated that residential real estate contacts remained optimistic looking forward, but voiced concerns about declining inventory and possible changes in the mortgage market.
Commercial real estate continued to improve, but performance within some districts was uneven across locations and property types. Commercial leasing activity increased in the Atlanta, Chicago, Minneapolis, San Francisco and St. Louis districts, as well as in New York City and on Long Island. They held steady in the Boston, Dallas, Kansas City, Philadelphia and Richmond districts.
Industrial leasing activity weakened in New York in the fourth quarter, but improved in the Richmond and St. Louis districts. Office and other commercial vacancy rates were mixed across and within metropolitan areas and across property types. Commercial rents increased at least modestly on average in the Boston, Chicago, Dallas and Kansas City districts. They held steady in the New York and Richmond districts.
Reports from the Atlanta, Boston and Kansas City districts were optimistic that commercial real estate fundamentals would continue to improve in 2014 — at least slowly. The outlook for commercial construction activity was positive in the Cleveland, Dallas, Minneapolis and Philadelphia districts.
Read the latest Beige Book Report here.
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