The excerpts below are from the December 1, 2010 Beige Book regarding the Boston real estate market.
The Beige Book
The Beige Book is prepared by the Federal Reserve Bank based on information collected on or before November 19, 2010. Over all , the report said the economy in the Boston area seemed to be slowing in the final months of 2010 — but continued to grow over all. Growth is slow, but the report noted that there is more optimism from business owners than seen recently. Manufacturers tied to high tech, retailers, software companies, and IT-related businesses were the most upbeat. The story on real estate, however, has few bright spots, but the over all economic recovery is a good harbinger.
Residential Real Estate
Home and condos sales in the First District declined again in September on a year-over-year basis. Contacts throughout the region continue to attribute the declines to the expiration of the tax credit, along with job insecurity and more general economic uncertainty. Respondents expect year-over-year monthly declines for the rest of the year and worry that 2010 sales will be lower than 2009. At the same time, the median price of homes and condos is edging up in most parts of the region. Some contacts say the rise in the median price is due to increased activity in higher-end properties, not to a broad increase in home prices. Inventory continues to climb throughout the region; most contacts see these increases as a positive development because the number of properties for sale has been very low. Contacts do not expect strong activity to return to the region’s housing markets until consumer confidence improves.
Read more from the Beige Book regarding Boston’s economy.