The Federal Reserve, in it’s most recent “Beige Book” said residential real estate markets in most districts remained weak.
The following is from the latest Beige Book report regarding New England real estate.
Residential real estate markets in New England remained sluggish in May and into June, although contacts cite some positive signs. Massachusetts and Connecticut saw May home sales drops of 15 percent and 19 percent, respectively, from May 2008. Rhode Island and Maine had more moderate single-digit year-over-year home sales declines in May. In June, Boston area home sales declined only 5 percent year-over-year. In New Hampshire, home sales were flat in June compared to the year before. Condo sales were still far below 2008 levels in Massachusetts, Rhode Island, and Connecticut.
The median home price fell about 12 percent year-over-year for most states in the region, but dropped 25 percent in Rhode Island in May from a year earlier. Another exception was the Greater Boston area, where the median home price decreased only 2 percent year-over-year in June.
Distressed properties make up a much larger share of the homes being sold this year than last, especially in Rhode Island, with negative effects on median prices. However, inventory continues to decline in some areas, reducing excess supply. Several contacts complained about the Home Valuation Code of Conduct, which they argue is leading to under-appraisals by appraisal management companies lacking sufficient experience in local housing markets.
The Beige Book refers to the commentary on current economic conditions that the Federal Reserve Board publishes 8 times a year. To gather information and data for the report each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The report comments on many segments of the economy including consumer spending, tourism, manufacturing, etc…All I reported on was the New England residential real estate part of the report. To read the entire commentary Click Here
