Paralleling many economists predictions of a slow economic recovery based on property data, the most recent Beige Book from the Federal Reserve shows there has been modest growth since last year, while some economic factors are taking longer to bounce back than others. When regarding the housing markets nationwide, many posted notable improvements.
Agreeing with many reports from data firms throughout the November, the Beige Book shows the gap between buyer demand and seller supply is narrowing throughout many districts. In New York, Boston, Dallas, Atlanta and Kansas City, inventories declined significantly. This is likely due to a surge in home sales, as affordability has remained high throughout much of 2012, prompting many first time buyers to make the major investment.
According to the federal report, home sales increased in Atlanta, while other sources say home sales have soared in many other areas including Arizona, Florida and California which previously suffered from a large inventory of delinquent properties. The rise in home sales throughout districts such as San Francisco have likely posted great gains as buyers have sought out affordability offered by both foreclosures and short sales.
Though most housing markets have been steadily improving, which has also helped boost the economy in many districts, some located in the Northeast saw less-than-hopeful activity in the last six weeks. Housing markets in both Boston and Philadelphia posted lackluster improvements in home sales for condos and single-family properties prior to Hurricane Sandy, which is credited to drop in activity throughout the start of November.
As the slower season for home sales approaches, the notable growth in home prices has slowed in most districts covered by the report. This is likely due to a lower inventory of properties listed for sale, while the previous spike in prices throughout the first half of the year occurred with less competition from delinquent properties on the market. These homes are generally priced significantly lower than equity homes, and without them, price posted large gains.
While existing-home sales have been on the rise this year, the Beige Book reveals that new home sales have also increased in districts including Dallas. Construction has been increasing as the area's local economy has been stimulated by improved employment opportunities. In turn, builder confidence has been on the rise in recent months, as the most recent index from the National Association of Home Builders posted a five-point increase, marking the highest level of confidence since May 2006.