Real estate markets across the country continued to deal with lower inventories and rising prices, although some regions are seeing a new wave of residential construction, according to findings in the Federal Reserve’s Beige Book report for July.
The Beige Book found home sales increased moderately across the nation. Within each district, activity varied from mild to robust. The weakest performance was in the New England region covered by the Boston Fed, which found double-digit decreases in both single-family and condo sales on a year-over-year basis during May, with inventory down “substantially” in all reporting areas.
However, median prices were up for all areas except Vermont and the condo markets in Boston and Massachusetts. (Connecticut did provide data for this report.) The Atlanta recorded a similar situation of low inventory and higher prices but was also dealing with a sharp increase in 30-delinquencies, particularly in the South Florida markets.
Elsewhere, the overall activity was more positive. The Cleveland Fed found its region addressing the inventory issue, with homebuilders reporting “stronger-than-expected new-home sales in May and June as buyers returned to the market as social distancing restrictions were eased.”
The Dallas Fed report trumpeted that “activity in the housing market improved markedly” in its district as “new-home sales strengthened, with several contacts noting a record month in May and continued solid activity in June. Contacts said record-low mortgage rates were driving sales, with the pace of sales higher in the low- to mid-price range.”
The Dallas Fed report added, “After a temporary pause, new development activity was picking back up, and contacts noted evaluating new lot/land deals and/or moving forward with planned acquisitions. Outlooks have improved significantly, but there was lingering concern about the demand impact in the fall of a weak labor market, the upcoming election, and virus flare-ups. Multifamily contacts said leasing activity weakened in early to mid-spring due to COVID-19 but has improved since then.”
The residential real estate scene within the San Francisco Fed’s district seemed to embody the problems and triumphs of the nation, with moderate increases in residential construction activity, but inventory problems were not erased and prices were being pushed higher.
“In Oregon, a large backlog of homeowners wanting to list their home for sale indicated that inventory in some areas may rise in the coming months,” said the San Francisco Fed’s report. “In Idaho and Eastern Washington, observers saw early evidence of buyers moving from higher-cost coastal markets after starting permanent teleworking. A Northern California contact reported that a number of renters were unable to pay rent, while some homeowners were delinquent on mortgage payments.”