Feds issue "beige book" with bland forecast

Beige Book: Lackluster Housing Market
"Flat," "soft," "tight," and "weak" were words frequently used to describe residential housing markets in the 12 Federal Reserve banking districts.

Monday, April 30, 2007
By Broderick Perkins, Realty Times

Adding commentary to recent statistical evidence about the nation's housing market, the Federal Reserve's newest district-by-district economic report says the housing market remains waylaid by over-supply, weak home sales, flat prices and few home starts.

While homes in the moderate price range were selling in a few select markets, bleak conditions were widespread through the 12 Federal Reserve bank districts, revealing a national market gaining more uniformity and less local flavor every day, according to the third "Beige Book" report this year.

Rather than crunching numbers, the eight-times-a-year Federal Reserve report gathers anecdotal commentary on a variety of economic indictors, from agriculture, consumer spending and energy, to employment, major industry sectors' performance and wages.

Comments are solicited from representatives of the reserve's dozen district branch banks as well as from economists, market experts and other sources in those districts.

The latest report is based on pre-April 16 commentary which paints the same pale picture drawn in this year's two previous Beige Book reports -- the housing market is in a rut.

"Residential real estate activity continued to weaken in many districts. Many districts saw a decrease in homebuilding," according to the report's summary.

We like the twelfth district's forecast better, though.........

San Francisco, Twelfth District

In most areas, sales for new and existing homes continued to fall as average time on the market rose. Price appreciation remained in many areas, but at a much slower pace than last year.

Developers, however, were not unloading undeveloped land suggesting they expect market snores to be limited.

This is the one district where numerous contacts noted areas of strong stabilization in the pace of home sales and price appreciation as well as improvements in the level of multifamily constructions.

One banking contact reported that residential mortgage lenders have been discounting assessed home values when making new mortgage loans.