While the following information targets the whole US, it still has application to the Truckee/Lake Tahoe region.  We have found that the January sales are down about 30% to 40% over the last quarter of 2009 with projections for February showing about the same .  January and February sales are usually a bit off, played against the last quarter of 09 being abnormally strong.  Helping with January activity will be the series of winter storms that are blanketing Truckee and Lake Tahoe, giving us 110% of normal to date, thus bringing an abundance of skiers to the mountains.

     The Federal Reserve's first Beige Book of 2010 shows that toward the end of 2009, home sales increased across the country, especially for lower-priced homes.  Ten of the 12 federal districts reported gains in residential sales at the end of last year, all except San Francisco, where demand for housing has been steady, and Kansas City, where activity has eased since the last Beige Book.  In all districts, sales of lower-priced homes - which are typically purchased by first-time buyers - increased noticeably more than sales of high-end homes, due in part to the federal tax credit, district bankers said.  Several districts reported that the original expiration date for the credit boosted sales in November and led to a more than usual slowdown in sales in December. However, they say the extension of the credit into 2010 should give some additional momentum to the expected seasonal sales upturn this spring.
 
      Residential construction activity remained at low levels in most districts, although home building was reported to have increased in Chicago and Minneapolis.  Home prices appeared to have changed little since the last Beige Book, overall. Boston, Philadelphia, and Cleveland reported declines in home prices since the last report. Richmond says prices there are holding steady, and Dallas is seeing some "firming" in values.  Commercial real estate was still weak in nearly all districts, with rising vacancy rates and falling rents.
 
     Several districts reported that landlords were focused on tenant retention and that slack demand was allowing tenants to negotiate lease extensions at low rental rates and with favorable allowances.  Since the last report, loan demand continued to decline or remained weak in most districts, with credit quality deteriorating further and delinquencies still climbing.  Overall, reports from the 12 Federal Reserve districts indicated that while economic activity remains at a low level, modest improvements are more geographically widespread than in the last report. Labor market conditions remained generally weak with modest wage increases appearing in just a few districts.

Don Schaller

Broker/Owner

Schaller Family Realtors

Dickson Realty, Truckee

don@schallers.net