The Federal Reserve's latest region-by-region analysis of the national economy, the so-called "Beige Book" released last week, has an important message for anyone interested in real estate: It's a gradual recovery out there, but it's for real and it should prove durable.

The Fed's report, which is based on detailed assessments from 12 member banks spread around the country, noted that the home purchase tax credits have stimulated sales as they were intended to do.

But what happens when they're gone? Most economists in the Federal Reserve System "think that low interest rates and fairly low prices will continue to make the (housing) market attractive for prospective buyers," says the report.

Some dramatic pickups in local sales this spring were highlighted by the Fed -- the state of Maine, for instance, saw a 63 percent year over year jump in the latest month, Rhode Island sales were up by 26 percent and New York 20 percent.

The Fed didn't mention them by name, but there are dozens of other metropolitan markets that have racked up hefty gains as well: hard-hit Miami saw house and condo sales jump 31 percent in April over the same month the year before.

Baltimore sales jumped by 26 percent, Washington, DC by 36 percent. Metropolitan Nashville, Tennessee, saw sales increase by 27 percent.

Though most of these areas are still reporting either flat or slightly negative prices, a handful are beginning to see positive appreciation.

San Francisco and San Diego both are looking at 5 percent appreciation, according to the (Integrated Asset Services) IAS 360 housing price index released last week.

Palm Beach, Florida prices are up 3 percent. And Orange County, California, prices up by 1.4 percent, according to the IAS index.

Now, no one is predicting a break-out of big-time home price appreciation across the country anytime soon. But the IAS numbers suggest that home buyers and owners can at least be confident that we've reached or passed the bottom in most areas.

Nationwide, the index found prices in April were up by almost one percent.

Of course there are still some major roadblocks in the way of any full economic and housing market recovery. Tops on the list: the naggingly high and persistent unemployment numbers.

Although the latest federal jobs report looked good at first glance -- a net 431,000 gain and a decline in the unemployment rate to 9.7 percent from 9.9 -- most of those came from temporary Census-taker hirings.

So, as usual, the picture is complicated. But overall, we think the Federal Reserve probably has the outlook pegged about right.

Published: June 14, 2010

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.