The good: At least we’re not Michigan. The bad: Unemployment’s still on the rise. The positive: At least we’re not Michigan.

In its report issued eight times a year, the Federal Reserve District’s Beige Book report released on Wednesday, titled “Summary of Commentary on Current Economic Conditions”—it’s gathered from anecdotal information from banks, as well as interviews with businesspeople, economists and market experts—shows some glimmers of hope. That is unless you are one of the following: you are in the commercial real estate industry, you are unemployed, you live in one of the handful of states most affected by the housing crash (California included).

The Beige Book states: “Reports from the 12 Federal Reserve Districts indicated either stabilization or modest improvements in many sectors since the last report, albeit often from depressed levels. Leading the more positive sector reports among Districts were residential real estate and manufacturing, both of which continued a pattern of improvement that emerged over the summer.” The report also states that “the weakest sector was commercial real estate, with conditions described as either weak or deteriorating across all Districts.” See more in this column below for that “other shoe about to drop.”

In regard to residential real estate, according to the report, “Most Districts reported that housing market conditions improved in recent weeks, primarily from a pickup in sales of low- to middle-priced houses. Contacts reported that sales were boosted by the government’s tax credit for first-time homebuyers.” The National Association of Realtors is pushing Congress to extend the credit, and NAR’s first vice president Ron Phipps appeared before the Senate Banking, Housing and Urban Affairs Committee this week, declaring that each home sale generates roughly $63,000 in additional economic activity.

For its 12th District, which covers much of the Western U.S., the Beige Report states “that demand for housing continued to improve slowly, while demand for commercial real estate eroded further. The pace of home sales picked up further in parts of the District, accompanied by rising prices in some cases. However, the momentum for recovery has been undermined by ongoing increases in foreclosure rates, which have slowed the decline in the inventory of available homes. As a result, new home construction continued at a very slow pace throughout the District, and industry contacts noted little or no prospect for a significant pickup in the near term.”

Most people in the area’s real estate industry whom I’ve spoken with have citied several strong signs of recovery that are taking place. Call them optimists if you like, and let me offer one more optimistic thought: At least we’re not Michigan.

An Associated Press story on economic activity rising in some areas, but not others (California included), paints a positive picture if you live in the Midwest, unless you live in Michigan. The story notes that “states like Florida, Nevada and California, still suffering from the housing bust, remain depressed.” However, the story, which draws information from the Beige Book report and a Labor Department report, states “that many parts of the country either stabilized or improved modestly over the past six weeks.” But if you’re in metropolitan Michigan and looking for a job, you’re in a world of hurt. “Michigan, home of the battered American auto industry, claimed the highest jobless rate in the country — 15.3%,” the report states. Compare that with a national unemployment rate that reached a 26-year high of 9.8% in September, and it’ll make you glad not to be a Michigander.

Economists say national unemployment is expected to top 10% this year, and that it will rise as high as 10.5% by the middle of next year before slowly heading down. Still, Long Beach’s high unemployment rate is nothing to scoff at. Unemployment in Long Beach rose to 13.9% in September, according to a report issued by the Employment Development Department last week. Other nearby cities suffering from high unemployment figures include: Bellflower (12.9%); Compton (22.2%); Paramount (18.3%); and South Gate (16.1%).

And another, hopefully final, shoe is about to drop on the nation’s economy. Realty Bites has addressed this “other shoe” issue, as have others in the business of covering real estate, in great depth. But with the bad news focused on residential, little attention has been given to the commercial Damocles ready to pierce into the already bleeding heart of the nation’s lending pipeline. Website Cnnmoney is reporting under the ominous headline “3 signs of the next real estate collapse” that commercial real estate defaults will be the next blow to banking, and that many “have a slew” of CRE debt on their books. “Refinancing the $2 trillion in commercial mortgages will be tough, as property values decline. And in this new age of cautious lending, few banks are willing to refinance loans,” the article states.

May be that’s the silver lining for the residential market. When that shoe drops, people in the industry can say something positive without being greeted by scathing skepticism: “At least we’re not in commercial real estate.”

Realty Bites note: CRE folks, along with your scathing comments below please leave your contact info., so I can reach out to you and write about all the local deals I just know you’ll point out to me after reading this.