Although business activity remains below year-earlier levels, many businesses reported "recent signs of improvement," the Federal Reserve Bank of Boston’s Beige Book reported yesterday.

Residential real estate sales rose in recent months, although prices continued to fall; commercial real estate markets remain very soft, the Fed analysts said.

Vacancy rates have not increased noticeably since the last report, but net absorption is perceived to be negative. Landlords are reportedly trying to hang on to existing tenants "at all costs," the report shows.

One bright spot in the report found nearly all New England staffing contacts reported upticks in labor demand in recent weeks.

"But (it’s) uncertain whether the increased demand will be sustained," the report found.