August 2008 Market Trend Report
Sometimes I am very glad I live in Little old New Hampshire where our traditional values and lifestyles set us apart from the rest of New England and often times the nation. While our market has been a challenge and we’re seeing agents leave the business because they can’t make ends meet in real estate anymore. We are far better off than many other states.
I remember the last real estate market correction we had which resulted in many agents leaving for greener pastures and those that stayed behind to struggle it out learned a valuable lesson. What goes up does come down and often times up again. It is a cycle and timing is everything.
This months NHAR market reports hits on topics near and dear to us all and as usual Peter Francese is right on the mark with his opinions. The Market Trend report is re-printed in it’s entirety with permission of NHAR.
Whats Next A Swarm of Locusts?
Maybe, but not Here …
-by Peter Francese
Just when it was starting to look like there was a hint of stability in housing prices – WHAM! – Wall Street firms start crashing. Who knew they lived so close to the edge?
The psychological and perhaps economic impact on consumers, many with heavy 401-K exposure, can only be bad.
Here in little old New Hampshire, far from the perils of Wall Street, things don’t look so bad.
The mortgage lenders left standing do not appear very eager to lend any money to anyone, least of all a would-be homeowner with any blemish on his or her credit score. The FDIC reports that 80 percent of its member banks are tightening lending standards, compared to less than 20 percent a year ago. As one official said: “Banks are getting scared not only about lending to the public, but also to each other.”
Despite what professor Karl Case said in the Wall Street Journal last week (He thinks “the housing market may be near a bottom”), recent events suggest we are in for some tough selling months ahead. That is unless the Feds get Fannie Mae and Freddie Mac back in business big-time and encourage more banks and other lenders to write more home mortgages. (See important price/income ratios below.)
Here in little old New Hampshire, far from the perils of Wall Street, things don’t look so bad. The most recent numbers from the Federal Reserve Bank of Boston show that New Hampshire still has by far the lowest unemployment rate in New England at only 4.9 percent (compared to 5.4 percent region wide and 7.7 percent for Rhode Island).
New Hampshire also has the highest year over year rate of growth in non-farm jobs: up 1.2 percent (July ’07 to July ’08) compared to a 0.1 percent rise region wide, and a loss for ME, VT & RI. Our state also has by far the highest index of economic activity (199.4) in the region, and is well ahead of the nationwide index (159.5).
So when lenders start to loosen up again, our state is clearly in the best position to recover from the incredible financial catastrophe hitting Wall Street. But the level of uncertainty and visceral fear in the nation’s financial sector is so intense that it may be some months before the mortgage lending business gets back to something approximating normal.
In the meantime … thanks to those of you who responded to our survey last month, we now know a bit more about recent homebuyers that we did before. During the month of August, you reported (to NNEREN) selling a total of about 1,400 homes (1,055 residences, 276 condominiums and 100 mobile/manufactured homes).
We received a total of almost 150 completed surveys for about a 10 percent response rate. That’s not enough to make any definitive judgments about all home sales, but it was interesting as confirmation of the rich complexity our housing market.
Here are 10 highlights from the first month’s survey respondents:
• Dominant home type: single family detached unit at 71 percent of all responses
• Second most prevalent home type: condominiums at 15 percent
• Mobile/manufactured homes were 8 percent and “other types” were 5 percent
• Main reason for buying a SFD: to use as a primary residence (83 percent)
• Percent SFD buyers from out-of-state: 33 percent (half from MA, ME, RI or CT)
• Percent of condominium buyers from out-of-state: 42 percent
• Average SFD sale price: $259,000 (Avg. NNEREN residential sale: $284,500)
• Average condo sale price: $270,300 (Avg. NNEREN condo sale: $211,600)
• Avg. SFD sale price: In-state buyer, $214,000; Out-of-state buyer, $351,000
• Avg. condo sale price: In-state buyer, $285,000; Out-of-state buyer, $259,000
• Families w/kids, 35 percent; families no kids, 33 percent; One person, 25 percent; retirees 7 percent
These highlights should be viewed with extreme caution, because this is from a small, 10 percent sample that might not be representative of all home sales in our state. We hope that in future months, more New Hampshire REALTORS® will respond and we can report the results with greater confidence.
NERREN reports that New Hampshire residential sales in August were down 4 percent from August 2007. Median home prices varied greatly from place to place, but overall the median home price statewide was just 2 percent below last August. On a year-to-date basis, statewide home prices were 9 percent below last year.
The latest household income data from the Census Bureau shows that for all New Hampshire counties, the ratio of median home price to median household income has fallen to 4 or below. This is a very important threshold that signals a return to what the home price-to-income ratio was six years ago, in 2002, when it was 3.9 times.
NH residential (non-condominium) sales
| County | August sales | % change 2007-08 | Median home $ | % change 2007-08 | Median income | Home $/ |
| HH income | ||||||
| Belknap | 57 | 0% | $220,000 | -4% | $54,800 | 4 |
| Carroll | 59 | -14% | $199,000 | -15% | $54,600 | 3.6 |
| Cheshire | 76 | -4% | $185,500 | 7% | $54,800 | 3.4 |
| Coos | 38 | 52% | $142,200 | 50% | $42,700 | 3.3 |
| Grafton | 85 | 21% | $190,000 | -10% | $51,800 | 3.7 |
| Hillsborough | 312 | 6% | $256,600 | -1% | $67,700 | 3.8 |
| Merrimack | 107 | -16% | $227,000 | -5% | $59,600 | 3.8 |
| Rockingham | 216 | -17% | $294,350 | 0% | $75,900 | 3.9 |
| Strafford | 72 | -17% | $228,450 | 4% | $60,800 | 3.8 |
| Sullivan | 33 | -6% | $206,750 | 10% | $51,700 | 4 |
| Statewide | 1,055 | -4% | $237,900 | -2% | $62,400 | 3.8 |
Source: Northern New England Real Estate Network (NNEREN). Statistics are based on information from NNEREN for the respective periods shown for the respective regions in the State of New Hampshire or all towns in the State of New Hampshire. All analysis and commentary related to the statistics is that of the New Hampshire Association of REALTORS® and not that of NNEREN.
< ![endif]–>The Real Estate Market Trends newsletter is provided for the benefit of the members of the New Hampshire Association of REALTORS®, Inc. ©Copyright 2007 New Hampshire Association of REALTORS®, Inc. All Rights Reserved.
Peter Francese is the Demographic Advisor to the New Hampshire Association of REALTORS®.
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