New Hampshire Real Estate Blog

Real Estate is local…even in NH it is local to whatever area you reside in. Pockets of the market are very very busy but it has been a harsh winter…weather wise and real estate wise. Monika and I have had the busiest December and January that we can remember. They are usually very slow months, they were busy for us. February slowed down a bit and now that March is here…we’re busy again. That’s our take on our local real estate market!

This months NH Association of REALTORS market trend report just came out and Peter Francese offers up some very interesting reading.

Reprinted below is the report in it’s entirety.

The darkest time is just before the dawn …
-by Peter FranceseThere’s no lipstick big enough to put on this ugly bear market. During the past two months we’ve had the most miserable weather, darkest economic news and an awful real estate market. The stock market swoon, massive credit market problems, and falling consumer confidence have produced a truly extraordinary decline in real estate transactions throughout our state as well as the nation.

Sales volume during the first two months of this year for all New Hampshire properties was down 30 percent, residential was off 28 percent and condominium sales volume was 34 percent below the same period last year. It doesn’t get much worse than that. Median residential home prices dropped just 7.5 percent despite a 24 percent drop in units sold while condominium median selling price edged down only 2.4 percent, even though units sold were off 24 percent.

We are just now beginning to see articles in investment publications suggesting that this is the
time to consider buying a home ..

There is no doubt that New Hampshire Realtors®, right along with many of the home owners they serve, are feeling a great deal of financial pain because of this unforeseen convergence of bad news and events. During January and February, the dollar volume of real estate transactions in our state was $187.5 million below the same period last year. That’s a drop of over $3 million a day.

At the same time, the nation’s largest financial institutions have experienced home mortgage related securities losses in excess of $150 billion, according to the Wall Street Journal. And they will soon be writing off billions more in bad home equity loans. Clearly something had to be done at the national level, and that’s exactly what’s happening.

First, the Federal Reserve Bank is buying $200 billion worth of mortgage backed securities, and the stock averages temporarily jumped in celebration. Second, the Federal Housing Administration (FHA) that guarantees home loans is greatly expanding its role and is signing up ailing mortgage lenders who would have been unable to make any new loans without such guarantees.

This will enable a great many homeowners to refinance their adjustable rate mortgages and avoid foreclosure, something that was unavailable to them just a couple of months ago. It also comes at a time when Freddie Mac and Fannie Mae, previously the big buyers of home mortgages, are becoming a lot more risk-averse.

Third, and I think most important, is we are just now beginning to see articles in investment publications suggesting that this is the time to consider buying a home.

The best example of this is Jonathan Clements March 12 column in The Wall Street Journal: www.wsj.com. I urge every Realtor® to get a copy.

Mr. Clements column, “Getting Going,” is widely read and highly respected. In that March 12 column, he talks about three reasons to buy a house this spring: to trade up, to buy a second home, or to buy one for your adult children. Each of those reasons has relevance here in New Hampshire, where there are so many second homes, and a huge number of older couples with adult children who may have been unable to afford a home here.

There has been an incredible amount of bad news of late, and there is no doubt that consumers are feeling at least as poorly and risk-averse as the mortgage lenders. But the Federal Reserve Bank, FHA and other federal agencies are pulling out all the stops to improve financial market conditions as well as consumer confidence and increase the ability of average Americans to buy a home.

When those efforts start to pay off, things will likely improve in the New Hampshire real estate market and elsewhere. But we now have a new element to think about. Given the amazing rapidity with which news and information travels on the web, I think the turnaround will happen a lot faster this time than in the pre-internet era of the late 1980s.

While it’s not a good idea to drive a car just by looking in the rearview mirror, an occasional glance backwards at least tells you where you have been. Looking back at the past two months in the chart below is, for the most part, just a sad reminder of how bad things have been. But given the relatively greater strength of the New Hampshire economy and the New Hampshire Advantage, we have a better-than-even chance of seeing more positive numbers in future months.

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