N.H. Market Trend Report…The future isn’t what it used to be

The New Hampshire Association of REALTORS released their market trend report written by Peter Francese, as usual Peter make us really think about the future of New Hampshire’s real estate market. Most REALTORS we’ve been talking to report an increase in activity, not a lot but an increase. June traditionally is a slow month with graduations and vacations but our personal Internet hits are up and we have customers out looking at homes.

-by Peter Francese
That famous Yogi Berra quote pretty much sums up the situation. Who could have imagined a year or two ago the price of gas and heating oil rising above four dollars a gallon? Unless something is done to bring down fuel costs, housing throughout this region will become less affordable to the young people we need to assure our future economic growth.

To secure our future, we must know more about the buyers of residential real estate in NH.

Speaking of economic growth: Our economy is not exactly in the pink of health. The New England Economic Partnership recently held its spring meeting in Boston, and Dennis Delay (their New Hampshire economic forecaster) discussed the present and future economic outlook for our state.

Here is part of what he said (His full report is available at www.nhpolicy.org.
“Housing prices will probably fall 15 percent from the peak, before real estate markets bottom out. Still, New Hampshire should hold its traditional position of outperforming the regional economy in the future.”
My comment: Well, for the first quarter of this year, the $235,000 median price of a NHew Hampshire home is now 10 percent below its peak in 2006. But in May, the median price edged up 1 percent over April to $242,000 and is 3 percent above that first quarter figure above. It’s possible that the New Hampshire median price will drop another 5 percent from the 2006 peak at sometime in the future, but Dennis Delay’s employment forecast suggests otherwise.
He forecasts over 20,000 jobs being created in New Hampshire during the next 24 months (see chart I) with this caveat: “Even with falling real estate prices, housing experts still say there is a shortage of affordable housing in the Granite State.” He goes on to detail some of the consequences of labor shortages caused by that lack of housing.
The implication is that unless something is done about providing more workforce housing, the jobs he forecasts might not materialize. That’s the tight connection between economic growth and housing: less housing equals fewer jobs. It would be helpful if more town planning boards understood that connection.
The bottom line is this: If we are going to secure our future, we must know more about the potential and actual buyers of residential real estate in New Hampshire. We need to know on a monthly or at least quarterly basis how many home buyers were in each of the following categories:

• Households of working age people employed in the area
• Households of retired people from NH or other states
• Vacation, second home buyers or investors from NH or elsewhere

Right now, all we have is anecdotal information. Here’s the question: Would each REALTOR® be willing to fill out a very short questionnaire asking for the above facts about last month’s home sales? It would likely take no more than a few minutes, and we would only report aggregate trends so as to respect buyer privacy.
The future will almost certainly not be what it used to be. But it can be easier to navigate if we can provide you with better trending data about where buyers are coming from and why they are in the market for a home here.

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My e-mail address is here. Please let me know what you think.

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Source: Dennis Delay for the New England Economic Partnership

The year to date residential sales for the first five months of this year show a bleak picture of double digit declines over the same period last year. But I also included the change in sales from April to May to show that for eight of our 10 counties, residential sales rose between 10 and 44 percent during the month. Not a bad spring showing, even in the face of sharply rising gas prices.

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County	Units sold YTD	% change 2007-08	% change Apr-May ‘08	Median price YTD	% change 2007-08
Belknap	205	-22%	+44%	$217,900	-7%
Carroll	219	-15%	+10%	$197,900	-9%
Cheshire	212	-19%	+24%	$179,950	-12%
Coos	98	-26%	-31%	$102,500	-13%
Grafton	214	-30%	+39%	$202,500	-2%
Hillsborough	937	-24%	-2%	$249,900	-11%
Merrimack	342	-33%	+29%	$220,000	-10%
Rockingham	823	-17%	+13%	$295,000	-6%
Strafford	319	-26%	+13%	$216,500	-12%
Sullivan	138	-19%	+43%	$164,000	-13%
Statewide	3,507	-23%	+12%	$237,000	-9%

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.