NH Market Trend Report | New Hampshire Real Estate Blog

NH Market Trend report ~ Spring is here, so are the buyers

Spring is definitely here and from my real estate perspective so are buyers!

February and March brought us an increase in activity. While winter was most definitely cold and dark in my Southern NH real estate world, the heat has been turned on and the sun is shining. Many buyers who have been on the fence have suddenly jumped off and started to do more than simply look at real estate, they’ve started to buy real estate.

Reprinted below is the New Hampshire Association of REALTORS market trend report for Jan and Feb 2009.

Spring is coming, with more buyers
-By Peter Francese

Before we can look forward we have to look back, even if we would rather not. During the first two months of this year, fewer than 1,000 residential units were sold and year-to-date sales volume ($214 million, not including condominiums) was half of what it was three years ago. Condominium sales volume ($39 million) was 70 percent lower than in 2006.
Whatever the weather, this could turn out to be the coldest winter on record for New Hampshire Realtors. We can only imagine how bad it must be in other states where the economy is in so much worse shape than it is here in the Granite State.
Our state has by far the lowest unemployment rate in New England (See Chart I) and one of the 10 lowest rates in the nation. Our state also has the fourth highest index of economic activity, according to the Federal Reserve (See Chart II). The problem, in terms of consumer confidence, is that these indicators of the substantially better economic conditions here in New Hampshire are unknown, except for a few savvy real estate investors.
Tables I and II below show the county level details of home sales from NNEREN for the first two months of this year. But the last column on Chart I also shows a very important indicator: the ratio of median home value to median household income.
Historically that number, which is one measure of general housing affordability, has usually been at 4.0 or below. When it rises above 4.0, too many buyers are not able to purchase a home. When it returns to 4.0 or below, it signals a time when many more potential buyers will think that a home they would like to buy is within their reach.

Source: Bureau of Labor Statistics

Source: Federal Reserve Bank of Philadelphia
Potential buyers, however, must also have some level of confidence that better economic times are in the near future. And lenders need to feel more confident, too. So far, that confidence has not shown itself. But early believers in its imminent return will be able to buy one, or maybe even two, very reasonably priced homes.
What is important to keep in mind, however, is that the median sales price figures in tables I and II below are very heavily influenced by foreclosed and short sales. While it is true that home foreclosures are less than one percent of all owned homes in New Hampshire, they can be, and often are, a much larger fraction of all sales in a county, particularly when there are so few transactions. This distorts the perception of home values.
When the number of foreclosures starts to decline, which it must do fairly soon, then home prices will at least stabilize and lenders will feel more comfortable writing mortgages. But in the meantime, it would be helpful if we could separate out foreclosure sales from all others.
We can only do that from data collected on the New Hampshire Realtor survey, which you can fill out for each transaction. So please go to the survey site by clicking here and answer a few quick questions to tell us about your recent sales. We will report the results next month.

Table I: Residential (non-condo) unit sales for Feb. 2009 and income/price ratio

County	Units sold	% change	Median price	% change	Income to
	Feb. ’09	2008-09	Feb. 2009	2008-09	price ratio
Belknap	35	17%	$145,000	-21%	4.1
Carroll	44	26%	$157,450	-20%	4
Cheshire	27	-7%	$159,000	6%	3.3
Coos	14	-26%	$58,500	-53%	2.4
Grafton	23	-48%	$137,000	-31%	3.8
Hillsborough	146	11%	$199,500	-24%	3.7
Merrimack	49	-22%	$187,000	-15%	3.8
Rockingham	103	-31%	$241,000	-15%	3.9
Strafford	45	-20%	$185,000	-13%	3.9
Sullivan	19	-24%	$133,500	-26%	3.6
Statewide	505	-14%	$184,900	-20%	3.8

Table II: Residential (non-condo) unit sales for first two months of 2009

County	Units sold	% change	Median price	% change2
	YTD ’09	2008-09	YTD 2009	2008-09
Belknap	59	0%	$160,000	-27%
Carroll	75	7%	$155, 000	-22%
Cheshire	50	-9%	$167,650	12%
Coos	36	20%	$58,000	-54%
Grafton	57	-25%	$140,000	-29%
Hillsborough	274	-1%	$215,000	-16%
Merrimack	88	-36%	$197,950	-10%
Rockingham	193	-29%	$240,000	-16%
Strafford	94	1%	$178,750	-17%
Sullivan	35	-30%	$145,000	-8%
Statewide	961	-14%	$190,000	-19%

Source: NNEREN and US Census Bureau household income estimates

NH Real Estate Professionals Jay and Monika McGillicuddy

Jay and Monika McGillicuddy, covering southern NH and the Seacoast area. If you’re thinking of selling or buying a southern NH or Seacoast area home give us a call…we’d love to help make your home ownership dreams come true.
Jay and Monika McGillicuddy, NH REALTORS

603-944-9172 direct

E-mail Jay and Monika

Prudential Verani Realty

603-926-3648 office

Oh the Real Estate Market has been frightful…

New Hampshire November 2008 Market Trends report.

This months market report by Demographer Peter Francese was just released by the New Hampshire Association of REALTORS and as always Peter Francese calls it the way he sees it. “Say goodbye to a frightful 2008 and hello to a better 2009″… I sure hope he is right because for many 2008 was frightful and it would be nice if 2009 is delightful although I’d settle for better.

Say goodbye to a frightful 2008 and hello to a better 2009
-by Peter Francese
The mother of all ice storms took out the electricity for well over half of all New Hampshire homes on December 12 and cost a great many homeowners and businesses dearly. The loss of power at home and at work seemed to many as the final insult of what has been a year of losses in jobs, the stock market and housing.

Of all the owner occupied homes in our state, less than 1 percent are in foreclosure.

The uncertainty about the economic outlook combined with the steady stream of bad news at the national level has made it hard to be happy during this holiday season, or optimistic about the future. Yes, from an economic point of view our state has fared much better than most, but it sure doesn’t feel like it.

Before we put 2008 behind us, which is where it belongs, let’s look at what happened in out state so we can think about how best to move on to what we believe will be a better year in 2009. Projecting forward a month, it looks like New Hampshire Realtors will have sold about 10,000 residences and 2,700 condominiums during 2008. It’s been over 10 years since that few units were sold here. Residential sales for 2008 are projected to be down almost 20 percent from 2007, but condo sales may be 35 percent below their 2007 numbers.
That uniquely large multi-year deterioration in home sales has resulted in a $3 billion loss of annual sales volume since 2005, prompting the question: What is likely to happen next year to turn around this slide in home sales? The short answer is lower interest rates and fewer foreclosures. Long time Seacoast Realtor Betty LaBranche would like to see interest rates go below 4 percent, at least for a few months. More about rates below.
Regarding foreclosures, The New Hampshire Housing Finance Authority’s latest report estimates that by the end of this year nearly 3,600 New Hampshire homes will be foreclosed on, up 72 percent from about 2,100 in 2007. Shocking, huh? Well, that 2008 number is only 1.3 percent (about 1 in every 75) of the approximately 270,000 owned dwelling in New Hampshire with a mortgage. But 30 percent of New Hampshire owned homes (a little over 100,000 homes) have no mortgage at all. So of all the owner occupied homes in our state, less than 1 percent are in foreclosure.
The problem for New Hampshire Realtors is that 3,600 is 16 percent (or 1 out of every 6) of the approximately 22,000 new listings on NNEREN so far this year. (That pretty much confirms our October survey results showing 18 percent of sales due to a foreclosure. )
Perspective is crucial if we are going to deal constructively with this issue.
Perhaps the best news is the lowering of the Fed funds rate to near zero, which means that we are likely to see loan rates in the 4 to 5 percent range by early spring, or even below 4 percent if Betty LaBranche gets her wish. But that presumes mortgage lenders want to actually provide the funds to would-be home buyers. The intensely risk-averse behavior on the part of lenders (which is somewhat understandable) will have to be replaced with more confidence that the borrower is good for the money.

This is, without doubt, the nastiest recession any of us have ever witnessed. The most precious commodity at such a time is confidence that things will be better in the future. The one thing New Hampshire Realtors can have confidence in is that our state is in the best economic position of any New England state and so is likely to recover sooner. Our employment growth rate (Chart I) is the highest and our unemployment rate (Chart II) is the lowest in the region, plus our index of economic activity (Chart III) is fourth highest in the nation.

However, despite all that, the table below shows pretty clearly that economic decline combined with the financial meltdown crippled November sales particularly badly in Grafton and Sullivan counties. But in the face of the gloomy economic outlook, prices held up the best in Hillsborough and Strafford counties.
Best holiday wishes to all my readers and here’s hoping for a more uplifting 2009.

November 2008 NH residential (non-condominium) sales

County	Units	% change 2007-08	Median	% change	YTD units	% change 2007-08
County	sold	% change 2007-08	price	2007-08	sold	% change 2007-08
Belknap	35	-29%	$169,900	-31%	545	-20%
Carroll	41	-25%	$185,000	-25%	598	-14%
Cheshire	29	-38%	$173,700	-12%	589	-10%
Coos	25	-11%	$84,800	-30%	283	-12%
Grafton	34	-46%	$167,500	-24%	617	-25%
Hillsborough	184	-20%	$232,500	-10%	2,571	-13%
Merrimack	77	-21%	$207,300	-20%	988	-23%
Rockingham	164	-17%	$255,850	-15%	2,146	-12%
Strafford	55	-15%	$212,700	-10%	821	-19%
Sullivan	19	-44%	$180,000	-42%	328	-26%
Statewide	663	-23%	$215,000	-17%	9,486	-16%

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.

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®.