New Hampshire Year End Market Report

By Monika McGillicuddy

The New Hampshire Association of REALTORS just released our market summary. This document is pretty fascinating especially if you're a home seller in New Hampshire.
Peter Francese does a great job analyzing all the data provided by NNEREN which is our MLS system.
Interesting stats for Rockingham County being down 24% in total units (excluding condos) sold compared to 2005 yet the average sales price for Rockingham County was only down 1% compared to 2005.
Rockingham County had the biggest hit in declining sales followed by Hillsborough County which had a 22% difference from 2005 figures. The December 2006 home sales figures available from NNEREN show that Statewide, about 2,900 fewer homes (an 18 percent drop) were sold in 2006 compared to 2005. But the average sale price remained close to 2005 figures at $306,000, compared to $311,000 the previous year a 2% drop.

Looking for more NH market information check out my other blog for great consumer tips.

The report is reprinted below in it's entirety with permission from NHAR.

Jay and Monika McGillicuddy

Prudential Verani Realty

Hampstead NH  

						JANUARY 2007
	Reno to New Hampshire: Let's market our state to more than just tourists -by Peter Francese The Chancellor of the University System of New Hampshire, Dr. Stephen Reno, has put forth this great idea: a big marketing campaign aimed at convincing just 10 percent more of our state’s college graduates to stay here after they graduate.
						... Over the next few years, we hope that more young people, who now number 125,000, may want to stay here.
	He estimates, rather conservatively, the benefit over the next five years would be about 3,100 more workers and, with their $45,000 average annual earnings, an economic lift of over $600 million.  But, he adds: “The success of a retention program in New Hampshire will depend absolutely on our ability to inventory, post and market exciting and rewarding jobs, and make students aware of these opportunities. … It will take more than a village to get this done.”
	He’s right about the village part. This is a terrific idea, but what will happen when these recent college graduates go looking for a place to live and find nothing they can afford? There are a lot of reasonably priced condominiums they could buy or rent, but the bulk of them are age restricted to residents 55 or older.   New Hampshire Realtors can do their part by taking every opportunity to remind every planning board or town board members with whom they come in contact that providing workforce housing for the next generation is essential for the future of our state’s economy.  And also remind them that allowing workforce housing will not increase their property taxes, because our school age population is shrinking. Over the past five years, the Census Bureau estimates that the number of 18- to 24-year-old young adults in our state has increased by 20,000 people, a 19 percent jump compared to a 6 percent increase in all residents.  Over the next few years, we hope that more of those young people, who now number 125,000, may want to stay here. But if towns in our state don’t provide enough affordable starter homes or rental units for them, you can be sure there will be plenty of both types of housing in the magnet states of the South Atlantic region that have been, and are, attracting so many of our young graduates. * * * * * The December 2006 home sales figures are now available from NNEREN, and here’s what they show:  Statewide, about 2,900 fewer homes (an 18 percent drop) were sold in 2006 than in 2005. But the average sale price remained pretty close to 2005 — at $306,000, compared to $311,000 the previous year. The sales data also shows that statewide about 1,000 fewer condominiums were sold in 2006, also an 18 percent drop, with average price of $207,000 versus $204,000 in 2005. The relative stability of prices here compared to elsewhere suggests that at least in this state, potential buyers in the spring of this year may not be as concerned about a future decline in the value of their home as they might have been in mid-2006. The most recent (2005) Census Bureau population estimates suggest that demand for housing in New Hampshire from retirees and second home owners is likely to remain strong for quite some time. The Bureau estimated a 15,000-person increase in New Hampshire residents ages 65 or older. That’s a 10 percent rise from 2000 to 2005, compared to no increase at all in the other five New England states. That suggests quite a few retirees are moving here from other states in this region. The age group with the highest incidence of second home ownership are people ages 55 to 64.  The Bureau estimated a 25 percent jump in that age group, both nationwide and in New England.  Nationwide, that meant a 6 million person increase. But in the other five New England states, which had virtually no population increase since 2000, that 25 percent jump meant an increase of over 280,000 persons ages 55 to 64. Most of this age group are Baby Boomers (who are now ages 43 to 61).  Here’s what Dr. Karl Case, a noted real estate economist, said about them in a recent report for the Boston Federal Reserve Bank’s New England Public Policy Center:   “Boomers look at housing as previous generations looked at cars and TVs: rather than owning just one house, in many cases they own two, and sometimes three or four.” As the housing market recovers its footing, it would seem that one of the bigger drivers of demand here in New Hampshire will be second or even third homes. But Dr. Case also points out that a large fraction of future primary home housing demand in New England and elsewhere is likely to come from immigrants. So the next time you hear someone bashing immigrants and suggesting that we must cut off all immigration, remind them that it may very well be a first or second generation immigrant who will purchase their house when they need to sell it. Trends in New Hampshire residential home sales (excluding condos): 2005 to 2006 percent change County Units sold 2006 Change from 2005 Average price 2006 Change from 2005 Belknap 838 -15% $329,000 1% Carroll 915 -13% $342,000 7% Cheshire 882 -6% $237,000 2% Coos 410 -5% $135,000 7% Grafton 932 -11% $267,000 -1% Hillsborough 3,497 -22% $320,000 -1% Merrimack 1,439 -18% $284,000 -1% Rockingham 2,622 -24% $377,000 -1% Strafford 1,256 -19% $268,000 -3% Sullivan 545 -9% $234,000 -4% Statewide 13,338 -18% $306,000 -2%   Statistics are based on information from the Northern New England Real Estate Network (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

Is Perception.... Reality in New Hampshire's Housing Market?

By Monika McGillicuddy

A special addition of the New Hampshire Association (NHAR) of REALTORS® Market trends written by Peter Francese was just released. It is pretty interesting and I've reprinted it below in it's entirety with the blessings of NHAR.  The comparison used is buying a flat panel HDTV and buying a house..While still expensive people still buy the TV..don't they? Even though those High-def TVs have come down in price since last year...they are still pricey and everyone knows that prices could likely be lower still next year,

yet people buy. Peter goes on to say it is a "phenomenon worth noting" because it is a comparison that relates to the New Hampshire housing market. 

Buyer's who are not in a hurry will wait it out because they believe prices will likely come down and be more affordable in the future...it is a far cry from the attitude of just last year when buyers bought quickly in fear of prices rising.  Last year multiple offers were the norm and buyers frantically tried to out bid each other to buy their dream home.   Peter goes on the explain the importance of the ratio between wage increases and home prices.  This is something to consider as we try and figure out where New Hampshire home prices are going.  Questions about the market or homes contact me here or e-mail me. To read the latest state wide market report full of stats, visit my blog here .

December 2006

Consumers' perceptions are key to home buyer actions

by Peter Francese

By Monika McGillicuddy

The New Hampshire real estate market is definitely what I would call a buyers market. No doubt about it! So while it's pretty cold up here IT IS a GREAT time to be a BUYER  in New Hampshire.  Not only is there a good selection of homes available but prices have dropped and in some case more than 10% compared to a year ago. All this makes buying your first home or investing in real estate a great opportunity. 

If you're a buyer and you've been saving for that dream home...not sure if you're there yet and confused about Private Mortgage Insurance or if you are a REALTOR and have a hard time really explaining Private Mortgage Insurance to your buyers or better yet why they have to have it.

Read on because I know I have struggled with it...so I asked one of my favorite Mortgage Consultants to blog about PMI and the little gift Congress recently gave many folks this season. It might make a difference to someone on the fence about buying...sometimes there is no better time than the present..to give yourself the gift of home ownership...of course if you need a good REALTOR call me.

So here is Dave Antczak's take on it....

PMI……private mortgage insurance.  It’s designed to protect the lender against losses should the borrower default on the loan, especially in the first few years.  

Until recently, mortgage consultants and borrowers would jump through hoops in an effort to avoid it when the borrower didn’t have 20% to put down on a house. 

The typical ways to minimize the cost of PMI were to either use tax advantage mortgage insurance, (also known as TAMI), where the lender would build the cost of the insurance into the rate or roll it into the loan as a lump sum; or they would use a “piggy-back” loan, in which the borrower would have an 80% first mortgage, (thus avoiding the PMI requirement), and then a second mortgage to cover the difference between the down payment and the remaining 20%.  Though the second loan has a higher rate, a “piggy-back” is often less expensive than PMI. 

These options don’t always work for every borrower, however.  Kevin Schneider, president of the PMI firm, Genworth Mortgage Insurance, estimates that in the coming year, 1 million buyers will sign up for mortgages with PMI.

But due to an early Christmas present from Congress, many more folks will now be able to save a little on PMI. 

Early on Sunday morning, lawmakers made it possible for many homeowners to receive a tax deduction for their PMI.  Homeowners with less than $100,000 in taxable income are eligible, and will average a tax savings of around $300, according to experts.

“It enables folks of low to moderate income, the traditional first-time home-buyers, to get into a low down-payment mortgage,” said Schneider.

But here’s the best part.  By taking advantage of the seldom utilized TAMI tactic referenced earlier, in which the PMI cost is rolled into the mortgage, borrowers can save even more.  It’s always been the best way to go according to many, including TV financial advisor Suze Orman, because it increases the interest deduction and adds less to the monthly payment.  And now with the new tax rule, the entire up-front premium becomes tax deductible the first year. 

On a $200,000 mortgage, that translates into a Christmas gift from Congress of over $1,000……not bad.  Happy Holidays!

David Antczak

Home Loan Consultant

617-510-1112 - mobile

david_antczak@cmvhomeloans.com

New Hampshire Real Estate Market Trends II

November/December 2006

It's been a cold year for real estate

by Peter Francese

November may have seemed warmer than usual here in New Hampshire, but there’s a deep chill in real estate. Three of my neighbors perfectly illustrate how the sales statistics, unpleasant as they are, do not completely reflect just how hard this market shift has been on Realtors.

Each of these three neighbors has put his or her house up for sale in the past year. There have been several open houses and dozens of showings, at no small cost to the Realtors involved. But none have sold, and now all three properties have been taken off the market. In at least one case, the reason was an unrealistic price expectation.

None of these “No Sale” examples will show up in the statewide data, nor are the hundreds of unpaid hours the Realtors spent recorded anywhere. Such are the limitations of real estate information systems we have.

What the data from the Northern New England Real Estate Network (NNEREN) and the New Hampshire Housing Finance Authority (NHHFA) does show is that when homes have sold, the average price was virtually the same as it was a year ago. But the number of homes sold is down significantly.

During the first 10 months of 2006, according to NNEREN, the average residential sale price, not including condominiums, was $309,000, which was only $1,000 less than during the same period last year. But the number of units sold dropped 19 percent, from just over 14,000 to under 11,400, and sales volume fell by over $800 million.

Condominium sales did not fare much better. The average sale price during the first 10 months of 2006 was $207,000, down just 3 percent from the $201,000 during the same period last year. But the number of units sold fell 18 percent, from 5,000 to about 4,200, and sales volume dropped by about $160 million.

When 2006 is finally over, residential sales volume in New Hampshire will be at least a billion dollars below last year. That’s damn cold.

The question is: What about next year? Next year’s sales may be better, but it will depend to some extent on an increase of jobs in our region (which have had virtually no growth in the past six months) and a continuing desire of Baby Boomers to own two or more homes.

We may be in a situation where the lack of affordable workforce housing is having a significant impact on the ability of employers to find workers. This suggests that perhaps the prevalence of growth moratoriums in New Hampshire towns is having a negative effect on our workforce growth.

As the table below shows, residential home sales, excluding condominiums, declined in every county for the first 10 months of this year versus last year. The average sale price rose in half the counties, but was flat or declining elsewhere.

Cool tools....check out New Hampshire Market Trends

The New Hampshire Association of REALTORS website has an awesome section on Market Trends written by Peter Francese. Check it out and if you are a REALTOR member be sure to log in and explore all the neat sections of this great REALTOR site.

 monika@monikamcgillicuddy.com