Dollars For Dumps – Lakes Region of NH Real Estate Market Report 8/7/09
Across the nation there are signs of recovery in the housing market with sales of existing homes rising 3.6% in June and new home sales taking a big jump with an 11% increase. Much of the increase is said to be attributed to the $8,000 tax credit for first time buyers. This highly successful program which ends Dec. 1 will hopefully be extended, increased, and expanded to include all buyers to further jumpstart the ailing housing markets. I believe the success of this program is due to the simplicity of the program that utilizes the good old basic tax credit as the incentive to buy.
On the other hand, the highly touted government plan to help troubled homeowners modify their mortgages is probably having as much trouble as the homeowners themselves. According to the AP, the plan has a goal of helping 3 to 4 million troubled homeowners yet only about 200,000 homeowners have been enrolled in the 3 month trial loan modifications. It seems like the government is blaming the mortgage companies for dragging their feet in implementing the program while the mortgage companies say the program is anything but easy to implement, difficult to administer, and requires the hiring and training of thousands of employees. Hopefully, they will get the bugs worked out of the program.
Another government stimulus program, the popular Cash for Clunkers, is intended to help get inefficient gas guzzling autos of the highway and spur on new car sales by paying up to $4,500 for each clunker traded in for a more fuel efficient inefficient vehicle. It has been so successful that it burned through its entire initial budget of $1 billion in a week! While there is some concern on the part of many dealerships about not getting paid for the deals in progress and lots of problems with paperwork and government red tape, the program has been hugely successful but perhaps a bit wasteful. The program requires that the “clunkers” that are traded in must be destroyed and not resold even though they are perfectly usable automobiles. Based on the proliferation of not so nice bank owned and other practically uninhabitable properties in the marketplace today maybe the clunker program should be applied to the housing industry in some fashion? All we need to do is print more money, acquire these uninhabitable properties, and tear them down to create nice building lots or green space. That’s one way to lower the inventory. We could call it “Dollars for Dumps”. I am kidding of course, especially about printing more money…
The dog days of summer might finally be here now that the monsoons have ended. Property showings seem to be increasing as the long awaited summer time home shoppers finally realized that it is actually summer. We badly need buyers to whittle away at the 23 month supply of residential homes on the market in the towns represented in this Lakes Region of NH report. Last August we had slightly more homes on the market (1313) but both the average list price of $530,246 and median list of $299,246 were lower than this year!! Prices should be coming down, not going up. Over the past 12 months the average sales price for a single family home was $290,369 and the median sales price was $198,000 which are both dramatically lower than the average and median asking prices showing once again that it is mostly the lower priced homes that are selling.