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It’s time for renewing and preparing, not gloom and doom

It’s time for renewing and preparing, not gloom and doom-by Peter Francese   JANUARY 2007

The robust economy we have come to depend on is letting us down, and loose talk about recession is on every news channel.  And the bad news just keeps coming.  Mortgage lenders are disappearing, Wall Street’s in a deep funk, and worst of all consumers are holding back on their spending.             The best scenario that I have seen suggests that sometime around June or July of this year, the national economy may start to recover from the above mentioned maladies and more consumers will be in a house buying mood.  As much as we might like to, we can’t just hide until these grim times are over.  But we can be much better prepared for when more normal times return, as they surely will.        Experience from past economic downturns strongly suggests that the organizations in the best position to prosper when things turn around are those that use this time of slow sales to update and upgrade their websites as well as their other marketing efforts, so as to be ready when the customers return.

Here are a couple of things about the multi-faceted nature of our housing demand in New Hampshire that may help you to be ready.  As we have discussed in the past, a significant part of that demand comes from retirees and second home owners.

Many of the recent second home buyers have been investors disappointed with their stock and bond market returns, which seem to be getting a whole lot worse.  An investment in a vacation home in New Hampshire looks better and better considering that home values are still rising in those counties (such as Belknap and Grafton – see table below) where second home are most prevalent.

REALTORS® might also consider the growing number of foreign investors for whom buying a vacation home in the United States looks like a bargain given how the present day exchange rates favor them.  A small investment in creating a more globally focused website might pay off big time.

Since the pre-retirement age group of 55- to 64-year-old Baby Boomers is growing so fast, particularly here in the Northeast region, it makes sense that we will see a greater-than-usual demand over the next few years for retirement homes here in New Hampshire.  Data from surveys of older Boomers suggest that they are not necessarily interested in an age-restricted condo in the countryside.  But they are likely to want a more centrally located home from which they can work part-time.

Overall, home prices in New Hampshire have held up remarkably well considering the sharp price declines in many other parts of the nation.  Between 2006 and 2007, the average and median selling price of a New Hampshire home edged down just 0.2 percent and 1.6 percent respectively.  Those slight reductions come on the heels of five consecutive years (2000 thru 2004) of double-digit price increases.

But when we look at home sales for 2007 by three price categories, we see a more interesting picture.  Among the approximately 12,000 homes (except condominiums) sold in New Hampshire in 2007, about 7,700 — or 64 percent — sold for less than $300,000. Those homes sold for a median price of $217,000.  That was just 1.4 percent below that figure for 2006, but a full 20 percent above their selling price five years ago, in 2002.

About 4,100 homes sold last year in our state (34 percent of all sales) for between $300,000 and $1 million, with a median price of $385,000.  That median was essentially the same as in 2006 but just 4 percent above their median selling price five years ago.  In other words, the more moderately priced homes, where the majority of sales take place, have appreciated better since 2002 than the more expensive, middle-range homes.

That’s good news for the moderate-income, first-time home buyer, because it suggests that despite what national news they may have heard or read about falling real estate prices, a home that they can afford in our state has been a good investment over the past five years and is likely to be so in the future.

The top price category of homes that sell for over $1 million each is a small one. Only 165 homes in that price range sold in our state during 2007, at a median price of $1,350,000. Because the number of sales is so small, median prices can fluctuate widely.  Last year’s median, for example, was 10 percent below that of 2006, but equal to the median of 2005.

The 12,000 homes sold in our state during 2007 were 10 percent fewer than in 2006, and 30 percent below the 17,000 peak sales in 2004.  This suggests that there are at least several thousand home buyers and sellers who are waiting for the market to stabilize and possibly for the bad news to stop.  When our economy recovers, which it always has, the benefits will accrue most to those who have prepared for it instead of dwelling on the bad news.

Here’s the year-end sales data, which looks pretty good considering the nationwide drop in home starts and existing home sales.

January-December 2007 NH residential (non-condominium) sales

County

Units sold

% change 2006-07

Median price

% change 2006-07

Average price

% change 2006-07

Belknap

724

-13.6%

$238,700

0.3%

$365,501

11.2%

Carroll

737

-19.4%

$229,000

-0.3%

$335,188

-2.1%

Cheshire

688

-22.2%

$207,000

-0.7%

$231,168

-2.0%

Coos

336

-18.2%

$114,950

-3.8%

$139,730

3.2%

Grafton

871

-7.0%

$218,100

1.5%

$275,140

3.2%

Hillsborough

3,145

-10.3%

$277,900

-2.5%

$308,801

-3.4%

Merrimack

1,356

-5.6%

$249,000

-0.4%

$278,044

-2.0%

Rockingham

2,570

-2.4%

$316,000

-4.2%

$368,930

-2.2%

Strafford

1,085

-13.9%

$245,000

-2.0%

$266,144

-0.6%

Sullivan

477

-11.7%

$190,000

1.9%

$249,241

6.7%

Statewide

11,989

-10.3%

$260,800

-1.6%

$305,389

-0.2%

         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. Reprinted with permission from Peter Francese and the NHAR

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Roy Sanborn

As a REALTOR® since 2000, I know what it takes to ensure a smooth real estate transaction; hard work, dedication and loyalty to my clients, knowledge, and effective communication. It is this philosophy that has helped me to consistently be one of the top producing agents in the Lakes Region of New Hampshire. I’ve also found that helps to have a little fun along the way! My partner, Ashley Davis, and I are thrilled to be part of Four Seasons Sotheby’s International Realty and have taken Sotheby’s already amazing marketing program and philosophy one step further with the formation of our Distinctive Homes Group! I know the lakes, the Lakes Region, and the lifestyle you are probably looking for.

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