Housing Market Blues

Yet further evidence that the housing market in New Hampshire is now in a slump appears in today's Union Leader (Manchester,NH). In a report by Gary Rayno (sorry, no link available...yet), it appears that home selling prices have declined 7 percent as compared to last year.

Statistics from the Northern New England Real Estate Network show the number of home sales down about 11 percent from a year ago, but up about 3 percent from October.

The average selling price has decreased 3 percent in the last month to $291,712 and has dropped 7 percent from a year ago when it was $314,077. Housing is also on the market longer, taking an average of 111 days to sell compared to 85 days a year ago.

This article differs from others I've linked in other posts, particularly when it comes to the average length of time a home is on the market. I've seen figures ranging from 182 days now compared to 134 days a year ago. Both of those figures are highest I've seen reported. Regardless, it is now a buyer's market.

The total volume of sales is down almost 20 percent from a year ago.


[Kathy] Corey Fox [president of the New Hampshire Association of Realtors] said today's market is a good opportunity for buyers with interest rates still good. A home is still a good investment, she said, it's just not appreciating as fast as it did several years ago.

Some homeowners have pulled their houses off the market because they can't get what they want for their homes. In some cases they need to get their asking price otherwise they'll be upside down on their mortgages, meaning they'll owe more on their mortgage than the house is worth.

“It's a market that's correcting itself” said Corey Fox, “We were spoiled in 2004 and 2005 with double digit increases, but that's abnormal.”

It didn't help that housing prices increased at many times that of wage increases over the same period, which placed many homes out of the reach of potential homeowners. That hasn't helped the housing market, but it's possible that with the demand falling off and prices coming down that the market will rebound. Those locked out of buying a house in the past may now find it possible to afford a home.

There are a few exceptions in this slow market, however.

Many of the homes for sale in our immediate neighborhood are seasonal homes, meaning the sales demographics are different. Most of the owners of these properties are in no hurry to sell, willing to wait out the market slump. But seasonal/second homes are a small portion of the market and don't have as much influence on the sales figures in the broader market. Also, seasonal homes tend to buck market trends, with sales staying steady regardless of the state of the rest of the market, at least in this area.

No matter how one looks at it, the housing market is in a slump. It is one of those good news/bad news kind of economic news: it's bad for sellers, but good news for buyers.

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