Trends in NH Real Estate

The January 202 New Hampshire residential numbers are in...volume is up in Hillsborough County and across the state. With the current interest rates and great value in homes today, we expect to see more of this for the rest of the year.

What do you think?

Check out the report here

Back to the Future? 1991 vs. 2011

The Holidays and 2011 has come and gone. Leap Year Day  and the New Hampshire Primary and has come and gone.  Housing was used as a wepon by both encumbants and hopfulls this primary season, but as the snow settles, lets now look back at what really is going on in the state and around the corner.

To do this, lets pull the lense back. Back a few years to 1986, not because of the great year for Boston sports, but because it was a great year for New Hampshire Real Estate. With 58,000 total real estate deed transfers in the state that year, it was the highest on record and the lowest foreclosure percentage in the 35 years, we have had this statistic measured. In the five years that followed we saw the foreclosure rate rise (to higher levels than our current challenges) and the transfer of property seize up. From 1991 through 1996 our real estate market expanded. Total property transfers increased by almost 20%; the total percentage of foreclosure transfers dropped from a peak of just under 20% to almost 6%; interest rates dropped for a 30 year fixed by 2.5% and our state created almost 50,000 jobs. 

So what does this history lesson tell us? What does where we are today have in common with our non so distant past of the early ninties? What is different?

For starters consider the graph below. While the total transfers of real estate in the state is not the only measure of recovery it is a good indicator of what consumers and corporations are feeling in terms of confidence to make a long term purchase. What we feel is similar is the increase in total transfers of real estate from 2009 through 2011.

Real estate is a reaction to stability and the comfort people have in choices. Not shown on the above graph is the 20,000+/- jobs that have been created in the state since December of 2009. Also not show is the decrease in a 30 year fixed interest rate by about a half of a point over that same span. We see this all as a positive indicator. Recessions and recoveries are cyllical and we see this year as a turning point for that recovery in the state.

No analysis would be complete, however without a look at some of the differences in the cycles. In 1986 the decline in the market was like slamming on the brakes, but we arrived at our current condition by pumping them. Our recovery beyond 1991 was shown with a spike in foreclosures up to 20% and then a slow recovery year over year, but because currently we had no spike we have remained around 15% foreclosure rate for the past few years.

Overall we believe that the recession and recoveries of two decades ago share more in common that what they are apart. However because this go around did not have the “shock” decline effect, we feel that it will be a bit slower to recover as there are still issues to work out. Surely no one in 2012 is slamming on the gas, but we feel that people are staying away from the brake petal.

Cold Weather and Snow Anyone?

At the risk of jeopardizing things, Mother Nature has given us a very quiet winter. With the distinct exceptions of Halloween and Leap Year Day, we have been given very little in the way of snow fall or in the way of cold weather. Perhaps you even saw spring flowers making their way up or a golf friend getting ready for some March tee times. For us as home or condo owners, the question is… what does this weather mean for us?

Depending on where you live and how you operate, you may plow your own driveway or hire a neighborhood kid to help shovel. Perhaps you hire it out to a contractor or perhaps you are part of an association that does it for you. The question for homeowners this year is “Do you pay by the storm?” if the answer to that is yes, then you may be in the money as it relates to that part of your budget. If you are part of an association you may want to ask the home owners or condo association how they budget and contract.

Flower confusion aside the warmer weather has also meant a gentler heating season than in years past. Foreign and domestic oil volatility has kept prices high, but the net affect for most home owners is a more favorable heating season. Perhaps you purchased a few cord of wood, and only used some of it. Or perhaps you only needed to fill the tank once or partially instead of a few times. No matter what we hope that you have come out ahead.

If you have been the beneficiary of some unspent fuel or snow plow budget funds how are you going to allocate them? In a recent WMUR article, the State Department of Transportation is going to use the unspent snow plowing monies on road improvements that otherwise would have been pushed back. Can we as homeowners do the same?

Where can we invest these dollars to earn more value? Can the extra money you saved go to improvements such as better insulation in your attic? What about looking into weather stripping around your doors or windows? What about recycling the old AC window unit and purchasing a more efficient one.

If you are part of a home owners association or a condo association, ask the board or the management company what these unspent dollars could be used for around the grounds.

Mother Nature may not be through with us just yet, but if she decides to let the flowers grow and we are fortunate enough to walk away with a few dollars in our pocket, think of what we can do to help next winter.

Chris Norwood