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NH Legislature: NH Real Estate Update January 2010. Russ Thibeault Applied Economic Research. Research Support Provided By:. Conclusions. The worst of the real estate downturn has passed Markets are generally stable, but at far lower levels than we would like to experience - PowerPoint PPT Presentation
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NH Legislature:NH Real Estate
Update
January 2010Russ Thibeault
Applied Economic Research
Research Support Provided By:
Applied Economic Research 2
Conclusions
• The worst of the real estate downturn has passed• Markets are generally stable, but at far lower levels
than we would like to experience• The outlook is for a gradual improvement during
2011 provided:– The number of new foreclosures drops somewhat– The state and national economies do not double dip– Interest rates don’t rise dramatically
3Applied Economic Research
Sales Show Modest Recovery, But Remain Well Below Their Peak
• In 2010, about 12,500 homes sold.
• Sales were down slightly from 2009 levels
• 2010 is down 45% from peak levels
4Applied Economic Research
Prices Are Stable
• Median price averaged $205,000 in 2010
• Up about 1% over 2009
• Down 27% since peak in 2005-06
• Matches or exceeds price drops in early 90s downturn
5Applied Economic Research
Inventory Remains High
• 15,000 Unsold Units at Year End
• Has Been Dropping at a Very Modest Rate Since 2007
• Twice the Level of Earlier in This Decade
6Applied Economic Research
Effective Inventory
• Would Take 15 months to sell off the units listed in the MLS system
• Not getting worse, but improvement is modest.
• 6-9 months is normal—supporting reasonable price increases
• Remains a buyers’ market
7Applied Economic Research
Housing Recoveries Are Slow Boats• Took nearly a
decade for NH prices to get back to peak levels in the last major downturn
• Job growth was strong then
• Real recovery has yet to surface this time
8Applied Economic Research
Primary Factors Driving the Market
• The overhang of foreclosed properties• Job and Income Growth• The Pace of New Construction• Interest Rates/Credit Availability• Affordability• Consumer Confidence
9Applied Economic Research
Foreclosures Are a Problem—Wet Blanket on This Market
• 2010 will be a record year with about 4,000 foreclosure deeds
• 10 times normal level
• Represents about 25% of the properties sold in the MLS system
10Applied Economic Research
NH Economy is Improving, Reversing Recent Pattern
11Applied Economic Research
Few New Units Being Built: A Mixed Blessing
• Fewer than 2,000 units added in 2010—lowest pace in 40 years.
• Helps keep unsold inventory from growing.
• But: Extreme hardship for the building community
12Applied Economic Research
Mortgage Rates Remain Very Low
13Applied Economic Research
Affordability Is Dramatically Better
14Applied Economic Research
Rental Market Conditions—No Dramatic Rent Change, But Vacancies Have Risen
Rent Increases Have Moderated Vacancy Rate Has Increased
15Applied Economic Research
Outlook
• Improving economy should help stem new foreclosures.
• Improved affordability helps marketability, adding liquidity to the market.
• Most economists anticipate higher interest rates, which will keep the housing recovery modest.
16Applied Economic Research
Prediction
•Patriots will win the Superbowl!
17Applied Economic Research
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