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More Balance In New Hampshire Housing Market

Written by Posted On Thursday, 30 March 2006 00:00

Home buyers in New Hampshire, the nation's most livable state, are getting a boost from growing inventories of homes for sale and home price appreciation a fraction of what it was in recent years.

Conditions this year allow buyers more time to shop around, more leverage to bargain over prices and a greater hope the spring thaw will further pry loose the icy grip sellers' have held on the market for most of the decade.

New Hampshire, a Morgan Quitno Press three-peat as the nation's "Most Livable State," has enjoyed home price appreciation averaging 13.5 percent during the past five years, higher than the national average of about 11.5 percent, according to Office of Federal Housing Enterprise Oversight (OFHEO).

That state-vs.-nation position flip-flopped in the fourth quarter of 2005, when the Granite State's year-to-year average home price appreciation dipped to 9.77 percent, lower than the national average of 12.95 percent, according to OFHEO. Among all the New England states, only Massachusetts had a lower fourth quarter rate of year-to-year home price appreciation -- 8.21 percent according to the federal agency.

Blame higher interest rates, escalating home prices and a media feeding frenzy for scaring off buyers, leaving the market flush with homes for sale and depressing the rate of home price appreciation.

"During a three-month period last fall there were articles about the bubble (bursting) and all that got people nervous and they wanted to wait and see what happened. There were a bunch of different contributing factors," said Patty Harpin, co-owner of Gove Group Real Estate, LLC in Stratham, NH.

More recently, the Northern New England Real Estate Network (NNEREN), which tracks the market, said the average home price rose only 4.8 percent from an average $245,395 during the first 10 weeks in 2005 to $257,140 during the same period this year.

Meanwhile, home sales tumbled 10 percent, the Network said. The figures include all housing, new, existing, single-family, condos and manufactured homes.

"With the amount of inventory, buyers have no choice but to take more time. It used to be they had six houses to look at in their price range and now you may have twice as much. It really does give buyers more options," said Harpin.

While no one is raising the buyers' market banner of victory just yet, sellers' no longer maintain sole control.

"What has become evident is that there really are some significant values among the mostly overpriced listings that clutter our multiple listing service, and those homes sell pretty fast. Where the sellers are motivated and the properties are priced right, are clean and ready to go, the homes are selling. Where there is still a level of greed (unrealistic financial expectations left over from the last few years' banner markets), or a lack of motivation to prepare the home for sale, or to negotiate, the homes just sit," said Dane Hahn, broker/owner of Exit 11 Real Estate in Stratham, NH.

Buyers who took an investor's or more speculative approach to New Hampshire home buying in the past year or two are also beginning to sweat smaller returns.

"The slowing of price appreciation means that sellers need to start relying on the equity they have paid into their home more than on appreciation when it comes time to sell. They need to think carefully before taking out a home equity loan. If home values don't increase enough to cover closing costs and the mortgage is too close to market value, sellers could end up bringing money to the closing table instead of from it," Linda Allen with ERA-The Masiello Group, reported to's Market Conditions report.

"Both buyers and sellers can benefit from this normalized market. Most sellers are also buyers and there is something to be said for being able to get your current home under contract and then not have to rush out and buy the first place you find before the prices go up again. Buyers can take more time viewing properties, they have a better selection, and they can make a more reasoned decision," Allen added.

Experts say a spring shake out is in the works, but waiting may or may not be the name of the game, depending upon varied individual circumstances among buyers and sellers.

"For investors who are grabbing an opportunity to sell (because the market may go lower, or their adjustable rate mortgage may go higher) their motivation to sell at almost any price could be quite strong (waiting won't help.). For newly-weds who want to buy their first house, there are values if they are patient (waiting will help.). For move-up buyers, who need another bedroom, or a better school system, there are some great values, but they will probably not get all the money on the resale of their existing house (waiting probably won't help). For old-time Yankees who heard their farm might be worth a couple of million dollars -- that was last year (waiting didn't help.)," said Hahn.

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Broderick Perkins

A journalist for more than 35-years, Broderick Perkins parlayed an old-school, daily newspaper career into a digital news service - Silicon Valley, CA-based DeadlineNews.Com. DeadlineNews.Com offers editorial consulting services and editorial content covering real estate, personal finance and consumer news. You can find DeadlineNews.Com on LinkedIn, Facebook, Twitter  and Google+

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