This month Peter Francese tackles the foreclosure issue in New Hampshire. His reports are often hard hitting and this is no exception. We've had a busy real estate week and actually have shown a few foreclosed properties, so foreclosures are definitely increasing in our Southern NH marketplace.

While the prices of these houses are great the condition is something else. People when they lose their homes or are about to lose them will stop putting money into it. Sometimes the neglect is obvious, other times it is not. This brings to mind the house that had fine sand dumped down the toilet and the drains...not something anyone could "see" and something that caused a lot of damage. One house in Hampstead that we showed even had the sink torn out, parts of the heating system removed, lighting just pulled from the ceilings with no thought given to the damage incurred. The place basically was trashed. Once it was a beautiful home...I remember it well. The people who lost it...lived in it less than a year...the people before them for years.
The hate and despair was evident through-out the house, which once was someone's castle.

As we usually do we publish the report in it's entirety with permission from the New Hampshire Association of REALTORS.

Fearful Times Call For Fresh Thinking
-by Peter Francese
The national headlines could hardly be scarier: “Credit crunch!” “Widespread foreclosures!” “Plunging home values!” It’s enough to make even the most cool-headed REALTOR® a trifle anxious. And then the word “recession” is thrown around just to frighten us some more.

The best antidote to the fear-mongering we see around us is real and more detailed market knowledge — we need a lot more of that.

The next time you hear those phrases, please keep this in mind: It’s always the most frightening leads that get the biggest TV and print audiences – something national media firms need to survive in their hyper-competitive industry.
We know that New Hampshire real estate and economic conditions are much better than other parts of the nation, but that reassuring story has trouble competing with those that forecast imminent doom. To be fair, we certainly have economic issues to be concerned about, but succumbing to fear won’t help us solve them.

In sharp contrast to the above, on Dec. 10 the New Hampshire Housing Finance Authority quietly published an excellent report on the extent of subprime mortgages and foreclosures in New Hampshire. No hype, just the facts. I recommend it to every reader of this column. It’s titled: "Mortgage Delinquency, Foreclosures, and Subprime Lending in New Hampshire. How Big is the Problem?" It’s free and available by clicking here.
The report’s conclusion is simply this: “For those individual households the [foreclosure] process is traumatic and the economic loss is real, but their numbers are not so large as to pose a direct threat to the overall New Hampshire economy. At present more than 95 percent of New Hampshire mortgagees are current in their payments and almost 30 percent of owner occupied housing has no mortgage at all.”
The Housing Finance Authority report, however makes the disturbing forecast that, “adding more properties to the inventory on the market will continue the downward pressure on prices.” It reports that from the peak in 2006, median home prices declined only 2.5 percent by mid-2007. But then they show a chart indicating that median prices may drop as much as another 5 percent before this correction has run its course.
The only problem with that chart is that REALTORS® don’t sell medians, they sell homes, often unique homes at a wide variety of price points. New Hampshire’s economy and demography have changed radically from the time of the last housing downturn in the early 1990s. That has meant a greater variety in the types of home buyers, many of whom have no need of a subprime or any other type of mortgage.
Each month, this column provides a small table showing the latest NNEREN data on average home prices and number of sales by county. Beginning this month, we will also show median prices. Medians are preferred because occasionally averages can be distorted by a few extremely high prices while medians are less subject to that.
Whatever statistics are shown, however, there is no doubt that the real estate market in New Hampshire over the next few years will be more complex and less predictable that at any time in the past. This will create the need for tracking very detailed information about every segment of home buyers — salaried workers, self-employed workers, retirees, about-to-be retired Baby Boomers, second-home owners, and/or real estate investors.
Each market segment has different housing needs or wants, may have different financial resources, and are likely to expect a different level of service from their respective REALTORS®. The slowdown in the pace of home sales creates the mandate to get a deeper understanding of this complex and changing residential real estate market.
The best antidote to the fear mongering we see around us is real and more detailed market knowledge — we need a lot more of that.
Speaking of market knowledge, NNEREN now provides median price of sold homes as well as the average. Both are shown below for the first 11 months of 2007. It shows that the number of homes sales, not including condominiums, are an average of 10 percent below 2006 for the state and have declined in every county. Rockingham County has done the best: Home sales there are only 1 percent below last year.
Both the median and average sale price of homes have edged down statewide, but not in all counties. Belknap, Grafton and Sullivan sale prices are above the same period for last year on both measures, while Cheshire and Carroll average home prices went down but median home prices went up, indicating price declines only on the most expensive properties. The opposite was the case in Coos County where the median and average home price went in opposite directions, suggesting more price pressure on the less expensive homes.
The statewide difference between the median and average home sale price is about $44,000, but that varies between a high of $128,000 in Belknap County and a low of only $20,000 in Strafford County. This suggests that sales of very expensive properties are a bigger share in Belknap, where the top sale was $3.5 million, versus Strafford, where the most expensive property in 2007 sold for just $1.4 million.

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

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.