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Friday, Jan. 19, 2007
CONCORD (AP) – Sellers are asking too much for houses, which is contributing to a market slowdown, an economist told House tax writers Wednesday.
Russ Thibeault of Applied Economic Research of Laconia told lawmakers that people want about 10 to 15 percent more than what most people can afford to pay for a house.
Thibeault said sales began slowing in April. To try to attract buyers, sellers began dropping prices in August, he said. Prices have dropped roughly 5 percent over the past year, he said.
Some sellers pulled their properties off the market to wait for a more favorable time, Thibeault said.
Thibeault said the conditions that created the slowdown are unusual since unemployment andjobs. Normally, a recession or high interest rates are a key to a downturn in the housing market, he said.
“This downturn is driven by prices outstripping incomes,” he said.
New Hampshire continues to add jobs overall, but is losing better-paying manufacturing jobs, he noted.
“We don’t have enough good jobs in New Hampshire,” he said.
As incomes rise and housing prices fall, buyers will be able to afford homes again and the market will level off, he said.
Thibeault said the slowdown also will mean lower state revenues over the next two years from the tax on property sales.
The tax writers will use presentations by Thibeault and others to estimate the state’s revenues for the next two years. House budget writers will use the estimate in developing the state budget.
