By BENJAMIN KEPPLE
New Hampshire Union Leader Staff

BEDFORD – New Hampshire's housing market won't improve this year, although it's possible things could turn around in 2009, a panel of housing-industry experts said yesterday.

In the meantime, some on the panel predicted more pain for homeowners: not only will foreclosures likely increase, but prices could fall even further.

"The kind of environment we're in right now encourages buyers to sit on the sideline and sellers to jump in with both feet," said Russ Thibeault, an economist and president of Applied Economic Research in Laconia.

Thibeault also said the country was likely now in a recession, and also was facing a major credit crunch -- both things that would have an impact on the market.

The good news -- such as it is -- was that house prices in New Hampshire have held up better than they have elsewhere around the country.

Jim Lyons, president of the New Hampshire Association of Realtors, said the median house price in New Hampshire has fallen about three percent since its peak in 2005: from $270,000 then to $260,800 in 2007. In 1998, that median price was $127,500. Between 2006 and 2007 alone, that fell 10.3 percent on a national basis, Lyons said.

"The New Hampshire housing market is not the Nevada housing market, the Michigan housing market ... the reality here in New Hampshire is not all that extreme," Lyons said.

Plus, the experts on the panel pointed out the present downturn is nowhere near as bad as the last housing collapse in the early 1990s. Then, the inventory of housing stock on the market was 36 months; recently, that has ranged between 10 and 15 months. Builders and lenders have been more careful, and New Hampshire hasn't seen the speculation that existed in formerly red-hot markets like Nevada and Miami.

But housing woes are still plainly and painfully evident in the Granite State.

Dean Christon, executive director of the New Hampshire Housing Finance Authority, said foreclosures had risen from about 40 per month in 2005 to 160 per month in 2007. The trend lines, he said, keep pointing up.

"We would estimate that as we go into 2008, we would see a continual increase in foreclosures -- at least 3,000 in 2008," Christon said, and they are tied directly to the slowdown in the housing market, and troubles with subprime house loans.

Thibeault also pointed out that wages haven't yet caught up with house prices.

"House prices in New Hampshire are about 15 percent higher than they should be, based on income trends," Thibeault said.

As for when things could turn a corner, the panelists generally thought things could improve in 2009. Christon saw improvement in mid- to late 2009, and Thibeault also said it was possible things could improve in that year.

Also, Kendall Buck, the executive vice president of the Home Builders and Remodelers Association of New Hampshire, said his national trade group forecasts an uptick in building permits for new homes next year compared to 2008.