The housing market may be cooling off this spring, but real estate agents don't expect a crash
By LISA ARSENAULT
Concord Monitor staff
June 11, 2006
When Liam Moquin moved to Pittsfield from Manchester a year ago, he was able to sell his home in two days. Now he's moving to Maryland, where he has a new job and new home waiting for him. The only problem is, he hasn't found a buyer yet for his place in Pittsfield, thanks to a cooling real estate market.
"I'm a little concerned," Moquin said. "We had an open house last week on Saturday and Sunday, but nobody stopped by. I've already reduced the price."
Local real estate agents say the state's market has remained flat this spring, a season in which sales generally pick up for the busy warm-weather selling season. Properties are staying on the market longer, some sellers are dropping prices, and buyers have more time and bargaining power, they say.
"Buyers and sellers are now on an even keel," said Nancy Morrison, a longtime agent with The Masiello Group in Concord. "What we're dealing with now is the shock from the sellers that they no longer control the market."
For the past five years, the market has boomed nationwide. Low interest rates and a shaky stock market following the Sept. 11, 2001, terrorist attacks helped fuel the market, according to Exeter demographer Peter Francese. Now interest rates are creeping back up, high gas prices haven't helped and people are investing again in the stock market instead of real estate, Francese said.
The boom is most likely over, local real estate agents agree, but it doesn't mean the market is crashing. Homes are still selling, and prices are still rising overall.
After 2001, it was not unusual for particularly hot selling regions to see price increases in the 40 percent range, according to Paul Griffin, executive vice president of the New Hampshire Association of Realtors. In New Hampshire, he said, prices increased as much as 10 percent from 2003 to 2004. Prices are still going up, he said, but not as much. The average price of a home in New Hampshire this spring is $300,500, up 2.6 percent from last year.
"The key is realistic pricing,"said Barbara Ruedig, a Concord real estate agent with Ruedig Banzhoff Realty. "It's not the bullish seller's market we had a few years ago. Things do sell, but it's taking longer."
In Concord, the average price of a home has decreased 1.1 percent, to $267,196.
Because rents have remained high and the rental supply is low, buying a home is becoming a more attractive option, Ruedig said. Ruedig's daughter Catherine, 27, just moved back to Concord from New York. She was considering renting but found that she could buy a home for close to the same monthly payment.
She found a good deal on a three-bedroom house in the South End and jumped on it right away at the advice of her mother. She declined to say how much it cost; the paperwork is not final.
"In terms of what there is to rent, there's not much, and the prices are high," she said. "This way, we're paying a little bit more but we have more to show for it."
A year ago, it was difficult to find a house in Concord listed below $250,000, said real estate agent Brenda Perkins Anukem, of Kathleen Gallagher Family Realty. A check of the listings now shows 45 houses for sale under $250,000, she said.
Ruedig said homes priced below $250,000 still get snatched up fast. An agent with Ruedig's firm who listed a house near White Park below $200,000 drew eight prospective buyers in two days.
"Low-priced homes are still very difficult to find," she said.
Homeowners who want to sell but don't want to lower their prices may try to wait out the cooling market.
Concord homeowner Lisa Brown, who is looking to sell her home near Beaver Meadow, has already found the house she wants to move into, but she is hesitant to put her house on the market right now.
She is thinking of renting the house for a year instead to see if the market rebounds. The house is a small brick Tudor built in the 1930s. Because the house has some unique architectural features,Brown says she is not willing to drop the price below $299,900.
Despite the flatter market, affordable homes are still hard to find anywhere in the state, according to Griffin and Jane Law of the New Hampshire Housing Finance Authority. Law's group helps low-income families and first-time homebuyers with financing. Law said any price-softening has been in the upper end of the market.
Rosemary Heard, executive director of the Concord Area Trust for Community Housing, said her group has seen the same trends.
Because the demand for affordable housing is growing all the time and inventory is not keeping pace, the cooling of the real estate market probably won't help, she said.
"We're still seeing increased home prices and a continued shortage of affordable housing across the board," she said. "It's still a supply-and-demand issue."
Mary Cowan, a real estate agent with Cowan & Zellers in Concord, said the market cooling is not something people should be very concerned about.
"For some people who haven't been in real estate that long, this softening is a little scary," she said. "Frankly, this is the way it used to be. Yes, sellers are going to have to really look at their pricing but properties are still going under agreement."
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