Average sales price of a home in Nashua this year is $310,000

By KAREN SPILLER, Telegraph Staff
Published: Sunday, Jul. 17, 2005

NASHUA – Jim Basiliere refuses to pay $300,000 for a single-family home.

So he’s looking to become a landlord.

But the 50-year-old Hudson man has looked at more than two dozen multi- family homes over the past three months and has found nothing but disappointment. He was hoping to find a two-or-three family home to lower his mortgage, because he can’t afford a single-family home in this heated housing market, he said."

COST OF LIVING IN NASHUA The following figures are for homes sold in Nashua so far this year and over the past three years:
YEAR	HOMES SOLD	AVG. LIST $	AVG. SALES $	AVG DAYS ON MARKET
2005	364	$313,714	$310,113	63
2004	759	$295,429	$296,094	51
2003	726	$271,290	$270,973	49
2002	699	$243,059	$240,058	47

The prices are ridiculous. You can’t find anything under $340,000, and if you’re lucky, you might be able to move in without having to put in a couple thousand dollars,” said Basiliere, an area manger for Ricoh Corp.

The average sales price of a home in Nashua so far this year is $310,113, up 29 percent from the average price of $240,058 in 2002, according to Ambiance, the multiple-listing service database.

And New Hampshire is the ninth most expensive state in the country in which to buy a home, according to the latest figures released recently from the U.S. Census Bureau.

The median value (midpoint) for a home in New Hampshire in 2003 was $198,288, with the lower end homes at $194,811 and the higher end homes at $201,765, according to most recent Census Figures.

“It’s much worse than that,” said Brian Moses, owner of Coldwell Banker Brian Moses Realty Inc. in Nashua.

On Friday, Basiliere looked at a two-family home near the Tree Streets with a $314,900 asking price. But after seeing holes in the wall, water stains on the ceiling and old carpeting, his mind was made up.

He doesn’t mind doing some work, but he doesn’t want to have to pour thousands of dollars into a home with such a hefty price tag.

“I’m hoping I find something,” he said.

‘Frustrating’

Even in a stagnant economy, prices are sky-high, and, according to Mark Zandi, chief economist at economy.com, there’s no data that indicates there will be any cooling off of the housing market anywhere, any time soon.

In Nashua, an entry level, very basic ranch or split style starter home costs between $250,000 and $275,000, Moses said.

And since 2000, New Hampshire experienced a 41 percent increase in median housing value – one of the largest increases in the country, ranking fourth behind the District of Columbia (44 percent), California (46 percent) and Massachusetts (50 percent).

Steve Mendonca, 25, of Lowell, Mass., has been looking to buy a single-family home in the Chelmsford, Dracut and Methuen, Mass., area since January. But now, he and his fiancee are considering moving over the border to New Hampshire because it’s less expensive, he said.

“We’ve been frustrated in Massachusetts just continually looking and not finding something that was ready to move in,” said Mendonca, an illustrator.

Mendonca, whose price range is under $300,000, found plenty of older Bay State homes that need work, he said. But for the same price in the Granite State, he found newer homes in more desirable neighborhoods, he said.

“I have a feeling I might end up in Nashua,” Mendonca said. “I’m not looking forward to the drive over the border, but I might have to relocate.

“It’s been frustrating because you never seem to have enough money and you keep asking yourself, should I wait? And hopefully the market will go down, but then you know the interest rates will go up . . . So my conclusion has really been just get it over with, buy a home and just start paying for it, and if I have to foreclose, I have to foreclose.”

Frustrating is also how Bill Chisholm, 35, of Nashua, described his experience with the local housing market over the past several months.

“The initial thought you havewhen you put your house on the market is, we’re going to make money on this house,” he said. “Then you find out the next house you want to move into has risen proportionally.”

The husband and father of three put his Orlando Street home on the market in January, but it didn’t sell for a while.

“After three months of nothing . . . we got two offers in one day,” said Chisholm, an IT headhunter.

“We were literally ready to pull the house off the market and give up.”

While looking at homes in the Charlotte Avenue School district, Chisholm found that “just about every house was overpriced,” he said. “And the condition of the houses . . . the amount of money that people thought they could get for a house in really bad shape, was kind of surprising.”

The Chisholms are now renting a place in Nashua until the Hills Ferry Road home they’re buying is ready to close.

“It’s tough now,” Chisholm said of the real estate market. “It scares the hell out of me to think when my kids are adults, how they’re going to be able to afford to live here.”

Top dollar

Sellers are getting top dollar for their property, though the market for homes priced above $400,000 is starting to stabilize, said Moses.

That, added MaryBeth Gustitus, a Realtor with RE/MAX Properties North in Nashua, is an indication of a transition market.

So far this year, homes were on the market for an average of 63 days, compared with 51 days in 2003.

Homes today stay on the market 34 percent longer than they did in 2002, according to the statewide Multiple Listing Service.

“Buyers are moving at a more comfortable pace,” Gustitus said. “For the past five years, there were bidding wars, you had to act very quickly. Now, it’s more comfortable. Buyers can think about it for a day or two, because things are lasting a little longer on the market.”

But home sales are still going strong, thanks in part to a low interest rate: 5.66 percent for a 30-year fixed-rate mortgage, mortgage giant Freddie Mac reported Thursday.

It’s also partly due the age-old story of supply and demand.

“Buyers have a lot to choose from, where as in the past we were pretty lean on supply. It’s becoming a much more level playing field,” Gustitus said.

Nationally, the median home value in 2003 was roughly $140,000, up nearly 16 percent in the last three years. Meantime, the percentage of million dollar homes doubled from 0.5 percent to 1 percent.

Gustitus said her office sold a number of million-dollar-plus homes in the past 60 days.

“I just sold one myself,” said Gustitus, adding that she sold a Hollis property the first day it went on the market. “I had multiple offers.”

Beyond supply and demand

Zandi, of economy.com, says the current real estate market is driven by two things: interest rates, and that people don’t know where to invest their money, “People are more skittish on stocks, and housing has turned out to be a good investment.”

Moses agreed, and pointed out that multi-family homes are a great opportunity for investors as well as first-time buyers.

Benjamin Mercuri, a Realtor with Coldwell Banker Brian Moses Realty, said multi-family homes are more popular now than in years past, especially with the first-time buyer.

Young people, he said, would rather become landlords than buy condos where they must adhere to association rules.

A first-time buyer who may not think they qualify for a $1,000 a month mortgage can use the rental income from the other units to qualify for the loan, Moses added.

“On the first of the month, you’ve got three rental checks,” Moses said.

Zandi says the market in places such as New Hampshire has gone beyond good fundamentals of supply and demand. People are coming in, buying homes and turning a quick profit, he said.

“This investor demand is driving prices up very rapidly, and ultimately, we’ll see these markets go flat, perhaps even down, because these investors will be a large source of demand.”

But right now, real estate professionals agree that prices are not running up faster than demand is increasing.

Still, prices in Greater Nashua are still more affordable than in Massachusetts, Realtors agree.

“I have a number of buyers who are coming from Mass. What 350 ($350,000) would net them in Mass., it’s just a completely different quality of life,” Gustitus said.

Cool down?

The big question is, when will the market level off?

Moses says he doesn’t see the high prices leveling off in the next six months to a year, especially the first-time buyer market.

“Rents are on the rise. Quality apartments are in short supply.”

But for homes priced $400,000 or above, there isn’t much demand, Moses said. He expects, in that market, prices will start stabilizing or even come down.

Zandi of economy.com said the future all depends on when interest rates rise.

“That’s been the key fuel to the housing market. As long as interest rates remain low, the housing market will remain strong.”

Things likely won’t change, he said, until long-term rates start to rise.

“That is something I thought would happen long ago,” he said, “And it hasn’t.”

For Basieliere, who is still looking to sell his Hudson townhouse and buy a two-family to help pay the mortgage, it’s a matter of waiting to see what happens.

“If nothing really comes up that’s worth it, I’ll stay where I am,” he said.

“Not by choice, but I’ll have to make do.”

Karen Spiller can be reached at 594-6446 or .

COST OF LIVING IN NASHUA