Nashua NH Top Ten in Home Appreciation

By JEANNE MORRIS
Sunday News Staff

NEW HAMPSHIRE’S home prices are continuing to climb, according to a first quarter study of 2004 by the federal government. Although few experts expect homes will keep appreciating at warp speed in the state, none foresees a dramatic decline.

The fast rate of appreciation did show signs of slowing through the first quarter of 2004, according to the Office of Federal Housing Enterprise Oversight’s (OFHEO) covering more than 220 metropolitan markets. But, it’s still going at a good clip. The OFHEO found the average national appreciation rate for homes is 7.7 percent.

Of the 220 metropolitan statistical areas sampled, the Portsmouth-Rochester market in the state’s Seacoast area were the hottest areas, ranking 66th with property values increasing the first quarter by 0.71 percent. Manchester ranked 67th with a 0.37 percent increase, and Boston ranked 75th with a 1.02 percent increase.

Signs on Shilah Lane, off Kendall Pond Road in Derry, recently advertised Applewood Village’s new adult community. The 15-lot, 55-and-over adult community offers a maintenance-free lifestyle — a feature that many home buyers are seeking and builders are eager to offer.

Manchester REALTOR® and appraiser Robert P. Mongan said real estate sales data from January to May shows that the average selling price of a single family home in Manchester is $223,000. It’s on the market 53 days and brings 98.5 percent of the asking price. In Bedford, the average price of a single-family home is $425,000. It’s on the market 113 days and brings 95 percent of the asking price.

The Center for Economic and Policy Research, said the run-up in home prices in New Hampshire since the mid 1990s saw the average price of a home has climbed 68 percent since 1995, to about $200,000. Massachusetts saw a bigger jump — its home prices climbed by almost 74 percent. Nationally, home prices have outpaced the overall rate of inflation by 40 percent, and in New England, by 70 percent.

Even so, economists and developers in New Hampshire see little on the horizon to indicate the prices will be dropping anytime soon. They say builders and banks, which were burned when the housing market went bust in the late 1990s, are being cautious about not building beyond the immediate demand.

In addition, more people keep moving into the state, increasing the demand for homes. Statewide, the population increased 1.04 percent, according to the U.S. Census Bureau estimates released in June. As of 2000, a total of 1.2 million people were living in New Hampshire.

No one can say when the real estate market will start on its traditional downward cycle, although experts agree it’s bound to happen at some point.

In its report, the OFHEO cautioned: “As housing markets typically perform well in periods of economic growth, the current market characteristics do not suggest comparable declines to those we observed in previous downturns. On the other hand, housing prices cannot appreciate at rates substantially greater than those of general inflation indefinitely.”

Home price appreciation by state found eastern states with the most strength. Rhode Island was at the top with a 12.08 percent home price appreciation for the year ended March 31, 2002, followed by the District of Columbia, 11.65 percent; Massachusetts, 10.06 percent; New Hampshire, 9.85 percent; New Jersey, 9.36 percent; Minnesota, 8.96 percent; Maine, 8.61 percent.

New England house prices rose 9.6 percent since the first quarter of 2001 and 322.4 percent since 1980. In New Hampshire, homes increased 307.20 percent since 1980. That means the price of a home has tripled in two and a half decades.

Economist Russell Thibeault of Applied Economic Research reported this spring that he has seen signs that builders have begun to ramp up into high gear.

“This spring there were a phenomenal amount of developments proposed. We haven’t been this busy since 1989,” he said. That could be a signal that builders are starting to overbuild, Thibeault said. Also, he noted that interest rates have begun to increase. Mortgage bankers expect a 7 percent fixed interest rate by the end of this year. They dipped to as low as 5 percent for a 30-year mortgage this year.

“If interest rates rise significantly and quickly, I think you could see some softening of prices,” Thibeault said.

Rates on 30-year and 15-year mortgages are up considerably when compared to the same period last year. Freddie Mac, in its weekly nationwide survey, reported in late June 24 that rates on benchmark 30-year fixed-rate mortgages were 6.25 percent. A year ago, rates were lower, averaging 5.24 percent. Thirty-year mortgage rates hit a low this year of 5.38 percent the week ending March 18. Since then, they have slowly moved upward. Rates for 15-year, fixed-rate mortgages were 5.64 percent, up from the average rate of 4.63 percent registered a year ago.

Economist Dennis Delay doesn’t foresee a downturn anytime soon.

“Not right now. If you look at the increase of households, the population growth, compared to total building for all types of housing, we’re still just barely keeping up with the rate of increase of the population,” he said. Delay added, “There’s no evidence of a housing bubble out there, despite the fact prices have been pretty high.”

OFHEO’s quarterly HPI tracks average house price changes in repeat sales or refinancings on the same single-family properties. The index is based on Fannie Mae and Freddie Mac data — more than 15 million repeat transactions over the past 27 years.

The Barnstable-Yarmouth, Mass., Metropolitan Statistical Area (MSA) was ranked No. 1 with a 13.45 percent home price appreciation in the year ended March 31, 2002.

Nashua was among the Top 10 in home price appreciation. The top ten were Santa Barbara-Santa Maria-Lompoc, Cailf., 12.50 percent; Brockton, Mass., 12.41 percent; Nashua, N.H., 12.27 percent; Fort Lauderdale, Fla., 11.96 percent; Modesto, Calif., 11.87 percent; San Luis Obispo-Atascadero-Paso Robles, Calif., 11.83 percent; Providence-Fall River-Warwick, R.I.-Mass., 11.81 percent; Miami, Fla., 11.42 percent; Nassau-Suffolk, N.Y., 11.37 percent. June 30, 2004
By DENIS PAISTE


	By JEANNE MORRIS Sunday News Staff NEW HAMPSHIRE’S home prices are continuing to climb, according to a first quarter study of 2004 by the federal government. Although few experts expect homes will keep appreciating at warp speed in the state, none foresees a dramatic decline. The fast rate of appreciation did show signs of slowing through the first quarter of 2004, according to the Office of Federal Housing Enterprise Oversight’s (OFHEO) covering more than 220 metropolitan markets. But, it’s still going at a good clip. The OFHEO found the average national appreciation rate for homes is 7.7 percent. Of the 220 metropolitan statistical areas sampled, the Portsmouth-Rochester market in the state’s Seacoast area were the hottest areas, ranking 66th with property values increasing the first quarter by 0.71 percent. Manchester ranked 67th with a 0.37 percent increase, and Boston ranked 75th with a 1.02 percent increase. Signs on Shilah Lane, off Kendall Pond Road in Derry, recently advertised Applewood Village’s new adult community. The 15-lot, 55-and-over adult community offers a maintenance-free lifestyle — a feature that many home buyers are seeking and builders are eager to offer. Manchester REALTOR® and appraiser Robert P. Mongan said real estate sales data from January to May shows that the average selling price of a single family home in Manchester is $223,000. It’s on the market 53 days and brings 98.5 percent of the asking price. In Bedford, the average price of a single-family home is $425,000. It’s on the market 113 days and brings 95 percent of the asking price. The Center for Economic and Policy Research, said the run-up in home prices in New Hampshire since the mid 1990s saw the average price of a home has climbed 68 percent since 1995, to about $200,000. Massachusetts saw a bigger jump — its home prices climbed by almost 74 percent. Nationally, home prices have outpaced the overall rate of inflation by 40 percent, and in New England, by 70 percent. Even so, economists and developers in New Hampshire see little on the horizon to indicate the prices will be dropping anytime soon. They say builders and banks, which were burned when the housing market went bust in the late 1990s, are being cautious about not building beyond the immediate demand. In addition, more people keep moving into the state, increasing the demand for homes. Statewide, the population increased 1.04 percent, according to the U.S. Census Bureau estimates released in June. As of 2000, a total of 1.2 million people were living in New Hampshire. No one can say when the real estate market will start on its traditional downward cycle, although experts agree it’s bound to happen at some point. In its report, the OFHEO cautioned: “As housing markets typically perform well in periods of economic growth, the current market characteristics do not suggest comparable declines to those we observed in previous downturns. On the other hand, housing prices cannot appreciate at rates substantially greater than those of general inflation indefinitely.” Home price appreciation by state found eastern states with the most strength. Rhode Island was at the top with a 12.08 percent home price appreciation for the year ended March 31, 2002, followed by the District of Columbia, 11.65 percent; Massachusetts, 10.06 percent; New Hampshire, 9.85 percent; New Jersey, 9.36 percent; Minnesota, 8.96 percent; Maine, 8.61 percent. New England house prices rose 9.6 percent since the first quarter of 2001 and 322.4 percent since 1980. In New Hampshire, homes increased 307.20 percent since 1980. That means the price of a home has tripled in two and a half decades. Economist Russell Thibeault of Applied Economic Research reported this spring that he has seen signs that builders have begun to ramp up into high gear. “This spring there were a phenomenal amount of developments proposed. We haven’t been this busy since 1989,” he said. That could be a signal that builders are starting to overbuild, Thibeault said. Also, he noted that interest rates have begun to increase. Mortgage bankers expect a 7 percent fixed interest rate by the end of this year. They dipped to as low as 5 percent for a 30-year mortgage this year. “If interest rates rise significantly and quickly, I think you could see some softening of prices,” Thibeault said. Rates on 30-year and 15-year mortgages are up considerably when compared to the same period last year. Freddie Mac, in its weekly nationwide survey, reported in late June 24 that rates on benchmark 30-year fixed-rate mortgages were 6.25 percent. A year ago, rates were lower, averaging 5.24 percent. Thirty-year mortgage rates hit a low this year of 5.38 percent the week ending March 18. Since then, they have slowly moved upward. Rates for 15-year, fixed-rate mortgages were 5.64 percent, up from the average rate of 4.63 percent registered a year ago. Economist Dennis Delay doesn’t foresee a downturn anytime soon. “Not right now. If you look at the increase of households, the population growth, compared to total building for all types of housing, we’re still just barely keeping up with the rate of increase of the population,” he said. Delay added, “There’s no evidence of a housing bubble out there, despite the fact prices have been pretty high.” OFHEO’s quarterly HPI tracks average house price changes in repeat sales or refinancings on the same single-family properties. The index is based on Fannie Mae and Freddie Mac data — more than 15 million repeat transactions over the past 27 years. The Barnstable-Yarmouth, Mass., Metropolitan Statistical Area (MSA) was ranked No. 1 with a 13.45 percent home price appreciation in the year ended March 31, 2002. Nashua was among the Top 10 in home price appreciation. The top ten were Santa Barbara-Santa Maria-Lompoc, Cailf., 12.50 percent; Brockton, Mass., 12.41 percent; Nashua, N.H., 12.27 percent; Fort Lauderdale, Fla., 11.96 percent; Modesto, Calif., 11.87 percent; San Luis Obispo-Atascadero-Paso Robles, Calif., 11.83 percent; Providence-Fall River-Warwick, R.I.-Mass., 11.81 percent; Miami, Fla., 11.42 percent; Nassau-Suffolk, N.Y., 11.37 percent. June 30, 2004 By DENIS PAISTE Copyright 2004 - Union Leader