October 2009 Presentation To Gov Council

October 2009Coos County Real Estate

Market Review

Current Real Estate Conditions in Coos County

Presented by Andy Smith, CCIM

National Market

Sales of new single-family homes in August 2009 were at a seasonally adjusted annual rate of 429,000, according to estimates released by the U.S. Census Bureau and HUD.

The median sales price of new houses sold in August 2009 was $195,200; the average sales price was $256,800. This represents a supply of 7.3 months at the current sales rate.

According to the National Association of Realtors, pending home sales have increased for 7 straight months. However, not all pending contracts are turning into sales due to closings not coming together because of long delays with short sales and new appraisal rules. However, 1st Time Home Buyers are moving fast to beat the Nov 30th deadline to purchase.

National Sales

Real Estate industry expert Steve Harney clearly illustrates how the market rebound has been heavily weighted to the lower price segments as First Time Home Buyers and investors are scooping up great values. As the mid and upper level Buyers gain more confidence over the next 6 months, and recognize the values that are being offered, this market segment will also turn, and turn quickly.

$0-100,000 sales up 38.8%$100,000 – 250,000 sales up 8.7%

$250,000 -5 00,000 sales down 6.2%$500,000 – 750,000 sales down 8.9%

$750,000 – 1,000,000 sales down 10.6%$1,000,000 – 2,000,000 sales down 23.3%

$2,000,000+ sales down 32.4%.

The NH Real Estate Market

According to the New Hampshire Association of Realtors, statewide home sales have increased over the previous year for three consecutive months.

Sales data released recently by NHAR showed that the number of residential unit sales in August 2009 was up 4 percent over August 2008 sales – from 1,104 in 2008 to 1,169 in 2009.

The report comes following a June residential sales increase of 1 percent and another 6 percent increase in July – the first time there have been three consecutive monthly increases since July 2004.

The NH Real Estate Market Continued

Foreclosed homes

Foreclosures in NH: – 2006: 3,688– 2007: 5,522– 2008: 8,273

Source: Foreclosuresnh.com

•According to Real Data, a total of 578 properties of all types were sold in Coos County so far in 2009, of those 75 have been foreclosure sales. 13% of the sales. This corresponds to a statewide total of 13.2% in 2008.

Coos County Real Estate MarketAll stats are Year to Date

680 New Residential Listings have come on the market in Coos County

277 have sold 42 are contingent Listing Price Average: $103,171 Average sold price YTD is $91,706 Average Days on Market: 188

Coos County Real Estate Market

As you can see, the sold prices hit highs in 2007 and early 2008, with the average sale price hitting a high of $181,705 in February 2008. One year later, in Feb 2009 it hit its lowest point at $62,027


June 2005 was the lowest amount of days on market at 79. Currently we are looking at an average of 210, with the high in 2009 at 329 days.


In July 2005, 60 units were sold. This was the peak, in terms of units sold. Then in January 2008, only 13 units were sold. So far in 2009, August was the high month for sales with 49 properties sold.

Absorption Rates

• When Looking at homes that are for sale, we also look at the absorption rate. The absorption rate tells a property owner how long they realistically have to wait until their home sells. The current inventory is calculated, solds for the last 6 months are considered and a sales per month is calculated. We then calculate how many months of inventory are on the market, to determine how long it will take for the market to absorb these properties. A healthy market is when there is 3-6 months of inventory.

• Here are some of the current absorption rates:

Coos County Real Estate MarketLooking at Specific Towns

Lancaster:Average Selling Price, YTD: $96,507Days on Market, YTD: 216Homes Sold, YTD: 37

Absorption Rates:Homes in the 0-$50,000 price range: 2 months$51,000-$100,000 price range: 1 month$101,000-$200,000 price range: 13 months$201,000-$300,000 price range: 33 months$301,000-$500,000 price range: 37 months

Challenges in the Market

Groveton:Average Selling Price, YTD: $50,047Days on Market, YTD: 146Homes Sold, YTD: 22

Absorption Rates:Homes in the 0-$50,000 price range: 9 months$51,000-$100,000 price range: 15 months$101,000-$200,000 price range: 24 months$201,000-$300,000 price range: not applicable$301,000-$500,000 price range: not applicable

Coos County Real Estate MarketLooking at Specific Towns

Berlin:Average Selling Price, YTD: $56,119Days on Market, YTD: 172Homes Sold, YTD: 78

Absorption Rates:Homes in the 0-$50,000 price range: 2.5 months$51,000-$100,000 price range: 8 months$101,000-$200,000 price range: 46 months$201,000-$300,000 price range: 11 on the market, none have sold in last 6 months$301,000-$500,000 price range: not applicable

Absorption Rates

Gorham:Average Selling Price, YTD: $80,855

Days on Market, YTD: 179Homes Sold, YTD: 11

Absorption Rates:Homes in the 0-$50,000 price range: 18 months$51,000-$100,000 price range: 12 months$101,000-$200,000 price range: 118 months$201,000-$300,000 price range: 10 on the market, none have sold in last 6 months$301,000-$500,000 price range: 7 on the market, none have sold in last 6 months.

Conclusions

While the rest of the country is starting to head to recovery, Coos County was later getting hit by the real estate downturn, and therefore will come out of this later than everyone else.

While other areas of the country are getting through their inventory of foreclosed homes, we expect to see more foreclosures through 2009 and 2010.

Although this doesn’t represent a huge portion of the market, it does have a negative impact on the average sales price and becomes part of the downward cycle.

Conclusions

• Unit Sales have risen from their low, but are now leveling off. The average sale price is still hovering in the low end and has just started to rise above the $100,000 mark.

• Certainly for homes priced up to $50,000, the inventory is low and buyers are plenty.

• Homes priced from $100,000 to $200,000 are certainly in an over supply situation. The market will take longer before these are absorbed by buyers. This is especially true for Berlin, Gorham and Groveton where unemployment is high.


New Appraisal Rules and Regulations making it harder for an appraiser to accurately appraise a property

National Banks who wait until the last minute before closing and then require more in down payments from the buyers – this recently happened to one of our buyers with a credit score of 600+.

Short Sales that fall through because the buyer “walked” after waiting too long for the bank to respond.

R.E.O. property held by national banks and investment groups are not easy to sell, as buyers are asked to waive all their rights. The banks ignore State and Federal laws and put buyers and agents in a very difficult position.

Lastly, as we say, “foreclosures are not for the faint of heart”


• With these lower priced homes (under $100,000) comes higher maintenance. Lower priced homes typically show significant differed maintenance and other challenges like lead paint, poor insulation and other maintenance issues. These can prove to be a challenge for a 1st Time Home Buyer and a younger generation of buyers whose income levels can’t accommodate the additional expenses.

• Jobs are the key. Without solid steady employment, no “workout program” can possibly help.

The Good News?

With low interest rates, and housing becoming more affordable, those who choose to live and have work in Coos County have a great opportunity to buy a home.

Questions & Comments

October 2009 Presentation To Gov Council

Documents

Transcript of October 2009 Presentation To Gov Council