Is The New Hampshire Real Estate Market at a Bottom?
Treasury Secretary Henry Paulson wants to give the Federal Reserve more regulatory powers to monitor the books of financial institutions, like investment bankers Bear, Stearns and Co. Inc., private equity firms and hedge funds in order to stave off shaky accounting and lending practices which put the public, financial markets and the value of the dollar at downward risk in comparison to the Euro and other worldwide currencies. Such a move, if adopted and signed into law, would make the Federal Reserve a "super regulator" and give it the authority to stave off financial bubbles and imprudent accounting practices such as we have witnessed with Enron, Bear Stearns, Arthur Andersen, Tyco and on and on. Real lives ruined. Some say that market imbalances should be corrected over time by the market itself and those that made faulty investments should not be bailed out at the further expense of the US taxpayer. But in the case of the housing bubble the underlying loans were made to buyers whom could not absorb a down slide in the market and upward adjusting rates on their mortgages. When housing is at the very root of the US economy, when millions and millions of US homeowners are facing foreclosure and home builders and suppliers are unable to sustain in their lines of business, it would seem that some intervention is needed. Hopefully the Fed itself will rise to the occasion and will appoint independent monitors of its regulatory record and expanse going forward. In the case of the Fed buying out Bear Stearns, the consensus seems to be that this was a necessary move on a systemic level so that a chain of implosions did not carry our overall economy into deep recession or worse, outright calamity.
Curiously enough, as buyers largely continue to sit on the sidelines in this downward spiraling housing market, it does occur that although revenge may be sweet from the buyers' perspective, there will come a time when the ripe fruit of easily picked equity hanging on the lower branches of opportunity may quickly disappear. Buyers are still largely sensing that the bottom may be a great deal lower still, but there is evidence to the contrary. "How's the market?" is a common refrain being asked of agents these days and the answer in NH at least should be "which market are you talking about?" Some towns are down greatly year over year in sales and other towns are up. Houses are selling at some price points and not others. The sure-fire "over 55" retirement housing sales are suffering. Price reductions work in some price ranges and not others. Are you talking about new construction or existing home sales? Is there a home sale contingency involved in order to buy? Are first time buyers involved? What credit levels are now "acceptable" on which loan products? There is no general all-encompassing answer to the question.
Toward the positive, we have Lehman Brother's stock posting recent and meaningful gains. Weren't they the ones that were supposed to go the way of Bear Stearns? The NAR (National Association of Realtors) figures for the month ending in February 2008 actually showed an increase in existing home sales for the month of February over January nationwide by 2.9% handily beating analysts' estimates which had called for 9.88 million fewer existing homes to be sold nationally than were actually sold. The Northeast has done particularly well lately in existing home sales. The stock market somewhat inexplicably went up over 380 points yesterday, maybe on the news of the Federal Reserve being given more expansive regulatory powers. Then there are suggestions by Congressman Barney Frank (Democrat - Massachusetts) that the lenders take on a certain amount of loan forgiveness in cases where the lendee has a realistic chance of making payments. Not a bailout, rather a workout. None other than Donald Trump has recently stated that the bottom is near since the bad news about the sub-prime debacle is largely if not fully out on the table. The spring market is coming and traditionally that is the best time of year for marketing and selling a home. Interest rates are still historically low. The NH-based office at Coldwell Banker Residential Brokerage in Amherst NH has shown more sales than listings on its monthly board over the last 2-3 months. The Federal Reserve chairman, Ben Bernanke, has finally uttered the "R" word- recession. I suspect in an election year that means the worst is already behind us, that we are not heading downward still. It's the politics, stupid.
So if you are a buyer in this market, especially one without a home sale contingency, then now is an excellent time to buy. Picking the exact bottom in this market is a fool's game. The signs of a turn-around are showing themselves. The inventory, while still great, is being slowly chipped away. This slow chipping away at the housing inventory accompanied by some "tough talk" by agents, backed by sellers whom are willing to be educated about market value based on actual sales and pending listings- all this will pave the way for even those buyers that do have home sale contingencies...it will become an even-keeled market again.
It is possible today, right now, to purchase properties that have been foreclosed on at bargain basement prices, however this opportunity to grab this "instant equity" won't last forever. The market is still tricky, but buyers beware...if you wait to "catch the exact bottom" you will be waiting at the curb when the bus rolls on without you. If you have a home sale contingency, please consider getting an updated Comparative Market Analysis (CMA) done on your home and further reexamine your unwillingness to lower your price. If you decide to "get real" too late, it may be exactly that, too late, not on your selling end necessarily, rather too late on your BUYING end because "bubbles" work BOTH ways-what has been overblown as a "downside bubble" will see its vacuum quickly filled when the market revives. Again, interest rates are historically low. FHA and VA guidelines for lending have been relaxed. Fannie Mae and Freddie Mac guidelines are tougher, true, but that will be considered a boost to overall market and credit confidence going forward. NOW is the time to talk to a REALTOR and find out what the market is doing...the market for YOUR particular situation.
Buddy Pope 4/42008
Helping you list and/or buy in sales and income tax free Southern, New Hampshire! Towns include among others... Nashua, Amherst, Hollis, Merrimack, Peterborough, Hancock, Temple, Milford, Bedford...
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