Mortgage Meltdown Affecting New Hampshire Real Estate Market

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The latest shoe to drop in the mortgage crisis is the bankruptcy of lender First Magnus. That left over 400 New Hampshire would-be homebuyers with no loan dollars. It also leaves 100's of properties for sale in an already bloated market. Add to that a prediction of more foreclosures into 2008, and you have even more unsold real estate. Bonnie Guevin, President of the New Hampshire Association of Realtors concedes that predictions of a rebound haven't yet proven accurate.

(Guevin) :04

“First I want to start off and say, yes the market has slowed.”

Guevin asked a room-full of realtors at a form in Portsmouth for a show of hands, and all who raised them agreed with her assessment. In fact, she pointed out that in Carroll County, sales of single family homes have dropped 24 per cent since January. In Strafford County, it's a 38 per cent decline for condominiums, while Rockingham County actually saw a 3.4 per cent gain in homes during that period. The good news, according to Guevin, is home values statewide.

(Guevin 2) :07

“The average sale price only went down 1.2 per cent, so that's pretty good.”

While she said that the average inventory of 11 months for unsold homes is too long, she's hopeful that the slowdown will stablize soon. In some ways, the real estate downturn is confounding the experts. Professional property appraiser Peter Stanhope pointed out that the available good jobs should help bolster prices.

(Stanhope) :19

“Because that's going to create in-migration, and in-migration creates buyers for housing in New Hampshire.”

John Rice, who heads the Seacoast Board of Realtors, pointed out that 111 residential properties have sold in Portsmouth since January.

(Rice): 13

“Twenty seven of those transactions were within six thousand of the asking price, and there were seven that sold for more than asking price, and eight at full price.”

But Bill Valentine is the President of an investment firm in Oregon. He's also very bearish on the real estate market there and nationally.
(Valentine) :15

“Real estate nationally is going through its biggest contraction in over 30 years. And I don't think that's being disputed by anyone at this point, and clearly there's more to go on the downside.”

Valentine even tried to sell his own home in Bend, Oregon, but missed the market peak in the real estate recession that continues.

But one New Hampshire banker said that falling prices will actually help create opportunities, ultimately. He's Jay Gibson, President of Piscataqua Savings Bank in Portsmouth.

(Gibson) :12

“There is value out there right now. There has been an increase in the inventory of properties on the market, so that's going to bring opportunity. Rates generally are still relatively low.”

Gibson says that his bank receives calls from people asking if there is any mortgage money out there.

(Gibson 2) :12

“There's definitely mortgage money available from a multitude of sources. In addition to that, I think if lending is done responsibly, it doesn't necessarily mean that things have tightened.”

Gibson says that his interpretation of tightening in the mortgage market means an end by lenders of 100 per cent financing or promoting lending to buyers who won't get any initial equity in the properties they purchase.

And Don Hatt, Chief Executive Officer of Dover based Federal Savings Bank says that in today's real estate environment, sellers must be realistic.

(Hatt) :22
“Sellers in some cases are still unrealistic in terms of what they're values are. And what we're seeing is as people are starting to price their homes at realistic values, they're seeing activity taking place. For those sellers that are still unrealistic in terms of their pricing expectations, they're going to own those homes for awhile.”

For NHPR News, this is Roger Wood.