Sellers ‘No Longer Control The Market’ In New Hampshire
The Concord Monitor has this rare report on the housing market in New Hampshire. “Local real estate agents say the state’s market has remained flat this spring, a season in which sales generally pick up for the busy warm-weather selling season. Properties are staying on the market longer, some sellers are dropping prices, and buyers have more time and bargaining power, they say.”
“‘Buyers and sellers are now on an even keel,’ said Nancy Morrison, a longtime agent in Concord. ‘What we’re dealing with now is the shock from the sellers that they no longer control the market.’”
“When Liam Moquin moved to Pittsfield from Manchester a year ago, he was able to sell his home in two days. Now he’s moving to Maryland, where he has a new job and new home waiting for him. The only problem is, he hasn’t found a buyer yet for his place in Pittsfield, thanks to a cooling real estate market. ‘I’m a little concerned,’ Moquin said. ‘We had an open house last week on Saturday and Sunday, but nobody stopped by. I’ve already reduced the price.’”
“The boom is most likely over, local real estate agents agree, but it doesn’t mean the market is crashing. ‘The key is realistic pricing,’ said Barbara Ruedig, a Concord real estate agent. ‘It’s not the bullish seller’s market we had a few years ago.’”
“A year ago, it was difficult to find a house in Concord listed below $250,000, said real estate agent Brenda Perkins Anukem. A check of the listings now shows 45 houses for sale under $250,000, she said. In Concord, the average price of a home has decreased 1.1 percent, to $267,196.”
“Concord homeowner Lisa Brown has already found the house she wants to move into, but she is hesitant to put her house on the market right now. She is thinking of renting the house for a year instead to see if the market rebounds. The house is a small brick Tudor built in the 1930s. Because the house has some unique architectural features, Brown says she is not willing to drop the price below $299,900.”
“Mary Cowan, a real estate agent in Concord, said the market cooling is not something people should be very concerned about. ‘For some people who haven’t been in real estate that long, this softening is a little scary,’ she said. ‘Frankly, this is the way it used to be. Yes, sellers are going to have to really look at their pricing but properties are still going under agreement.’”
NIce to here something from my part of the world. But this article still has the NAR–things are solid-prices still rising–bit. Its getting slow in NH and I doubt there will be a big bounce anytime soon. Why does every article like this donate so much “positive spin” time for this industry?
The latest spin from Sarasota HThttp://heraldtribune.com/apps/pbcs.dll/article?AID=/20060612/COLUMNIST86/606120309/1007/BUSINESS
http://heraldtribune.com/apps/pbcs.dll/article?AID=/20060612/COLUMNIST86/606120309/1007/BUSINESS
The latest spin from Sarasota.
Pure print infomercial. Should have a disclaimer.
Arrrrgh. Why is it that people who move once a year insist on buying a house instead of renting? If your life is so unstable you have no business buying an anchor like a house. Liam. No pity for you.
OT but interseting articl that highlights the high debt / high interest rate zone we seem to be headed to.
http://www.safehaven.com/article-5345.htm
Good reasoning. But people are fundementally stupid. They do as other do. They will be strangled by their debts. Hey who cares at FED? They created this monster with easy credit. Payback time will be horrible. And you know what? Europe, Canada, and the rest of the West, is almost in the same situation. Monkey see monkey do. Greenspan or Bernanké are just big monkeys like the others.
“The boom is most likely over, local real estate agents agree, but it doesn’t mean the market is crashing
Then why bring it up in the conversation?
The most revealing form of denial is that which cannot resist constantly mentioning the source of anxiety…
Often true, stucco, but what the heck does that say about some of us???
The terms bubble and crash are not useful aside from general conversation. What you will see here is numerical analysis with commentary, which is entirely different. “There is no bubble.” and “There is no crash.” are repeated to assuage fears without relying on those pesky facts.
Bubblefucius say:
Hen who pretend Fox not approaching chicken coop end up with egg on face.
We are all anxious about being “priced out forever…”
“When Liam Moquin moved to Pittsfield from Manchester a year ago, he was able to sell his home in two days. Now he’s moving to Maryland, where he has a new job and new home waiting for him. The only problem is, he hasn’t found a buyer yet for his place in Pittsfield, thanks to a cooling real estate market. ‘I’m a little concerned,’ Moquin said. ‘We had an open house last week on Saturday and Sunday, but nobody stopped by. I’ve already reduced the price.’”
There is no law in economics that says once the seller has “reduced the price,” a buyer will be forthcoming in short order. Instead, it is necessary for sellers to reduce the price to a level buyers are willing and able to pay, taking into account that interest rates are higher, a slowdown is evident, and newspapers have put prospective buyers on notice of the risk that market values will drop over the next couple of years. I frankly do not know how your average Joe Sixpack seller could come up with a rational price level at which his home would sell, given the various crosswinds of change that have knocked down market prices. That is why I always recommend a Dutch auction approach to those who truly need to sell — start at a price level near the most recent comps for your area, then knock 1% off the list price each week it is on the market. In fact, I am surprised that Realtors (TM) have not caught on to the advantage of advocating this approach, given that market activity has pretty much fallen off a cliff in many formerly hot areas.
. . . start at a price level near the most recent comps for your area . . .
Key words being “most recent”. I see a lot of people using 2005 comps to base their listing price on.
This can be a big problem during a crash, as when the pace of sales drops off the cliff, there may be no close comps within six months…
I find Moquin’s situation puzzeling.
I thought everyone wanted to live in Pittsfield.
I had to look it up on a map. I thought it was Pittsfield, MA. I didn’t even know we had one but it looks like it’s in a nowhere part of the state.
Concord homeowner Lisa Brown has already found the house she wants to move into, but she is hesitant to put her house on the market right now. She is thinking of renting the house for a year instead to see if the market rebounds.
There is this pattern emerging of people wanting to take advantage of the slow market on the buy-side, yet unwilling to face the same reality on the sell-side. Consequently, they end up owning two depreciating properties instead of just one.
Exactly. I have a friend with her house on the market for 100K above reality. She saw the great “deals” out there last winter and thought she’d sell high and buy low.
And, of course, the problem with the renting-for-a-year-until-the-market-rebounds solution is that the home debtor will still see red because they won’t be able to obtain the amount they need in rent to stay above water. They are screwed either way.
BayQT~
Yes, in military speak it’s “fighting the last war”, with both of the major drivers of fear and greed involved.
Fear: People are afraid of getting burned by selling and then watching prices head out of their reach in their target market, which has been happening for the last few years.
Greed: People expect price appreciation to hand them an arbitrage profit if they own 2 homes for a period. thAlternatively, they see
$300K for a small brick house? It’s not like Concord is an urban city which lacks surrounding land. And if you move there, be prepared for some seriously cold weather.
WCI Communities Announces Second Quarter Order Trends and Recent Share Repurchase Activity quotes:
The company is continuing to experience order activity well below year-ago levels
For the first two months of the 2006 second quarter, combined homebuilding orders declined almost 50% over the same period a year ago. Traditional Homebuilding orders were down 42% vs. year-ago levels while Tower Homebuilding orders dropped 84%. The company now believes orders for the full year 2006 will likely fall at least 20% below 2005 order levels
First two months down 50% - rest of year down only 20%??? They sure are optomistic!
The company now believes orders for the full year 2006 will likely fall at least 20% below 2005 order levels, in part due to the company’s expectation of releasing to market only three to five towers during the year compared to its prior expectation of 11 to 13.
Don’t forget to carry those towers booked at full 2005 valuations!
(Why is it that people who move once a year insist on buying a house instead of renting? If your life is so unstable you have no business buying an anchor like a house. )
That’s an important point. I’ve written that (aside from bubbles with insane prices) homeownership is great for people who want to live in a community in the long run. By locking in location and housing costs, it provides a sense of stability and committment.
But why are people who know they will not be staying, and young people whose life may be changing, buying houses? It makes no sense. We bought a house after the 1980s bubble deflated, we had kids, and we were sure we wanted to stay in a particular place. We’ll be there for 25 years, if not 50+. The 25 year scenario has us downsizing to a condo, where we would be for 25+.
Brooklyn is very different from much of the country in that regard. Transaction costs are high, with a mortgage recording tax for the buyer and a big transfer tax for the seller, plus the realtor does nothing for their six percent here — all the lawyers and contracts cost extra. Deals take a long time. While in much of the country only housing in “move-in” condition sells, where most housing is sold “as-is,” and the housing units are old. Most people prefer it that way — better to pay less up front and rehab (or restore) a unit they way they want it.
Bottom line — buying a place is a big committment here. There are far fewer flippers and investors. But prices are still too high.
Unfortunately, young people just starting out only know a housing market that is highly liquid, and have seen nothing but increasing prices. They think this is how things always will be, and base their decisions accordingly.
When I first got out of school/started investing, the tech bubble was happening. That crazy market was all I knew, and I didn’t yet have the life experience to realize that it wouldn’t last. I think the dynamic here is the same. I lost money back then, but I learned something about the necessity of paying attention and studying history/trends, rather than assuming that what you see happening at any particular point in time reflects a constant, lasting condition.
Well said, a whole generation knows nothing of finance/housing but Greenspan’s bubble. It’s going to be a rude awakening.
The Australian stock market has lost $120 billion in market cap in the last five weeks. I don’t have the stat for the US markets but I’d imagine they’re just as impressive. That’s a lot of money to just vanish.
It is the same here in Queens. What I think you underestimate is that there are far more speculators than it seems. Especially when it comes to multifamily homes. (which there are many).
Also easy lending has put a lot of people, who shouldn’t have been given a mortgage, into a house.
I do not think NY is immune from the crash.
OT: WCI Communities just warned, stock is tanking
http://biz.yahoo.com/bw/060612/20060612005697.html?.v=1
Now I know why the stock has held up recently (last couple weeks) in the face of all the HB problems. They were buying back shares prior to the announcement to give it some room to drop.
Yikes! Cramer is bullish on WCI. The Kiss of Death IMHO after the groupie bounce.
Cramer = lost $$$. IMO!
TxChick57 - I always enjoy your posts. Santa Fe is really nice. I am actually in Albuquerque, which of course is a much larger area, and the prices here are about half of what SF is. SF is an artsy community, and tourist place, plus state gov’t since it is the capital. You may email me at ambell1@iwon.com and would be happy to tell you anymore I know about New MX and SF/ABQ.
new mexico is really nice i deer hunt with a retired air force colonel he has a nice place in albuquerque
Santa Fe is a beautiful place, but very overpriced, IMO. My sister moved there last year and she rents. There are few well paying jobs in the area and it’s a bit of a tourist trap. The biggest problem with SFE and ABQ is the lack of water. I would consider living in the state if it wasn’t for that issue. Most of the state is in a level 3 drought, and it is only supposed to get worse over the next few years.
I live in NH and market has more than softened. I know some friends that are looking to buy. But everybody is aware of the softening market and therefore nobody is willing to pay anywhere close to 2005 or 2004 levels. It’s going to get tougher for the sellers if their house doesnt sell this summer. I think if you want to sell your house in the next 2 years, this summer is the best time for you. And you gotta price it below everybody else. I think the best way is to think “What would you pay for your own house if you were buying it today?”
“But everybody is aware of the softening market…” This is good stuff, Al. It is the reverse of popular perception/psycology that will be necessary to bring this thing down. Looks like that process is underway in NH.
Too bad this “rare report” on NH got hijacked by a thread of comments on Albequerque and Sarasota. Oh well.
NH is beautiful and a low tax state. I think longterm it will do fine. It’s still so much more affordable than Boston.
I have a coworker going through this and he
knows about it best being the first to drop your prices before the crowd. Put his house on Craigslist a month ago and not one nibble.
Keith, read this:
http://tinyurl.com/ohuad
I meant to say “Ben.”
Sorry OT - but hillarious.
http://slo.craigslist.org/rfs/159752546.html
Life is short, don’t waste it analyzing.
Call me for to help you acquire some real estate.
Life is short, don’t waste it proofreading.
“Now he’s moving to Maryland, where he has a new job and new home waiting for him. The only problem is, he hasn’t found a buyer yet for his place in Pittsfield, thanks to a cooling real estate market.”
This is exactly why I say renters are in the catbird seat. Freedom to go with the job market until you find a place that you want to stay. I like where I am at but I won’t buy at these prices and for things to get real again I feel that I will be some 5 years down the road. I’m willing to job transfer and then come back to retire in 5 years. In the meanwhile renting is just fine with me.
Lisa “Because the house has some unique architectural features, Brown says she is not willing to drop the price below $299,900.”
Well Lisa, you just hold on tight and rent it. Then watch as prices fall further and your renters trash the place or you finally can’t get any renters at all. Lisa, you are an example of someone tooooooo emotionally attached to the property. And just who was it that told you that your house had “unique architectural features”, I bet it was the RE agent that sold it to you in the first place.
FSBO: Unique Architectural Features, plus house.
Yeah I have some fiends who bought a farm with “unique architectural features” that are going to cost 20k to repair.
And just who was it that told you that your house had “unique architectural features”, I bet it was the RE agent that sold it to you in the first place.
Judging by what I’ve seen on HGTV and realtor.com, the vast majority of realtors know jack squat about architecture.
OT for this thread but on RE.
“Look out below”
http://www.financialsense.com/editorials/rubino/2006/0609.html
Thanks for the excellent link, I think this guy has the next 4 years in a nutshell. Good graph on housing oversupply of 35%.
THE NEXT FEW YEARS
Phase V: - The Future: Look Out Below. The problem becomes obvious and virulent when real estate values begin to fall. With debt service costs rising, real estate begins to flounder, and more risky real estate ends up on the rocks. As default rates rise, mortgages slowly become more expensive and difficult to obtain (“real estate becomes a four letter word” in the parlance of an old banker). Only brave and knowledgeable entrepreneurs venture onto the scene of real estate wreckage at the lowest tide. Only a “foolhardy lender” would venture between the rocks of the now quiet ebb tide.
The “virtuous cycle” has completed its turn into the “vicious cycle.”
—————————————————————————-
What worries me is that our government economic leaders realize all of this — they just won’t admit it. But they may adopt policies which reward imprudence, if that is what they perceive is necessary to avoid another great depression. The leading candidate: Some kind of taxpayer funded bailout of FBs…
2 leave CA: are property taxes the same for SF as Alb or are they higher in SF?
I have done a lot of reasearch on property taxes and you have to call the county recorders office in each county to see what taxes are going to be on similar properties. The best states in the west are Colorado,Wyoming and Nevada. However high property values erode your net income.
OT,
Buyers and sellers alike are finding that the real estate boom of the past five years is fizzling. There are now about 28,000 pre-existing homes on the market in Tampa Bay, nearly four times as many as in spring 2005.
http://www.tbo.com/news/money/MGBHQ7EPAOE.html
Was at a going away party yesterday for a guy who’s moving to Florida later this month. He has a wife and two little girls. The wife is in the military and cannot move to Florida for another 2 years. The girls will be moving with their father (so the oldest can get into kindergarten in the fall). The couple seemed sad yesterday - understandably so. They will be living apart for 2 years - and the mother will be living apart from her children for all that time. I feel badly for them and I asked the husband, “Why did you decide to buy now? Why wouldn’t you wait until you could both move?” His reply? The classic kool-aid response, “Because prices just keep going up and if we didn’t buy now, we’d never be able to.” I told him (very nicely - because I do feel bad for his situation) that I disagree, but I wish he and his family the best. (Long-distance relationships of any kind are very hard. 2 years without your spouse or your children - except on weekends if/when airfare can be afforded - is a very big hurdle to jump. And all for what? A stupid house. How anyone can choose real estate over family is so far beyond me.)
I agree it is sad to see people making major lifestyle and family sacrifices out of fear and misconception.
Wait till they feel the added stress of realizing they were wrong. Nothing is more galling than making an unecessary sacrifice.
Stupid is as stupid does. I got no pity.
Houses have become an absolute fetish, fed by HGTV, “investment” promoters etc.
A classic fool. No father or husband worthy of the name is going to put buying a house above his family, especially when he’s got young kids. This guy is a disgrace.
“Lawrence Yun, an economist with the National Association of Realtors, predicts that prices in Florida will continue to appreciate, just at a much slower pace.”
How many times can these fools become bigger ones?
Wonder if this clown is a relative of the Mr. Yoon who was wailing about being “ripped off” because his condo developer is now selling units in his building for $100K less than what he forked over.
Since the NAR predicted a upswing in the market in 2007 ,(based on wishful thinking ) , some sellers are holding on and not coming down in price thinking they will be saved next year .
The NAR and realtor salespeople in the news have screwed the public with these predictions .
Than you have the T’V’ ads pushing the concept that one should trust the Realtors ,implying realtors are CPA’s or tax experts in real estate .
I’m not down on good realtors ,but come on ,this real estate boom has just been based on alot of false concepts like “real estate always goes up ” . Now the realtors want the sellers to reduce prices as if everything they said for the last two years doesn’t count .
I think the sellers are really confused right now . That’s why the correction is going to take time .
I agree Mr. Wizard.
I believe that in the near future the residential Realtor profession will look a lot different than it does today. The weight of their ‘expert’ comments in the media will be greatly diminished and viewed as what they are; a subjective statement to motivate people to buy houses. And while I find their comments unilaterally ridiculous, I’m not disparaging them for saying it in the context of a salesperson, but the attention they have enjoyed as go to sources for market trends and conditions for entry will be gone.
As salespeople, they will say what they will to increase sales. The problem has been that for some reason, the media has determined that they are a professional source to tap for unbiased commentary on market conditions. And other than laziness, I have no idea why. It seems so anti Journalism 101 to me.
Yep, apparently during the build up to the 1929 crash they had a lot of rah rah Journalism also .
The problem has been that for some reason, the media has determined that they are a professional source to tap for unbiased commentary on market conditions.
You are a reporter. You own a house. Who are you going to ask where to get information about housing? Your realtor. Who are they going to direct you to? The NAR. And what does the NAR do? Pay for biased studies to hand reporters.
SalinasRon - I know that the prop tax on my home is $2070 per yr, and the purchase price was $299K. Much more reasonable than CA. I haven’t looked at any specific properties or rates for Santa Fe. Albuquerque is in Bernalillo county (largest in population). Santa Fe is in Santa Fe county. I know that New Mexico was claiming to have one of the lowest property tax rates of any state. Home prices is Santa Fe are at least 50% higher in Santa Fe than ABQ, due to its being a artsy place, as well as tourism/capital. Even gas was about $.20 per gal higher there. It is about 55 miles north of ABQ and a very easy freeway drive on I-25.
I live in NH (for another week anyway) and there is an insane amount of inventory in the higher price brackets in my town. Not so much at the lower & low-middle end of the market. Eventually the sheer number of $400 -$500 K houses has got to crush the prices of the low end too. I’m thankful we listened when our selling agent told us to get our house on the market as early as possible in the spring.
Though, I do wonder why so many people are selling and where they are going. This isn’t a place that has much speculative activity.
Zm-I’m wondering what area of the state you are in, and where you’re heading to. My apologies if you’ve posted this earlier. I’ve been less able to keep up with end of schoolyear schedule.
“Now he’s moving to Maryland, where he has a new job and new home waiting for him. The only problem is, he hasn’t found a buyer yet for his place in Pittsfield, thanks to a cooling real estate market”.
Unless money means nothing to you, buying without first selling is one of the best ways to put yourself into a high stress risky situation. If you do it the other way around, and the market drops, you make out. I wonder if Liam got assurances from the agents on bothe ends that this was not a risky approach.
Wes Chester- I have 2 friends that are pretty intelligent w/masters and doctorate degrees in the medical fields….in other words, not coming from a position of ignorance. They are still trying to recover the $60,000 they had to put on their credit cards when they purchased here before selling their home in the previous state. That was 7 years ago when the housing market was much rosier.
“Mary Cowan, a real estate agent in Concord, said the market cooling is not something people should be very concerned about. ‘For some people who haven’t been in real estate that long, this softening is a little scary,’ she said. ‘Frankly, this is the way it used to be. Yes, sellers are going to have to really look at their pricing but properties are still going under agreement.’”
I’ll be so happy when realtors like this one are living in their cars.
they won’t have enough money for a car even.