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Stagnant Pay Slowing Area House Sales

Valley News Business Writer
Published: 5/21/2016 11:40:27 PM
Modified: 5/21/2016 11:43:28 PM

The job market has been steady. Interest rates remain historically low. Some economists are wary about where the economy is heading, yet forecasts continue to predict modest growth.

It would appear to be a good — or at least not the wrong — time to buy a home.

So how come Upper Valley home sales are in the doldrums?

That’s the reality facing home sellers as they gear up for the summer home selling season, according to the biannual report sponsored by the Upper Valley Housing Coalition on area trends in the real estate market.

Despite a relatively stable economy and low regional unemployment, home sale prices in the Upper Valley have been falling along with the number of homes listed for sale.

The reason might be due to an issue that has been getting attention in this election year from both ends of the political spectrum: stagnating wages of the middle class, according to Ned Redpath, owner of real estate agency Coldwell Banker Redpath & Co. in Hanover.

“Incomes are not going up that much and people are unable to salt enough money away for a down payment,” Redpath said, leading sellers to lower house prices to meet what buyers are willing to pay. “Everybody says the economy is strong, but it’s nowhere near as strong as they say it is.”

The market analysis that Redpath and Bruce McLaughry, chief operating officer of Four Seasons Sotheby’s International Realty in West Lebanon, prepare twice a year shows that house sale listings in the Upper Valley fell 7 percent to during the first quarter and that the average sales price for a house under $300,000 was down 4 percent to $171,000.

The average sale price for homes priced between $300,000 to $600,000 was down 2 percent to $400,000.

A single quarter of data, especially for the slow sale winter months, generally would not say much about the overall state of the market or the economy.

But the first-quarter results follow similar trends from last summer — normally the busiest home selling time of the year — when listing inventory fell 4.6 percent below year-prior levels in the Upper Valley and the average price for a home under $300,000 fell 3.4 percent to $179,000.

One bright spot of last summer: The average price for houses priced between $300,000 to $600,000 rose 5.5. percent to $432,000. However, sales of homes in the Upper Valley priced below $300,000 outnumbered by 6 to 1 sales of homes priced between $300,000 to $600,000.

“This is the first year that (Bruce) and I feel the sellers are far more putting realistic asking prices on properties,” Redpath said.

“But what’s happening is, if a house is listed fairly and if the seller has (fixed) up the property so the place shines, then it’s selling instantly.”

Indeed, although the number of house sales were both down in the first quarter, so was the number of days a house was on the market — down 6 percent to an average of 149 days.

Last summer, a home listed for an average of 129 days before selling, or 1.5 percent fewer days than the prior summer.

Redpath’s and McLaughry’s analysis, which is drawn from data supplied by the Northern New England Real Estate Network, a consortium of New Hampshire and Vermont Realtor boards, however, differs from data tabulated by the respective states Realtor trade groups.

The New Hampshire Realtors group reports that the number of closed home sales in Grafton County fell 21.4 percent in the first quarter while the median sales price declined 0.4 percent below prior-year levels to $131,000.

The Vermont Realtors group reported the number of closed home sales in Windsor County through April increased 6.7 percent and the average price rose 5.4 percent to $289,000 compared to the year-earlier period.

Differences in the utilized data points — encompassing geography, median versus average price and time frame — between the various reports, however, likely account for the variance in market analysis.

Nonetheless, sluggish Upper Valley home sales may be masking other positive news in the real estate market, according to Sherry Noyes, a mortgage loan officer with Mascoma Savings Bank in West Lebanon.

“What we’re seeing is a lot of construction loans, from Lake Sunapee to the Upper Valley, which we haven’t seen since 2008,” Noyes said. “We started seeing a spike last year and have seen even a greater one this year. At this point we are busier than we were at this time last year.”

Noyes said she thinks the increase in people seeking loans to build homes is due in part to the lower number of homes on the market, in addition to attractively low interest rates for loans.

“When people are out shopping for a home to purchase and there isn’t a lot of inventory to chose from, that’s usually when they start considering to build a home,” she said.

Redpath said first-quarter home sales are usually an indicator of how sales will play out during the following summer.

The weak first-quarter sales, he said, may be the result of strong sales in the fourth quarter of last year.

“A lot of inventory was decreased because we sold everything in the fall, so there was little to carry forward.” he said.

John Lippman can be reached at jlippman@vnews.com or 603-727-3219.




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