Where is the rainbow at the end of all this rain!
The market is showing signs of having bottomed out during this wet Summer and we should see continued increases in activities as we enter the Fall-Winter buying season.
The good news is that lower oil prices and a slower economy make it possible for the Federal Reserve Board not to raise rates in the coming months. Low rates and lower oil prices are just the medicine we need to start climbing out of the housing slump.
For the first time in 18 months, nationally, the number of homes under contract, or "pending", rose 5.3% in June, according to the National Association of Realtors. What's more, the rise was broad-based, occurring in all four major regions of the country. This could be an indicator of a sustained rally off of a market bottom. Locally, New Hampshire's median home's have seen minor increases in prices for the last four months compared with consistent and substantial decreases in the 16 months prior. Another important number we watch is the number of properties for sale. Homes for sale have stayed steady at 12,000 properties on the market over that same 4 month period. In short, the worst is behind us.
We continue to watch distressed transactions - short sales and foreclosed properties - to monitor their effect on prices. It is clear that Sellers have had to drop their asking prices by 23-30% from the 18 month highs to see the increase in sales and compete with these distressed transactions. We continue to forecast low prices will drive sales till early 2009, when a reduction in inventory below 12,000 units and the removal of distressed properties from the market will allow for some modest price growth.
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