The 2013 Spring in NH myth of dwindling inventory
Here is a good example of the disconnect between the national story and the local story.
All sounding good finally for sellers! YAY. NOT!
For 2 months now we have been hearing, even locally from many local area Real Estate companies about the lack of inventory in these local markets. Blow the trumpet loud enough and they will come. Many of you may recall my earlier post that forecast the improving real estate market here in Southern, NH:
Yes it is improving, but lets face a few facts:
RE-assessing the Southern NH Real Estate comeback
01) What took 6 years down will not come back in a single spring market. While the initial euphoria that the Real estate MArket is back is a nice thought and while it is improving, locally here in the Southern NH market, it is not as rosy as the national story above would have you think. That story applies to some markets and even SOME local markets (towns), but certainly does not reflect accurately a broad brush stroke of the entire Southern NH Real Estate market. Sales are happening, more so than before. Optimism is improving, but still in MANY towns there is a GLUT of inventory (see below).
02) As word of "dwindling inventories" hits the street, sellers that have been holding out, are listing their homes. This ADDS to the inventory.
03) The national story that Mr. Yun announces is not necessarily your local story. Many local Real Estate agencies here in NH are promoting this national story as if it were the local situation. It isn't, with the exceptions of some towns, few in number.
03) There is still a shadow inventory of bank owned properties and short sale owners yet to list or those already listed yet waiting on approvals or even to find a buyer. The bank owned properties are slowly released onto the market. Many of these do not get listed or even secured until many months after the foreclosure. I can name more than a few. So that represents uncounted inventory and needs to be factored into the newly cited bandwagon of optimism.
04) Buyers who buy into this story, those worried about rates perhaps rising in the near term and who fret that all the good deals are getting swept up and that they have missed the boat should just relax, take a deep breath and think rationally. I am predicting a near term pullback as sellers list thinking that FINALLY the buyers are back in the market and NOW MY HOUSE CAN SELL. Prices are rising in the short term, but in my opinion this will not sustain. There is too much inventory.
05) There is also the problem of needing to sell before you can buy. Few sellers, practically NO sellers, are taking offers contingent on a home sale where the buyer needs to sell before they can buy. So those houses don't move, not easily. This slows the movement of sales and brings downward pressure on prices.
06)New Hampshire's population too is largely aging (getting older and older each year as the State has issues attracting younger students to stay in the State and plant roots here, though our NEW governor is acutely aware of this problem and is taking steps to cure it. Do out of State younger couples want to move to a State of older folks, retirees and a generally aging population? This does not speak to a wild and crazy comeback for the NH Real Estate market.
07)One of NH's strongest markets is for that of second homes, but that is not your bread and butter segment that is needed for a REAL across the board real estate recovery. NH needs business tax breaks and new sources of revenue and that is why gambling casinoes are now back in the conversation at the State level.
07) The move up buyer does not have enough home equity to actually MOVE UP anymore and this will slow the housing recovery as renters will be forced to either build new or to wait until further equity is built in the home ownership of the move up segment. In other words there is a log jam centered around the move up buyer and affordability; new construction costs are generally prohibitive as the price of oil ripples down the building suppy chain:
Yes things are getting better, the housing rebound is for real but let us not run to the hills and proclaim all is good. ~Not yet~
MLS listed Residential Home Inventory in Southern NH towns as of 3-27-13
Portsmouth: 53 (OK PORTSMOUTH IS ONE OF THOSE TOWNS!)
Towns of the Conval school district: 172 (Antrim, Bennington, Dublin, Francestown, Greenfield, Peterborough, Sharon, Temple). Most of these towns have very LOW populations with the exception of Peterborough.
For more information and town by town data analysis, please contact me through my website: