-by Peter Francese

The first quarter 2008 home sales data for New Hampshire look about as bad as it gets. (Please see county-by-county home sales table below.)  Fortunately, that awful three-month period is behind, us and there are reasons to think that the psychology of home buyers in our state may improve in the coming months.
          
In the future, Realtors will look back on this period with awe that our housing market could have deteriorated so fast and so far.  It did so in large part because of the disintegration of the highly leveraged and derivative addicted financial sector.  That unprecedented and for the most part unforeseen collapse meant that any potential home buyer had good reasons to hold off until the situation at least stabilized. 
    
Well, now the financial news is full of stories about emerging inflation, tight credit and a soft job market.  The average consumer has little reason to be optimistic about their near-term prospects.  But not all consumer households or all states are average.  Places and people with an above-average and growing incomes are more likely to see beyond the current bad news and be more optimistic about the future.

New Hampshire is one of those places.  Chart I below shows how our state differs from the nation in terms of household income for three important age and income categories.  In terms of the all household median income, New Hampshire, at nearly $60,000, is 123 percent of the United States median of $48,500, according to the latest (2006) Census Bureau American Community Survey.

But for households in the age category 25 to 44, where many families are in the market for a home, our state has significantly more high income households than the U.S. average and proportionally fewer low-income households.  The chart also shows that households with an annual income over $75,000 well exceed the U.S. average in every age category.

For New Hampshire, this means that we have an above-average number of households who probably would have an easier time getting a mortgage.  For example, there are over 40,000 households ages 25 to 44 and about 60,000 households ages 45 to 64 in New Hampshire with an income over $100,000 a year.

One of the things that might encourage a potential home buyer later this year is that the ratio of median home value to median household income has returned to close to or below 4 for every county for which we have data. This suggests that home values are returning to the more normative condition where families could buy a home for about four times their annual income.

Mortgage lenders, who understandably have been a trifle skittish lately, are more comfortable when the home price to household annual income is 4 or below.  The combination of a well-above-average number of higher income households and more affordable home prices here suggest that, in the absence of any additional Wall Street financial debacles, more households in New Hampshire are likely to decide later this spring or summer that now is the time to buy.

First Quarter 2008 NH residential (non-condominium) sales

 Source:  Northern New England Real Estate Network (NNEREN).  Statistics are based on information from NNEREN for the respective periods shown for the respective regions in the State of New Hampshire or all towns in the State of New Hampshire. All analysis and commentary related to the statistics is that of the New Hampshire Association of REALTORS® and not that of NNEREN.Note:  Chart I data and county median income data, where available, is from Census Bureau.
  
  
 The Real Estate Market Trends newsletter is provided for the benefit of the members of the New Hampshire Association of REALTORS®, Inc.  ©Copyright 2007 New Hampshire Association of REALTORS®, Inc. All Rights Reserved.Reprinted with permission of the NHAR and Peter Francese.
 

This entry was posted on Thursday, April 24th, 2008 at 8:13 am and is filed under Lakes Region Home, Peter Francese. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.