Indicators: more robust home sales
for spring and summer 2011

—By Peter Francese

The 2010 Census has made it official: New Hampshire had 1,316,470 year-round residents on April 1, 2010. That’s about 80,700 more than on that same date in 2000, a 6.5 percent increase. While that rate of growth was below the national rate of 9.7 percent, it was by far the highest rate among the nine states in the Northeast region.

Maine’s growth rate since 2000, for example, was only 4.2 percent. Despite that slower growth, the Census still found almost 12,000 more people in Maine compared to the Granite state. Our other neighbor, Vermont, edged up just 2.8 percent from 2000 to 2010. New Hampshire’s population growth rate is slowing, however. During the 1990s, its residents increased 11.4 percent and the state gained 126,500 new residents.

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Measuring by the Philadelphia
Federal Reserve Bank's index of
ecomonic activity, New Hampshire
is recovering from this recession
better than any other state.

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Both Maine and New Hampshire retained their two seats in Congress, but Massachusetts, where growth was only 3.1 percent over the past decade, lost one representative out of its 10. Any state that grows much more slowly than the national average over a long period is in danger of losing representation.

More detailed information from the Census will be coming out this spring and early in the summer, and it will be reported here. But while the Census Bureau is busy processing its data, indicators from other sources suggest that New Hampshire REALTORS can look forward to much improved conditions for home sales.

Perhaps the best indicator is the Philadelphia Federal Reserve Bank’s index of economic activity, by which a high and rising index indicates an improving economy. By this measure, New Hampshire is recovering from this recession better than any other state.  Its index is 189, which is at a two-year high and is now the highest index among the 50 states. By comparison, the average for the other New England states is only 150, which is also the national average.

One other important indicator is our unemployment rate, which was 5.4 percent in November. That was the fourth lowest rate in the nation but is probably below 5 percent by now. Our state is clearly moving toward a period of economic growth that can only be good news for our housing market.

End of the year data from NNEREN shows that about 850 homes were sold in December 2010, a 2 percent increase over the previous December. The median selling price was $214,900, which was 4 percent higher than December 2009.

For the year 2010, the median home selling price was $215,000, which was 1 percent higher than the 2009 median of $212,000. That’s the first annual increase in several years, and when combined with positive indicators discussed above, suggests that home prices have stabilized and are likely to continue on an upward trend this year.

There were 10,525 home sold in 2010, which was 3 percent below the 10,810 sold in 2009. But four counties showed a year-over-year increase in home sales: Grafton up 7 percent, Belknap up 5 percent, Rockingham up 1 percent, and Carroll up 1 percent. One possible reason: Those are the four counties with the highest concentration of second homes.

Millions of Baby Boomers are approaching their retirement years, and quite a few of them have enough assets to afford a second home, which they might want as one of their retirement homes. The Wall Street Journal reported in its January 10, 2011 issue that despite lackluster home sales nationwide, “Sales in many vacation communities across the U.S. soared last year to levels not seen since boom times …”

That story reminds us once again that the demand for housing in New Hampshire is not just driven by employed individuals or families looking for a home to buy. There are also buyers who are just looking for a second home, a retirement home or both, and they are a significant factor in our state. There are over 60,000 homes in New Hampshire that the Census Bureau classifies as “…for seasonal, recreational or occasional use” – that’s more than 10 percent of all 600,000 dwelling units in the state.

In addition to 10,525 residential units sold statewide in 2010, there were also 2,635 condominiums sold at a median price of $165,000. That median was the same as last year, but unit sales were off 4 percent from 2009.

Interesting news for NH real estate, but time will tell how the real estate recovery plays out.