After a brutal couple of years, New Hampshire's housing market is emerging from 2009 with a burst of good news. Prices have steadied in recent months, and sales are up considerably over the same period last year. And many builders, real estate brokers and lenders say they're seeing something they haven't in a long time: new homes rising from the ground.

The recent uptick in activity is especially encouraging since the holiday season is typically the slowest time of year for real estate. But those in the industry are tempering their hope with a strong dose of caution, warning that a quick and complete rebound is unlikely.

"We're feeling a little optimistic, and it feels better out there, in general," said John Langill, president of Cherry Hill Homes in Pembroke. Langill is building three new homes on speculation, with a fourth possibly planned for late winter. He recently completed sales on two other houses and is looking to buy new land.

"We're basically keeping things going, but we're ratcheting up a little bit," Langill said. "We're not in a cocoon, rolled up hiding under a rock someplace."

Still, the recent developments seem positive only when compared with the brutal state of the market in recent years. And the picture gets hazier with closer scrutiny. Median sales prices in New Hampshire are still lower than they were a year ago, and some market analysts expect them to remain flat for much of the next year, if not longer. People are losing their homes in much greater numbers than a few years ago, though the number of foreclosures is no longer increasing at a brisk pace. Some brokers are concerned that the first-time homebuyer credit may have artificially boosted sales in recent months, creating a false sense of momentum that may not be sustained when the credit expires in the spring. And broader economic trends - such as high unemployment rate and stagnant wages - are also reasons for caution, analysts warn.

But those who monitor the industry say statistics and anecdotes bode well for the new year. And they note that New Hampshire, which did not see as steep an increase in home prices at the market's peak as other states, is in far better shape than many other parts of the country.

Barbara Ruedig, a Realtor with Ruedig Banzhoff Realty in Concord, said she was worried earlier this year by the slow pace of business. But the past few months have given her hope, she said. Her office of seven agents has been exceptionally busy, she said, with three closings scheduled before end of year and three more on the calendar in January.

"That kind of activity is very unusual in the winter," Ruedig said. "And we're anticipating a very busy spring."

Kenneth Holmes of North Branch Construction said he's looking forward to an increase in business next year as well, "based on the projects we're getting calls about or being asked to price."

"People feel it's a good buying opportunity," Holmes said. "Everyone knows the market has been weak, so if they can afford it, they've lost the apprehension they may have had."

Sales holding steady

Statewide, 1,141 homes sold in November, the most recent month for which figures are available. That was a 70 percent increase over the same month last year. In Merrimack County, 126 homes sold last month, the highest number in a year and a half.

Experts point to several reasons behind the late-year sales surge: low interest rates, low prices and the $8,000 tax credit for first-time homebuyers. That credit was due to expire in November, but a last-minute extension pushed it through the end of April next year. In addition, a smaller tax incentive was added for people who have lived in their current home for at least five years. Several real estate agents credited those incentives with boosting sales in recent months, especially among less expensive homes. (next page »)