Concord area real estate forecast calls for a steady 2014
Four years ago, no one wanted to buy or build.
“We weren’t selling at all,” said developer Alan Johns, who owns Preferred Homes Inc.
Then in 2011, he built one home.
In 2012, he built four.
In 2013, he built seven homes that sold for more than $300,000 each – and already this year, he’s sold at least three of the homes his crews have started as spring thaws the Concord area.
“I’m feeling very optimistic,” Johns said.
Like the slow climb in Johns’s sales, data from the city and the New Hampshire Association of Realtors hints at a cautious but steady recovery in Concord’s housing market. While heavy mortgages and a depreciation in values still weigh on many, experts said the housing market has become a friendlier place for first-time buyers and some older homeowners looking to downsize.
“2013 was a very active, very good real estate year in the Greater Concord area, no doubt about it,” Realtor Rachel Eames said. “We’ve had . . . this pent-up demand of younger people who have wanted to buy homes.”
And 2014 should follow suit, though Jeff Keeler, president of the Capitol Region Board of Realtors, looked forward with caution. Many homeowners are still feeling the ache of recession, he said.
“We’re expecting 2014 to be a good year,” he said. “But we’re still in a situation where we lost about 35 percent of the residential value from the end of 2006 to a couple of years ago.”
At the end of 2013, the New Hampshire Association of Realtors reported that 14,260 units had been sold last year – 1,575 of them in Merrimack County. Statewide, that number is a 10 percent increase from 2012. The average price of those units was far below its peak at $270,000 in 2005, but it had increased 9 percent from last year to settle at $220,000.
In a recent report submitted to the city council this month, Deputy City Manager for Development Carlos Baia noted 31 single-family home units were built in Concord last year. That’s the highest number of new building starts in Concord since 2007, he wrote, even if it’s still far from the 52 that year.
“Not the numbers we saw 10 years ago, but better than we saw a couple years ago,” Baia said in an interview.
Waiting for spring (sales)
When the snow melts, the “For sale” signs will go up, Keeler said.
He’s been in the real estate business for more than 37 years and owns Keeler Family Realtors in Pembroke.
“We have a bunch of sellers who are ready to list as soon as the snow is gone and the grass starts turning green again,” he said.
But the market is precarious because it’s short on well-priced inventory, Keeler said. And many buyers entering the market now are looking for the same product – a home for a smaller family, whether that’s a new couple looking for their first home or an older couple looking to trade down.
“The baby boomers and the baby boomers’ kids . . . are both looking for affordable housing,” Keeler said.
But the fact that they are looking at all is a change from several years ago.
“We’ve seen more activity, substantially more activity,” Keeler said.
Eames, who owns Eames Realty in Concord, said she has seen that boost carry into the beginning of this year.
“Literally in the past four or five days, I have put four homes under contract and one piece of land,” Eames said.
Early data for 2014 indicates that success could continue. In February, the New Hampshire Association of Realtors reported the average price of single-family homes was up nearly 4 percent from this time last year. And the sheer volume of sales has increased more than 5 percent in the same period.
The market has also been viable enough for companies like R.J. Moreau Communities LLC to build onto existing developments, like Sandwood Crossing in Penacook and the Vineyards off Bog Road in Concord. Sales manager Deb Tallarici said the company plans to continue building those properties out this year.
“We have sales in both,” she said.
The market for single-family homes in Concord and Penacook has been strong, she said, and she expected a busy spring to bring buyers to the developer.
“It doesn’t make sense to build something out all at once and have things sitting there . . . unoccupied and not sold,” Tallarici said.
On Dwinnel Drive, one home might soon be unoccupied and not sold. Jeff Howard-Schofield and his wife put their four-bedroom home on the market roughly eight months ago, he said, and they almost immediately bought a smaller home they liked.
Their kids are all grown, and the couple kept an eye on the market until they thought the moment was right.
“We waited,” he said. “Like a lot of folks, we waited.”
But they thought the house would be sold by now. Instead, they’ve had to drop their listing price by nearly $40,000, to $424,500.
“My take is that there was more competition on the market than we expected,” he said.
He’s hoping a buyer bites quickly, especially as he and his wife hope to move into their new home soon.
“We’ve been waiting for spring like everyone else. . . . We’re still confident that we’ll sell the house this year,” he said.
What goes up
Even as Keeler predicted more listings in the spring, he also predicted home values still won’t be what they once were. And when the home is valued at less than its owner paid for it, a mortgage can leave him or her “financially landlocked,” Keeler said.
“Not that these people aren’t paying or keeping up with their mortgage, but they’re not in a position where they’re able to (sell),” he said.
That’s why many prospective buyers are first-time homebuyers who aren’t burdened by a mortgage, or older couples who have paid off a mortgage and are leaving their homes of many years for something smaller, Keeler said.
“Until the market rebounds, you’re going to continue to be upside down on your mortgage,” he said.
But a slow ascent back to higher home values might also be okay, Keeler said, because they also indicate a steadier market.
He recalled the mid-1980s, when he said homes were increasing in value by 20 or 25 percent per year before the market crashed. Then came the mid-1990s to 2006, when he said the market experienced its longest stretch of double-digit appreciation – and then its dramatic downturn.
“I’ll take the boring 3 to 5 percent appreciation, year in and year out, and stop these painful peaks and valleys where people get hurt,” he said.
Eames agreed – the good old days were not actually so good.
“Houses were going on the market, they were gone within moments or days,” Eames said. “We’re not at that. And quite frankly, I hope we never get to that again. That’s a market that obviously has issues.
“What goes up must go down.”
(Megan Doyle can be reached at 369-3321 or email@example.com or on Twitter @megan_e_doyle.)