The summer of 2009 will not be remembered fondly
- By Peter Francese

About the nicest thing we can say about this past summer is that it’s over. It seemed like it didn’t stop raining on weekends until September. And despite the rising stock market and leading economists’ promise of an improving economy, New Hampshire home sales showed only a slight improvement over last year.

The welcome rays of sunshine that we observed Labor Day weekend were accompanied by the news from the Federal Reserve Bank of Philadelphia that New Hampshire’s index of economic activity (Chart I, below) is not only the highest in New England by a substantial margin, but is the fourth highest in the nation.

This means that when the two heavyweights (unemployment and foreclosures) pulling down our state’s home sales are finally lifted, New Hampshire is in the best position to recover, both in terms of both sales and selling price.

Residential home sales statewide for June, July and August were 3 percent above last summer and year-to-date home sales were essentially the same as last year (-0.8 percent). But median home prices kept falling, resulting in $300 million less sales volume. The median home sale price this August statewide was $213,000, about the same as in August 2002.

As referenced above, two things are weighing heavily on the housing market here: rising unemployment and continuing home foreclosures. Chart II shows that while the unemployment rate in New Hampshire remained the lowest in the region (6.8 percent, the same as Vermont) and far below the national rate of 9.4 percent, it was still significantly higher than a year ago, when it was 3 percentage points lower. According to the New Hampshire Labor Market Information Bureau, there are now about 10,000 fewer people with a job statewide than the beginning of this year.

The NH Housing Finance Authority recently reported that home foreclosures were not declining as we had hoped they would. Through the end of July, there were almost 2,000 foreclosure deeds filed statewide, a mere 2 percent decline from the first seven months of last year. What that means is that since the beginning of the year, there was one foreclosure deed filed for every three residential home sales — a significant drag on the market.

Condominium sales were down 14 percent year to date, and the August median sale price of $165,000 was 12 percent below August of last year, and a bit below the 2003 median sale price. One issue weighing on condominium sales is that their median sale price was very close (74 percent) to the residential home median selling price. In some rural counties, it was equal to it or higher.

There is no doubt that the nation’s economy will improve later this year and next, and that our state’s economy will recover faster. But the pain inflicted by this recession has been severe, and the recovery will take more time than we might like.

This year’s NHAR Annual Convention at the Grand Summit Hotel in Bartlett looks like a terrific program. I am sorry I cannot join you this year, but either before or after don’t hesitate to contact me at peter@francese.com if I can provide any helpful marketplace information.

New statewide and county consumer data is expected on September 22 from the Census Bureau, and I will be reporting on it next month.

Table 1: Summer 2009 NH residential (non-condominium) home sales

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