Contrasting data muddies N.H. home sales picture

The value of homes in New Hampshire won’t bottom out until 2014, lagging behind most of the rest of the country, according to projections by a national real estate analysis firm -- a gloomy forecast that contrasts with N.H. Realtors Association data

The price of homes in New Hampshire won’t bottom out until 2014, lagging behind most of the rest of the country, according to projections by Zillow, a national real estate analysis firm. It’s a gloomy forecast that contrasts with the latest report from the New Hampshire Realtors Association.

Based on Zillow data, Yahoo!’s Spaces blog reported on March 15 that the Manchester area (which includes Nashua and most of Hillsborough County) is one of only nine metro areas in the U.S. where home values will continue to decline through the year. The nation hit bottom as a whole in October of last year.

According to the data, average home prices will decline 1.5 percent in value, to $183,600, and in the Manchester area, prices will fall 1.8 percent, to $181,800.

Among the other municipalities where home prices are in decline, according to the Zillow database as supplied to NHBR: the city of Manchester, down 1.4 percent; Nashua, down 0.9 percent; Merrimack, down 1.8 percent; Hudson, down 1.7 percent, and New Castle, down 3.1 percent.

On the upswing are: Londonderry, up 4.9 percent; Portsmouth, up 1.4 percent; Derry, up 0.9 percent; Dover, up 0.4 percent; and Salem and Rochester, up 0.3 percent.

Nationwide, home values will go up 3.3 percent, to an average $163,000, according to Zillow.

The value of homes declined 0.7 percent statewide in 2012, Zillow says. But the Realtors Association says the median price of homes in the state was 12.2 percent higher this past February than last February — the largest percentage gain in the last six years.

In Hillsborough County, prices rose 4 percent in February, and 9 percent year to date. Indeed, prices in every county increased, both in February and year to date, except for Cheshire (down 25.4 percent in February, and down 14.6 percent year to date) and Merrimack (down 2.2 percent in February and 14.6 percent year to date). Coos County home sales increased by nearly third, and Grafton by more than a quarter.

So what gives, besides the fact that the Realtors Association’s data is a month more up to date? Well, for one, the organizations are measuring two different things. Zillow’s “Home Value Index” is based on the median valuation of all homes in a geographical area, whether they have been sold or not – based on data provided by counties and other municipalities, though not all participate.

The Realtors’ data is based on actual sales reported by multiple listing services, though not all homes are sold though the services.

Finally, the Realtors Association doesn’t make predictions.

“Any talk about real estate price bottoms is, of course, speculative and subject to a whole host of economic forces. There is no real predicting the bottom, just as there is no real predicting the top. The only way to really know either is when your seeing it in the rearview mirror, two or three years after it has happened,” said the Realtors’ spokesman, Dave Cummings. “As an association, we don’t do market forecasts for the very reason that it is so unscientific.”

But Zillow thinks its numbers are derived scientifically, and provided an explanation of its forecasts with formulas that would not appear out of place on Albert Einstein’s blackboard – at least to those who are not scientifically minded.

But Zillow spokesman Cory Hopkins said it’s the multiple listing data that’s off, because it only includes the values of the homes that are sold, and they are skewed by a large number of sales at either the top or the bottom of the market.

But Realtors Association President Bill Weidacher, a Bedford broker, said Zillow’s analysis is “only conjecture.”

He pointed to other statistics that are easier to grasp: Inventory is down. For instance, last year Manchester had 262 homes on the market. Today, it has 198, a 25 percent decline. Last year it took 7.6 months to clear that inventory. This year? 5.1 months.

There are anecdotal signs as well, he said – there are more multiple offers on homes.

Besides, does it matter whether the exact date the market hits bottom is predicted?

“I say we are kind of mostly at the bottom,” Weidacher said.

What does buying at that vague state mean? “You will probably get it at a lower price, then by waiting to confirm that there was a bottom, and then, you are no longer there.” – BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

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