‘Home-flippers’ return to real estate market in New Hampshire

More than a quarter of all the homes sold in New Hampshire in the first quarter of the year were distressed properties, meaning that “home-flippers” are coming back on the market, according to a newly released report.According to the inaugural RE/MAX of New England Investment Insight Report, during the first quarter of 2012, 26 percent of all home sales in New Hampshire involved a real estate-owned or short-sale property.Real-estate owned is a term that refers to properties that are owned by the lender, whether a bank or government institution.The report examined first-quarter investment activity in Connecticut, Massachusetts, New Hampshire and Rhode Island. New Hampshire’s distressed property sales rate was the highest of the states studied. Trailing the Granite State was Rhode Island, where 15.3 percent of all sales in the first quarter were real-or short sale transactions, followed by Connecticut at 12.3 percent and Massachusetts at 11.5 percent. The national average was higher than all the states in the report however, at 26.5 percent.Investors tend to target distressed sales when the prices are deeply discounted compared to regular listings. In New Hampshire, distressed properties were discounted by as much as 30.6 percent in the first quarter.In the first quarter of the year, 776 foreclosures and 223 short sales were sold in the state, compared with 596 foreclosures and 153 short sales in the same quarter the previous year.While the number of sales increased, prices for both foreclosures and short sales dropped year over year. The sale price of an average foreclosed-upon property was $153,700 in the first quarter of 2011 and fell to $140,400 in the first quarter of 2012. The average short-sale price was $190,700 in the first quarter of 2011, compared with $158,600 in the first quarter of 2012.Lower prices means more real estate “flippers” are holding “properties longer in order to build some extra equity and greater profit,” said Salem-based RE/MAX Realtor Carrie Gardiner. “Still, no one is holding on for the long haul. The ultimate goal for most investors is to make a profit sooner rather than later.”According to the report, New Hampshire “hot spots” for home-flipping were in such cities as Manchester, Nashua and Salem, where investors can find low-priced properties, “do minimal work, and then flip the home to make a profit,” it said. “Multi-family homes are very popular in these areas.”Dan Breault, executive vice president and regional director of RE/MAX of New England, said the return of home-flippers will play a vital role in the appreciation of property values across the region over the next several years.”We weren’t seeing flipping in the market in recent years,” said Breault. “We’re experiencing it now because prices are beginning to inch up; it makes for a great market for investors to purchase distressed properties, rehab them and put them back on the market.” — KATHLEEN CALLAHAN/NEW HAMPSHIRE BUSINESS REVIEW