NH housing market offers hints of recovery
We may be heading into another New Hampshire winter, but some in the building industry are sensing a thaw in the state's long-frozen housing market.
Shane Carter, president of Ridgeview Construction in Deerfield, said his company is having its “best year ever.”
“Things have definitely been great for us,” he said. “We've really established ourselves well in the niche that we operate in, which is in sustainable building and remodeling.”
His business has seen an average 50 percent annual growth every year since 2008, but Carter views a more recent spike in sales as evidence of a recovery in the housing market.
Four of the six homes he's slated to start in the next few months are “tear-down and rebuilds of existing properties,” Carter said.
And while he said his customers have not had trouble qualifying for mortgages, it is taking longer to process those loans. “I think it's just a backlog because the interest rates are so low,” he said.
Home sales and residential building permits are heading up, both in New Hampshire and nationally.
According to Census Bureau figures released last week, 1,928 residential building permits were issued statewide this year through September; 1,470 were for single-family homes. That's up from the same period in 2011, when 1,814 permits were issued, including 1,216 for single-family homes.
Kendall Buck, executive vice president of the Home Builders and Remodelers Association of New Hampshire, said a jump in housing starts has created some cautious optimism among his members. Still, he expects recovery will take some time.
The building industry here peaked in 2004, when 8,653 residential permits were issued, 7,002 for single-family homes. After the economy crashed in 2008, Buck said, “there was a steady downward trend for quite a number of years, so we have a ways to go.”
His prediction: “I don't believe we'll see huge spikes ... in the number of units being built or houses being sold for the next few years. We're looking for a steady, steady climb out of what was a very deep trough.”
Carrie Rouleau-Cote, building inspector and code enforcement officer in Auburn, said her town has been having “a little bit of a building boom.”
“We've actually been very busy last year and this year,” she said.
Her town issued 30 residential building permits in 2011 and 31 so far this year. That's back up to the number issued in 2005 — and a big jump from the four permits in 2009.
Auburn's growth management ordinance limits developers to seven building permits a year, but allows them to ask for additional permits at certain times.
This year, three builders have done so, Rouleau-Cote said. “So basically, they've built houses, they've sold them and they need more permits to be able to continue marketing.”
If it's truly a recovery, however, it seems to be coming in fits and starts. In August, a total of 383 residential building permits were issued, compared with 183 during the same month in 2011. Single-family permits rose from 141 in 2011 to 179 this year. A jump in multi-unit permits, from 27 in August 2011 to 180 this year, largely accounted for the increase.
The total number of residential permits lagged again in September, from 309 in 2011 to 190 this year. Single-family homes were about the same: 161 in 2011 and 158 in 2012. But multi-unit permits decreased, accounting for the drop in total permits.
De Desharnais, vice president of operations for Ashwood Development in Hudson, said her company saw a spike in sales over the summer, but “now it's kind of flat-lined.”
What has been moving, she said, is “standing inventory,” houses built on spec in subdivisions in Concord, Nashua, Litchfield and Rochester.
Desharnais said she isn't seeing a lot of first-time home buyers, even though “this is a great time for people to do something because the prices are so favorable.”
Instead, most buyers coming in have sold other homes and want to move quickly. Three of the six homes her company has closed on in the last couple of months were in a 55-plus development in Litchfield.
“I think people were waiting for the market to bottom out,” Desharnais said.
The problem for the bigger “production” builders, she said, is that they've had to carry the costs of those active developments, such as roads and bank interest. “I don't know, if this goes on much longer, if that doesn't become the breaking point for some people.”
In Manchester, residential building permits have been heading back up after hitting a low of just 38 permits in fiscal year 2009. In the fiscal year that ended June 30, 2012, there were 72 permits issued, according to Max Sink, deputy director of building regulations.
Still, that's a long way from the peak of 279 permits issued in fiscal year 2005.
So far this fiscal year, through Sept. 30, the city has issued just 17 residential building permits, all but one of those for single-family homes. But Sink said a 40-lot subdivision off Wellington Road will bring that number up to 57 by year's end.
Wayne Richardson, president of New Hampshire Building Officials Association, is the code officer in Bedford. His town hasn't seen an increase in housing starts, but the permits that have been issued are for more modestly priced homes, he said.
What he has seen is an uptick in remodels, additions and rehabs. With credit tightening and home values depreciated, more families are choosing to upgrade instead of buying new homes. “It's reconfiguring what you have,” Richardson said.
Jan Jacome is the owner of Crossroads Contracting in Londonderry, which specializes in remodeling. In the past six months, she's seen a spike in customer interest.
“They've made that decision that they are going to remodel, they are going to move forward,” she said. “They're feeling more confident, and I'm certainly glad to see that.”
Jacome has seen a change since the recession. “Before 2008, most of our customers were really confident about their money; they wanted to, and did, spend their money on keeping up with the Joneses, if you will,” she said. “And what changed in the last few years is that with the uncertainty that everyone has about what's next ... their focus is on conserving their money.”
Jacome does see signs that the construction business is improving: contractor signs appearing on projects between her home in Derry and her office in Londonderry.
“I always want it to be my company's sign, but I love to see my competitors' signs up because then I know people are spending money,” she said. “And I have seen a lot more recently.”
Richardson said Bedford is seeing an increase in commercial development, and historically, residential growth usually follows.
He said most builders he talks with believe the market will come back but will never be what it was during the mid-2000s housing boom. But he said, “Well, truthfully, I don't think we want to see it that way.
“It was just uncontrolled.”
- - - - - -
Residential Building Permits in New Hampshire
|Total annual permits issued||Total permits issued through September|
|All residential||Single Family||All Residential||Single Family|
|* An increase in housing starts is attributed to a first-time home buyers tax|
|Source: Home Builders and Remodeloers Association of New Hampshire and Census.gov|
|Barbara Anderson/Sunday News|
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