Windham NH Housing Market
Is the Windham New Hampshire real estate market recovering? 31 homes have been sold in the first four month of 2009. Are nearly 8 properties sold per month a sign of a healthy market? What were the home sales numbers in Windham NH when the market was good?
By the end of April in 2004 52 houses were sold, in 2005 55, in 2006 52, in 2007 33 and in 2008 30 properties had a sold sign in front of them. The numbers are clear, 2006 was the last “good year” for real estate sales in Windham, only slightly worse than 2005; by year’s end 174 homes were sold in 2006 compared to 207 houses in 2005.
Commulative Year to Date Home Sales in Windham New Hampshire
Then the bottom fell out. In 2007 only 152 single family homes were sold and in 2008 the total number of residential transactions was only 140, a 33% drop from the real estate market’s peak in 2005.
One third fewer sales is bad, but the perception is that the situation is much worse. Why? Can it be justified?
In general the public’s real estate sentiment is guided by the number of for sale signs on the streets and the length of time they stay in front of a house.
In the first four months of 2004 there were about 80 homes for sale in Windham NH. The inventory level started its steady climb in the second half of the year and in December of 2004 there were 122 active listings. By the end of 2005 this number rose to 160 than it peaked in July of 2007 at 193 residential properties for sale, more than a two-fold increase in the supply of homes.
Number of months to sell inventory of homes for sale in Windham NH
Since mid 2007 inventory levels have been dropping, by December of 2007 it was down to 113 and last year closed out with 116 homes offered for sale in December.
Then, why has the sellers market not returned yet? The absolute number of houses for sale, the magnitude of the inventory is only one component of the real estate market dynamics. The other just as important determinant is the absorption rate, that is how many homes sell per month. When the inventory level is normalized by the average number of homes sold per month, the result is the number of months it would take to sell the currently for sale homes on the market, i.e. the inventory measured in months.
In 2004 the housing supply varied between 5-8 months it would have taken to liquidate the then current inventory. In mid 2005 that number sharply jumped from 8 to 11 months. The period of 2006-2008 was relatively constant with about a year’s inventory on the market. The end of 2007 and 2008 experienced a sharp drop in inventory levels as frustrated sellers took their homes off the market for the winter months.
At the beginning of 2009 the real estate market in Windham NH doesn’t look too promising. Although the number of homes for sale is back to 120-140 the rate of sales is low, only 8 per month on the average; at this absorption rate it would take 15-18 month to sell the houses already on the market.
It is amazing that the average person not knowing or caring about inventory levels, or absorption rates develops the same intuitive conclusion: the real estate market in Windham has a ways to go before the sellers market returns. Unless sales pick up in the later part of 2009, this year’s sales track the volume in 2007 and 2008.
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