Southern New Hampshire Homes -- Household Net Worth Is On the Rise!

The news is everywhere – and it’s good!  Although household net worth (the difference between the value of assets and liabilities) isn’t what it was three years ago, it’s on the rise.  Even if housing values don't go up quickly, as long as they aren't declining, the act of paying down a mortgage increases a homeowner's equity.

The Fed’s most recent “flow of funds” survey indicates that the net equity of national homeowners grew by almost $1 trillion in the final quarter of 2009, with a total increase of $2.8 trillion for 2009 as a whole. Compared to before the bubble popped, that’s really not that impressive. However, after three straight years of steadily dropping equities, it could signify the long awaited end of the housing crash.

In the housing markets of several cities, negative home equity is dropping; Los Angeles, San Francisco, Miami and Seattle are just a few examples. Good news for those with Southern New Hampshire homes, but even better news for some of the hardest hit cities, such as Phoenix, AZ, and Fort Myers, FL.

This is the best news yet for those trying to sell their homes, especially with most residential real estate markets' busiest season getting started. A few other things have been happening over the past couple of months that just might be the beginning of a slow but steady recovery of the market:

·    Median home prices are rising slowly but surely; potential homebuyers are getting a little more serious. Rather than wait for a cheaper house, they’re starting to realize that it might not get any cheaper.

·    The housing supply is shrinking. At the peak, we had 11 months worth of inventory. By the end of 2009, we were down to 7.2.  (Remember that 5-7 months of inventory is typically considered a 'balanced' market!)  Want a detailed market snapshot of your area?  Request one on my website!

·    30 year fixed mortgages dropped to the lowest point of 4.95% (median), and are now slowly on the rise. Buyers waiting for lower mortgage rates – just like those waiting for lower housing prices – should get serious about buying now.

Last and most importantly, consumer confidence is growing – something we badly need to get the economy on track.

What’s the moral of the story?  You don't need double digit gains in home prices to be able to build equity or to be able to leverage that equity when you sell and buy your next property, and this is a good market for either first time homebuyers, investors, or homeowners of 6 years or more.

If you’re trying to sell your home or would like to purchase one, I can help. Call me at 603-821-1134 or email me at Dave@DaveHeeter.com for more information.