Jack's New Hampshire Real Estate Blog

I was doing an appraisal today in Bedford NH and the homeowners daughter asked me whether I thought it was a good idea to buy a house now. They want to buy a house in Manchester NH and have heard that the market is declining. Like everyone, they are afraid that if they buy now they might second guess themselves if the same type house sells for a little less next year. Trying to hit the bottom of the market is called “market timing”.

Right now, in Manchester NH and southern New Hampshire homes are selling for about 70 percent of what they peaked at a year ago. At the same time we are experiencing some of the lowest rates EVER and have some of the best programs like FHA and Farmers Home /Rural Housing and incentives like the $8,000 Federal Tax Credit and NH housing Finance Authority (NHHFA) grant money. Another word, the cost of housing (low prices, low rates and many incentives) makes this THE most affordable time to buy in years.

So let’s say you wait until next year to buy that house in Manchester NH… Yes, maybe you time it right, but unfortunately when the rock hits the bottom, the artificially goverment reduced interest rates with again rise. That means that even if you buy at a lower price, it will cost you just as much (if not more) to finance the property due to higher interest rates. When the market returns, interest rates with be higher nationally and will affect your new purchase whether you are buying a condo in Concord NH, an apartment building in Manchester NH or a beach house in Hampton NH.

Having said that, everybody is in a different position and need to make the decision that makes sense for them. If you would like to discuss the market and whether or not buying is right for you, then give me a shout at 603-644-1000 or Email Jack

I met a client at a Manchester NH multi family property today. It was a 3 unit apartment building they bought 3 years ago for over $300,000 and today it is worth around $200,000. She wanted me to appraise the property and provide some advise on a plan of action as the building is causing them great pain. The couple bought it nearly 100 percent financed with a subprime mortgage with a $240K 1^st mortgage at 8 percent and a $60K 2^nd at 13 percent. They were told that they would be able to refinance the property, but since they are now upside down that is impossible. Declining rents combined with a costly mortgage equals a nearly $1000 per month NEGATIVE cash flow. They are stuck!

Unfortunately the Manchester NH apartment building market has suffered severe declining values and anybody who bought property from 2005 to 2008 (or refinanced to pull out cash) is most likely in touble and stressed. If you fall in this category, here are a few things you might want to do

Apply for a Tax Abatement - Since Manchester NH apartment buildings have declined in value so much, they are nearly ALL over assessed compared to other types of real estate. A successful tax abatement will lower your monthly costs and increase your cash flow (or reduce your negative cash flow). While you can apply yourself, I would recommend hiring a consultant or a professional appraiser for a tax abatement.

Short sale – In my client’s case, they cant sell the property traditionally since they owe $100,000 more than they could ever sell the property for. A short sale is when an owner sells a property to a buyer and the lender agrees to accept the purchase price which is far “short” of the mortgage balance as payment. Lenders do this because they realize it is better to get some of the money now rather than have to foreclose upon the property and take it back. If your finances are stressed and you can show hardship you may have a good chance of getting your short sale approved. I have taught courses on “short sales” and will gladly assist you with any questions you may have.

Fill those vacancies - Forget the high rents of yesterday. Lower your rents and keep your building filled. Your apartment building may show a negative cash flow but it will be a lot less damaging than vacancies.

If you need any assistance with your apartment building whether it is located in Manchester or anywhere in Southern New Hampshire, feel free to contact me.