MANCHESTER -- More than three years after the collapse of housing prices and home foreclosure woes that helped trigger the "Great Recession," the local home sales market is still struggling to regain its footing.
According to Laura Beckwith, Principal Broker at Josiah Allen Real Estate, there are 86 residential homes on the market and 37 condominiums for a total of 123 residential properties in Manchester -- a number significantly above the norm, she said. In a healthy market there would probably be about 50 homes available in Manchester at any given time. What may be even worse is that the trend is one that is expected to continue in the immediate future, she said.
"I have a professional understanding of anticipated listings for early spring this year, more so than usual," Beckwith said. "The listings are going to grow considerably in the next few months. I suspect we’ll have another 50 listings coming into the overall marketplace."
According to real estate sales associate with Josiah Allen Real Estate, Michelle Wright and Realtor for Remax Star Properties, Clare de Zengotita, the trend began somewhere between two and four years ago.
Not only has inventory consistently increased over that time, but de Zengotita said that it also takes longer to sell the properties. "In 2011 houses that sold, again this is an average ... it’s like from 235 to 270 days on the market," she said.
According to Beckwith and Wright, a lot of the homes that are currently on the market are primary homes.
"A large portion of them are from local residents," said Wright. "I’d say at least more than 50 percent are. It’s really hard to say without looking up each one definitively, but definitely more than half are from local people who are trying to move."
Wright continued to say that because it is expensive to live in Manchester and jobs are scarce people are finding it difficult to make it.
Additionally, Beckwith said there are more listings from second home owners who are ready to sell their homes.
The trend was something that concerned Select Board Chairman Ivan Beattie.
"To me it exposes the fact that there’s volatility in our grand list," Beattie said. "It could interject quite a bit of volatility into the grand list."
Head lister Pauline Moore said that the town’s current Common Level of Appraisal (CLA) was 109 percent, which would drive down the tax rate.
The CLA measures how far from market value properties are selling. Moore said ideally a town wanted their CLA to be as close to 100 percent as possible and the fact that Manchester’s is over 100 percent is a concern.
"It is a concern because it is an aggregate over three years and if it continues we’re going to have to do something about it," Moore said. "As soon as you start [reassessing] anything more than 20 percent of the properties the state considers it a reappraisal."
In a telephone interview last week, Beattie expressed concerns that if the CLA continues to climb it could result in the town conducting a reappraisal, which is very costly. However, the town would not be required to conduct a reappraisal until the Coefficient of Dispersion (COD) -- which is currently at 18 -- reached 20, Moore said.
The COD measures how equitable the assessed values are -- if all values are too low or too high then everyone is assessed equitably and the COD would have a low value. If the COD has a high value (over 20) it indicates there is not good equity between the assessed values, Moore said.
Moore said she hoped the town would not have to go through a reappraisal anytime soon, but that the town would need to find some level of consistency in the assessed value of homes.
Moore said that homes on the market have not shown consistency issues compared to their assessed value and that some have sold above grand list value while others have sold slightly, or significantly, below grand list value. However, there is one area where Moore said there are consistency issues.
"The condos are one of the areas that have shown consistent sales below grand list value," she said. "Condos tend to fall faster than houses. They tend to fall faster and rise slower."
Beckwith, however, said there has been an unprecedented number of houses on the market in Manchester and Dorset that are below $200,000. One of the factors contributing to that is that there has been a 25 to 30 percent downward adjustment in the value of homes.
"A home that was assessed in the $500,000s we closed at $300,000 even," Beckwith said. "There’s homes that were assessed at the $800,000 mark that we’re selling in the $400,000s, usually due to distress."
Wright said there are a number of properties on the market ranging from both ends of spectrum. While on the lower end she said there are probably a lot of people who want to buy and can buy, it is currently difficult to gain financing.
Mortgage Account Officer with People’s United Bank, Robin Mowrey, said there is one area, more so than others, that presents a problem for people.
"The biggest obstacle is credit scores," Mowrey said. "All loans are based off of credit scores, so whether they’re a first time home buyer or whether they’re trying to refinance, if they’ve had difficulty in the last twelve months it’s going to be an issue."
At the present time, Mowrey said it is actually easier for first time home buyers to finance their home than other people because of the numerous state and federal programs that exist. Additionally, Mowrey said that first time home buyers can choose not to put any money down or they can put 3.5 percent down -- the minimum payment required for a Federal Housing Administration Loan -- on a home whereas other people have to put down 20 percent to avoid private mortgage insurance.
In addition to homes selling below their assessed value, the cost of land has also declined.
"Land is rarely selling, but the land values are getting to be quite extraordinary," said Beckwith said. "You used to not be able to buy a piece of land under $100,000 and now you may have a choice of 25 parcels or building lots. They’re interesting times and [for] those who want to invest it’s prime time."