Transcript Water in New Hampshire - Exeter Area Chamber of Commerce

Board of Directors
James Putnam, Chair
David Alukonis
Eric Herr
Dianne Mercier
Catherine A. Provencher
Kicking Into a
Higher Gear
Todd I. Selig
Michael Whitney
Daniel Wolf
Exeter Area Chamber of Commerce
Martin L. Gross, Chair
Emeritus
Directors Emeritus
William H. Dunlap
Wednesday, January 28, 2015
Sheila T. Francoeur
Stuart V. Smith, Jr.
Donna Sytek
Brian F. Walsh
“…to raise new ideas and improve policy debates through quality
information and analysis on issues shaping New Hampshire’s future.”
Anecdotal evidence from
Fed Bank of Boston,
January 14, 2015
• Sales or revenues are ahead of year-earlier levels according to most
New England business contacts in the manufacturing, retail, and
advertising and consulting sectors.
• Commercial real estate markets are steady to improving and most
residential real estate markets in the region continue to see price
increases and sales declines.
• With a few exceptions, manufacturers and retailers are not
increasing employment, while advertising and consulting firms
continue to add modestly to headcounts.
• Cost pressures vary, with selective price increases planned by
several respondents.
• The 2015 outlook is positive for almost all responding firms.
NH – Less of a decline, but a
slower recovery
Index of Total NonFarm Employment
(Seasonally Adjusted)
102.0
101.0
New England
Dec 2007 =100
100.0
99.0
98.0
New Hampshire
97.0
96.0
95.0
94.0
United States
93.0
92.0
US
NE
NH
Manufacturing, construction and
financial activities have not
recovered, government shrinks
Change in New Hampshire Jobs
5,200
6,000
4,100
4,000
4,700
4,100
1,200 1,100
2,000
100
0
-2,000
4,900
-400
-4,000
-6,000
-100
-3,500
-3,600
-5,100
-2,700
Oct 08 to Oct 11
Oct 11 to Oct 14
-8,000
-10,000 -8,700
Source: NH Economic and Labor Market Information Bureau
-4,500
2011-2013 job growth still leans
toward below average wage jobs
Change in NH Jobs from 2011 to 2013 by Average Wage Paid
8,000
7,089
7,000
6,000
5,803
5,000
4,000
3,000
2,000
1,000
0
Above Average Wage
Below Average Wage
Source: NH Economic and Labor Market Information Bureau
Portsmouth Area growth in
Finance and Health Care
Rockingham County unemployment
declines as employment increases
New Hampshire Job
Creation – Region and US
Percent Change in Payroll Employment Over Previous Ten Years
The Great Convergence
70%
60%
New Hampshire
50%
40%
United States
30%
20%
10%
New England
0%
US
NE
NH
1/1/2013
1/1/2011
1/1/2009
1/1/2007
1/1/2005
1/1/2003
1/1/2001
1/1/1999
1/1/1997
1/1/1995
1/1/1993
1/1/1991
1/1/1989
1/1/1987
1/1/1985
1/1/1983
1/1/1981
1/1/1979
-10%
Migration slowed in last decade
Net Migration Into and Out of New Hampshire
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
-5,000
-10,000
-15,000
-20,000
NH Residential Real Estate Sales and Prices
NH Single-Family Residential Home Sales and Price (MLS)
Source: NH Association of REALTORS
25,000
20,000
$300,000
Decline from the Peak:
Sales -40% from 2004
Price -25% from 2005
Median Home Price
$250,000
$200,000
15,000
Number of Units Sold
$150,000
10,000
$100,000
5,000
$50,000
0
$0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Units sold
Median Price
2014 YTD thru Nov.
10
Similar trends in Rockingham County
Rockingham County
MLS Residential Property Sales By Year
$310,000
6,000
5,000
$270,000
4,000
$250,000
$230,000
3,000
$210,000
2,000
Number Sold
Median Sold Price
$290,000
$190,000
1,000
$170,000
$150,000
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Median Price
Number Sold
11
Home Prices Return to the Long Term Trend:
NH Single-Family Residential Home Price (MLS)
Source: NH Association of REALTORS
$300,000
Median Home Price
$250,000
$165,787
$162,622
$151,504
$154,410
$169,787
$170,164
$187,954
$216,598
$226,354
$237,976
$227,807
$188,089
$170,158
$0
$141,372
$50,000
$134,749
$100,000
$152,500
$150,000
$206,266
$200,000
Inflation Adjusted Price
1998
1999
2000
2001
2002
2003
2004
2005
Median Price
2006
2007
2008
2009
2010
2000 Inflation Adjusted
2011
2012
2013
2014
But Rental Prices Have
Continued to Rise
New Hampshire Rents – NHHFA Surveys
State of New Hampshire
Median Gross Rental Cost
$1,200
$1,100
$1,000
Rent
$900
$800
$700
$600
$500
$400
All Units
2-Bedroom Units
13
Vacancies Have Sustained Ever
Increasing Rents
Rockingham County
Median Gross Apartment Rent
$1,400
$1,200
$1,000
$800
$600
$400
Rockingham County
$200
$0
Apartment Vacancy Rates
6.0%
All units
2 BDR
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
All units
2 BDR
14
Another Sign of a “Normal”
Housing Market
Ratio of Existing Home Price to Median 2BDRrent
2.40
2.20
2.00
1.80
1.60
1.40
1.20
1.00
Rockingham County
New Hampshire
15
0
01/69
01/70
01/71
01/72
01/73
01/74
01/75
01/76
01/77
01/78
01/79
01/80
01/81
01/82
01/83
01/84
01/85
01/86
01/87
01/88
01/89
01/90
01/91
01/92
01/93
01/94
01/95
01/96
01/97
01/98
01/99
01/00
01/01
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
01/10
01/11
01/12
01/13
01/14
Twelve Month Average At Annual Rates
New Hampshire Home Building
Monthly Housing Permits in New Hampshire January 1969 to July 2014
Grey boxes represent
recessionary periods
25,000
20,000
15,000
10,000
5,000
NH Foreclosures – Worst is
Over
NH Monthly Foreclosure Deeds
600
500
Actual
Trend
400
300
200
100
Source: Real Data Corp. compiled by NH Housing
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
0
Real Estate Activity 40% below the Peak
Real Estate Transfer
New Hampshire State Revenue
$180
$160
$140
$100
$80
$60
$40
$20
12 Month Running
Source: Monthly Revenue Focus, NH Dept. of Admin Services
Jul-15
Jul-14
Jul-13
Jul-12
Jul-11
Jul-10
Jul-09
Jul-08
Jul-07
Jul-06
Jul-05
Jul-04
Jul-03
Jul-02
Jul-01
Jul-00
$0
Jul-99
Millions
$120
Declines in Prices and Interest
Rates Affect Affordability
But…….
• NH’s Young households are burdened by highest level of
student debt in the Nation;
• Lending standards are more rigorous—Qualifying
Mortgage, 43% debt to income limit, etc.;
• With rents rising and mediocre job quality, more difficult
to save and qualify;
• Nearly 20,000 foreclosed units in past several years in
the state—some will not qualify;
• Lack of liquidity is keeping boomers in larger houses
than they need;
• Prices and interest rates are rising in past several
months, blunting recent affordability improvements.
NH’s Changing Housing
Environment Has Consequences
Environment
• New Hampshire’s population
growth is slowing down
• Job quality is poor
• Elders will be increasingly
larger share of owners and
renters
• Young home buyers are
challenged
• Recent trend away from
ownership and towards rental
• Different problems in different
regions
• General public, town officials
and business are not aware of
issues affecting NH’s housing
Consequences
• Fewer new households, and
fewer families
• Overpayment problems for low
income renters
• Elder overpayment, and Elders
not aware of options available
• Future home owners not aware
of ownership pitfalls and
advantages
• Multi-family production
shortages
• Geographic diversity more
important than urban core.
• Town officials not comfortable
changing existing regulations.
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Full report at: http://www.nhpolicy.org/report/housing-in-nh-pt-1-big-houses-small-households
NEEP Forecast for New
Hampshire October 2014
• The Granite State will add only a few hundred manufacturing jobs
over the next five years. However, it is expected that Granite
State manufacturing output will continue to increase in the
forecast period as it has in the past five years.
• In the private services sector employment will increase by about
2.0 percent annually in the forecast period. The fastest rate of
growth will occur in Professional and Business Services, followed
by Leisure & Hospitality, and Education and Health Services
employment.
• The New Hampshire real estate market has finally seen a return to
normal (pre housing bubble) price appreciation and sales growth,
according to state realtors. Foreclosure recordings declined
steadily over the past year. The state rental market remains strong
with rental costs leveling and vacancies remaining below 5
percent in most areas.
Look to an Improving National
Economy, Pushed by Housing
and Low Energy Prices
Labor Market Improves
Businesses Have Never Been as
Profitable…
After-tax corporate profit margin, %
Sources: BEA, Moody’s Analytics
…And Have a Significant Energy
Advantage
Industrial electricity
prices, $ Mwh
Italy
Japan
Germany
China
France
U.S.
U.K.
India
Korea
Natural gas price, $ mmbtu
Sources: Country sources, Moody’s Analytics
26
Households Have Delevered…
$ tril
Sources: Equifax, Moody’s Analytics
Housing Will Provide the
Catalyst…
Vacant homes for sale, for rent and held off market, ths
Sources: Census, Moody’s Analytics
…Meaning More Homebuilding
and Jobs
Millions of jobs
Source: Wall Street Journal, Moody’s Analytics
New Hampshire Center
for Public Policy Studies
Board of Directors
James Putnam, Chair
David Alukonis
Eric Herr
Dianne Mercier
Catherine A. Provencher
Todd I. Selig
Michael Whitney
Daniel Wolf
Martin L. Gross, Chair
Emeritus
Directors Emeritus
William H. Dunlap
Sheila T. Francoeur
Want to learn more?
• Online: nhpolicy.org
• Facebook: facebook.com/nhpolicy
• Twitter: @nhpublicpolicy
• Our blog: policyblognh.org
• (603) 226-2500
Stuart V. Smith, Jr.
Donna Sytek
Brian F. Walsh
“…to raise new ideas and improve policy debates through quality
information and analysis on issues shaping New Hampshire’s future.”
30
NH excels on
“current climate” indicators
Area
WFHousing
Regulatory
EdWorkFrc
Cultural
EdWorkFrc
EdWorkFrc
EdWorkFrc
Fiscal
Fiscal
GrowthReten
Indicator
Homeownership rates
Pollution Abatement / $ Value Added
High School grad rate
Voter turnout rate
Pct of pop in Science & Engineering workforce
Pct w/Associates+
Percent of children aged 3-4 in preschool
State Business Tax Climate Index
Public health/welfare spending per person in poverty
Manufacturing Supercluster Concentration (LQ)
NH Rank
2
3
4
4
5
6
6
7
7
7
But NH lags on
“future climate” indicators
Area
Fiscal
Infrastructure
WFHousing
Health
Fiscal
Energy
GrowthReten
Regulatory
EdWorkFrc
EdWorkFrc
Indicator
NH Rank
Top marginal corporate tax rate
38
Percent of bridges deficient or obsolete
39
Owner costs more than 30% of Income
43
Health Care Expenditures per Capita by State of Residence, 2009
43
State debt per $ Personal Income
45
Industrial Electric Prices
46
Capital Investment Projects per 100,000 pop
46
Land Use Restriction
47
Change in 35-44 y.o share of population, 2000 to 2010
48
Average student debt
50