First-time home buyers are dominating activity in the Southern New Hampshire real estate market.

Some people, including Peter Francese, demographic forecaster for the New England Economic Partnership, see rays of optimism reflected in the flurry of first-time buying.

Typically people in their late 20s to early 30s, first-timer buyers are increasingly attracted by lower home prices, lower interest rates and an $8,000 tax credit for first-time buyers.

"This shift in activity among 28-year-olds indicates they think the future is very bright," Francese said. "I think we are seeing a turnaround in people's attitudes."

Home sales in Rockingham County declined by 29 percent and median prices by 16 percent for the first two months of 2009, compared to a year ago, according to Northern New England Real Estate Network statistics.

"Things are extremely difficult out there." Francese said.

But sales numbers have held steady and even increased in some Southern New Hampshire towns in the first quarter of this year.

In Salem, 44 homes were sold, compared to 37 in 2008. Pelham saw 20 homes sold, two more than in the first quarter of 2008. Twenty-two homes in Windham were sold, compared to 18 last year. And Londonderry remained nearly stable, with 27 homes sold this year and 28 in 2008,

The market has worked in favor of some first-time buyers, including Corey Moore and Laura Marden of Windham.

Moore and Marden, who are renting a townhouse in Windham, found out Wednesday the offer they made on a ranch house was accepted.

When the market was at its peak in 2005, Moore thought he would have to wait until he was much older and more established to buy a house in his hometown of Windham.

Moore, 29, operations manager for a window tinting company, and Marden, 25, a scientist, spent almost two years looking at fixer-uppers in the $200,000 to $230,000 range. Those houses had major problems and would have cost a lot of money to correct, Moore said.

But this month, the couple found what they were looking for in an oversized ranch in good shape on 1.5-acres on Dublin Road. Their offer was accepted last week.

Brad Dinsmore, owner of Prudential Dinsmore Associates in Windham, represents Moore and Marden.

He said first-time buyers were largely shut out of the market the past 10 years. Now, with lower prices, these buyers are back in the game.

"Our agents are trudging out into price ranges that they haven't seen before," Dinsmore said.

Not only are prices dropping, but sellers are motivated.

About 20 percent of Southern New Hampshire homes sold in the first quarter of 2009 were previously in foreclosure, Francese said. Foreclosures force prices lower since banks are motivated to sell, typically preferring to lend money rather than manage property.

Two other factors are contributing to the surge in first-time buyers, Francese says.

One is age. The first-time buyer demographic, typically younger couples, is growing for the first time in 15 years, both nationally and in the state, so there are more people looking for starter homes, he said.

And first-time buyers have fewer barriers to buying. They don't have to sell a house to buy one.

Perhaps the biggest motivation to buy for the first time is the extremely low interest rates being offered — 5 percent and lower on a 30-year fixed-rate mortgage.

"That's really a special incentive for somebody of modest means to buy a home," John Conley said.

He is president of the Granite State South Board of Realtors, which represents 18 towns in Southern New Hampshire. He has been a Realtor for about 30 years.

Conley, of RE/MAX 1st Choice in Londonderry, said about one out of six of his clients used to be a first-time buyer. Now, first-time buyers are about five out of six of his clients, he said.

Realtor Mark Oswald, also of RE/MAX 1st Choice in Londonderry, is working with far more first-time buyers than he did in the past.

He said he spends 75 percent to 80 percent of his time showing houses and writing up purchase-and-sales agreements for first-time buyers. In the past, he devoted about a quarter of his real estate attention to them.

"The bread and butter in Southern New Hampshire is the first-time buyer," Oswald said.

Oswald has seen an uptick in business recently and thinks first-time buying "is what is going to lead us out of this" down real estate market.

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Prices are dropping

TownMedian sale price first quarter 2008Median sale price first quarter 2009

Londonderry$307,875$245,000

Pelham$341,883$267,500

Salem$288,900$228,500

Windham$437,500$347,500

Source: Northern New England Real Estate Network