Real Estate

[secondcurve]

What do folks think about the real estate market? Is it time to trade-up? Do we have further to fall? It seems like activity has been incredibly slow this summer. Any input would be appreciated.

[BroadHopper]

Good time to trade up. Even though you are selling low, you are buying low. Interest rates are low as well.

Only trouble is selling. Lots of homes for sale and it is a buyer's market.

[Resident 2B]

I believe it is a good time to move up because the cost of money, the mortgage interest rate, is unusually low.

We are considering selling our place on the lake and putting the house we still own in Mass. back on the market. If they both sell, an oceanfront or near oceanfront home in Southern NH would be our next step.

We had our place in Mass. on the market 16 months ago, but took it off after 6 months due to the very slow market back then. I believe the New England housing market is near the bottom and starting to get more active. I do not think the prices are going to move upward very soon though.

When you are both selling and buying, what you lose on one end of the transaction, you gain on the other. You have to sell before you buy to make the most of the opportunity. The interest rate becomes most important and there are great rates out there right now.

R2B

[Airwaves]

Secondcurve, define trade up, what do you have now? If it fits the bill I might be interested. PM me if you'd like.

[jmen24]

I guess we are not looking at the same locations, but the market in most areas we frequent has not gone down at all. The houses that were on the market for the past three years are still listed within 25-50K of there original asking price. The national and state median home sales number has come down but the bottom of the market is lower than it was two years ago and that has to do with the foreclosures on the market. Most of these homes are still way over priced at 100K and needing to be completly gutted in order to make anything out of them.

The home directly accross the street from me just went up two weeks ago for 300K and that is what they called a "fire-sale price". I would not give them 250K for it, its a nice home, but has no land and sits right on top of the road, no privacy.

I play golf with some of the local realtors in town here and they seem to feel the same way, the only thing that is going for the buyer is they can throw out a low ball and they do not have 10 other people jumping at the chance to go over them. That and the rates are nice and low.

Some thoughts on this from others perspectives would be nice as I have not come accross very many realtors in this area that feel the market is down at all just a lower bottom. The towns of note that I mentioned about above. Loudon, Salisbury, Andover, New London, Wilmot, Sutton, Sunapee, Newbury, Springfield, Concord. Obviosly some areas are way down next to these towns, but the valuations in those communities have always been lower.

Just as a side note, I do not expect prices to go lower, if you are interested there is plenty to look at, but I do not feel that the pricing has come down as far as it has gone up to match historical increases in property market values, homes are still overpriced for what they are.

[LadyJane]

I believe it is a good time to buy, for the reasons already stated. Yes, prices have dropped nation wide, but not evenly. In some areas the prices have gone down dramatically, like parts of Florida, and in other areas they have not fallen as much, or not at all. I was told by a realtor that properties in desirable areas hold their value moreso, and certainly the Lakes Region is a desirable area. That's why I can't stay away from it for too long and would love to live there !!!

[codeman671]

According to the agent I am dealing with in the seacoast area, properties are definitely beginning to move, up to a certain price range. For instance in the last year there has only been nothing sold in the $700k+ range in Dover according to the sold properties search on nneren. Most properties moving are the low to mid tier stuff.

We are on the market in Gilford, as soon as our place on the island sells we are going to list our Dover home and pick up something waterfront down here. The overall hastle of owning/maintaining two homes, multiple boats, 2 kids (and a 3rd on the way), 4 dogs, and trying to run a company is getting to be a bit too much. For us, upgrading to one large waterfront property down here just makes sense.

[VtSteve]

If you didn't buy at the peak, and not much was for sale during the peak in your particular area, it was pretty hard to notice. I saw one waterfront property over here go from $895 list all the way down to $695k. I think it's back up now. If you didn't notice the $200k drop, it didn't happen At least that's the way many realtors dealt with it.

From a cursory review when I was there in August, I saw some prices in the Meredith area that were lower than what I was familiar with. But you have to track neighborhood addresses to really get a feeling, median prices mean nothing.

Too bad real estate taxes didn't follow suit

[gf2020]

New guy chiming in here.

The Winnipesaukee market is really just a delayed reflection of the Greater Boston and Southern New England market, which is where the vast majority of the buyers come from. As the economy continues to improve in those regions, an upswing will occur in resort area property as well.

I started looking at land for sale in the Meredith area earlier this summer. I can't afford waterfront but I would like to be in a neighborhood that has common waterfront access or at the very least decent proximity to public access. The parcels that I am considering here (and in the Bridgton, Maine area too) are definitely priced less than similar parcels sold for as recently as 2 years ago.

What's interesting to me as a potential buyer is that there is not a lot of rhyme or reason to what drives the asking price for some of these pieces of land. It's like the seller and their realtor just made something up to see if it would fly. I guess if they figure that nothing is selling anyways and they don't really need to sell, then what do they have to lose. I'm talking about some lots that have been on the market for over a year with no or very little price adjustment.

I have done my homework and the lots that I am interested in are owned by people who have owned them for several years. Even at today's lower prices they are still making money over their original investment.

Now if my wife and I could just make up our minds what we want to do!

[Sue Doe-Nym]

Originally Posted by gf2020

New guy chiming in here.

The Winnipesaukee market is really just a delayed reflection of the Greater Boston and Southern New England market, which is where the vast majority of the buyers come from. As the economy continues to improve in those regions, an upswing will occur in resort area property as well.

I started looking at land for sale in the Meredith area earlier this summer. I can't afford waterfront but I would like to be in a neighborhood that has common waterfront access or at the very least decent proximity to public access. The parcels that I am considering here (and in the Bridgton, Maine area too) are definitely priced less than similar parcels sold for as recently as 2 years ago.

What's interesting to me as a potential buyer is that there is not a lot of rhyme or reason to what drives the asking price for some of these pieces of land. It's like the seller and their realtor just made something up to see if it would fly. I guess if they figure that nothing is selling anyways and they don't really need to sell, then what do they have to lose. I'm talking about some lots that have been on the market for over a year with no or very little price adjustment.

I have done my homework and the lots that I am interested in are owned by people who have owned them for several years. Even at today's lower prices they are still making money over their original investment.

Now if my wife and I could just make up our minds what we want to do!

You are absolutely correct about the huge discrepancies regarding asking prices. There are owners (and realtors willing to go along with them) who want to believe that the marketplace has returned to the inflated levels of 2006. This is obviously not the case and results in almost a two tier market - those who don't have to sell and price their properties unrealistically versus those sellers who are truly interested in selling and price their properties in line with present conditions.

This situation causes people, including realtors, to misinterpret the present increse in inventory. Yes, there has been an increase but it is not as huge as people think if you back out the newly listed properties that are ridiculously overpriced.

Good luck on your search, hopefully your patience and thoroughness will be rewarded.

[VtSteve]

Absolutely correct GF. Some communities have touted their asking prices as examples of how their communities have retained their values. But as you point out, listing a property that won't sell at those prices is not proof of anything, except no buyer.

In areas where prices stay higher and don't change, this can be more reflective of owners that aren't so over-leveraged that they have to sell. Obviously, some areas attracted a higher percentage of speculators and second, or even third home buyers. Those area have many sellers that need to sell.

I recently witnessed a Florida property that sold at "auction", for $100. The buyer was the bank holding the paper I can only think the auction occurred when the banker closed his office door, submitted the bid to himself, and won

[LadyJane]

[QUOTE=gf2020;107463]New guy chiming in here.


IWhat's interesting to me as a potential buyer is that there is not a lot of rhyme or reason to what drives the asking price for some of these pieces of land. It's like the seller and their realtor just made something up to see if it would fly. I guess if they figure that nothing is selling anyways and they don't really need to sell, then what do they have to lose. I'm talking about some lots that have been on the market for over a year with no or very little price adjustment.

I agree with your observations. I shopped for land in the Meredith, Center Harbor area for two years. I learned a lot. I made a STRONG offer on one lot that had deeded access to water, and the owner did not accept it, and did not counter offer either. A year later, it was still on the market. Funny...I ended up buying a piece of land in Sandwich. I wasn't even looking there initially but fell in love with the town. Good luck with your search. It's fun looking !!

[BGB2]

Home prices, construction and even the size of new dwelling appear to have bottomed out in CT.

[Paugus Bay Resident]

To add a real world example, we listed our house for sale last Saturday. Yesterday, we accepted an offer at about 95% of our listing price. I certainly didn't expect it to sell that quickly and was prepared for 3 - 4 months of carrying costs. So, my observation is that if a property is priced right, it will sell.

[escaped from NJ]

gf2020, have you considered island property rather than land in Meridith?
We also were initially going to look for land once we realized we couldn't afford (or didn't want what we could afford) on the mainland. One day we just decided we had nothing to lose by looking on the islands and we are so glad we made that decision. We bought an island cottage 5 years ago and it was the best thing we've ever done. It was the only way we could afford property on water. The only negative to me is that we have to wait for a good thick ice to visit in the winter but since we live 4 hours away, we don't come up much in the winter anyway. I don't know how island properties have held value in comparison to mainland properties. Maybe some other member could comment.

[RI Swamp Yankee]

Originally Posted by BGB2

Home prices, construction and even the size of new dwelling appear to have bottomed out in CT.

"Bottomed out" ..... groan ....

[gf2020]

Originally Posted by escaped from NJ

gf2020, have you considered island property rather than land in Meridith?

Thanks for the input. I don't think an island would work for us. My wife requires a bit more "civilization" (quick access to Dunkin Donuts, grocery store, etc.) and we are looking to develop a modest home for 4 season use. My soon to be teenage twin sons have visions of snowmobiling, ATVing, etc. in addition to fishing, boating and watersports in the summer and skiing and snowboarding in the winter.

[codeman671]

Originally Posted by gf2020

Thanks for the input. I don't think an island would work for us. My wife requires a bit more "civilization" (quick access to Dunkin Donuts, grocery store, etc.) and we are looking to develop a modest home for 4 season use. My soon to be teenage twin sons have visions of snowmobiling, ATVing, etc. in addition to fishing, boating and watersports in the summer and skiing and snowboarding in the winter.

We thought the same thing until we tried island living. If you are looking to move up for year round use then an island is not for you, unless you use a hovercraft or airboat (lots of fun!). For summer use the adventure of island life can't be beat.

[mcdude]

From the Laconia Daily Sun (10/23)

Lakes Region Real Estate Market Report / Roy Sanborn

Winnipesaukee & Winnisquam
3rd quarter waterfront sales report

It is great to report that the waterfront sales
on Lake Winnipesaukee and Lake Winnisquam
seem to have held their own over the summer
season despite a downturned economy and general
reluctance on the part of everyone to buy just
about anything. Astute buyers still recognize that
waterfront properties are a great place to invest
their money. Unlike the stock market and other
investment opportunities, buying a waterfront is
a tangible, secure investment right now and is
something that can really be enjoyed.

In the 3rd quarter of 2009 there were 26 sales
on Winnipesaukee (including island properties) at
an average price of $1,076,621. There were seven
homes sold at over $1-million with the highest
sale being the property at 55 Broadview Terrace
in Gilford that changed hands for a mere $6.5-million.
This is a 11,464 square foot, 6 bedroom, 8
bath home constructed in 2005 sitting on a 1.59-
acre lot with 270 feet of frontage. Obviously, this is
a fantastic home with all the amenities and quality
one would expect at that price.

Year to date, there have been 55 waterfront
transactions on the big lake at an average price of
$960,961 with a total sales volume of $52.85-million.
That represents about 40-percent of the total
sales volume for all the residential properties in
the towns that share the waterfront on Winnipesaukee.
So how does that compare to last year? In
2008 there were 53 waterfront transactions over
the same time period with an average price of
$1,314,639 and a total sales volume of $69.68-million.
That sales volume represented about 39-percent
of the total sales volume for the same period
last year. Pretty consistent.

Sales on Lake Winnisquam got off to a real slow
start in the first six months of the year with only
two sales. However, in the 3rd quarter there were
nine transactions at an average of $529,667 and
a total volume of almost $4.8-million. The highest
sale was at 87 Collins Brook Rd at $740,000
for a 4,572 square foot, 14 room, 6 bedroom home,
with 170 feet of frontage. The 11 transactions year
to date on Lake Winnisquam came in at an average
price of $495,409. That average is down from
the $620,250 average posted in 2008 but the total
sales are up from eight sales in the first three
quarters of 2008.

As with the residential market in general, the
average prices on waterfront properties are down
a bit signaling that there are some good deals out
there for those buyers looking for their slice of the
Lakes Region waterfront pie. Currently there are
27 properties available on Winnisquam ranging
from $275,000 to just under $2-million.

On Winnipesaukee there are over 130 properties available
where you can spend as little as $200,000 for
an island property and just under $400,000 for a
mainland direct waterfront access. So if you are
looking for a waterfront retreat now is the time. I’d
be happy to help, especially if you want to match
that $6.5-million sale last month!

Log on to my blog at www.lakesregionrealestatenews.
com and leave me your thoughts on this
report or the real estate market in general. Roy
Sanborn is a REALTOR® for Roche Realty Group,
at 97 Daniel Webster Highway in Meredith and
can be reached at 677-8420.

[fatlazyless]

From McDude's above post we learn that:


"Year to date there have been 55 waterfront transactions on the big lake at an average price of $960,961 with a total sales volume of $52.85 million."


"In 2008 there were 53 waterfront transactions over the same time period with an average price of $1,314,639 and a total sales volume of 69.68 million."

......

What this says to me.

The selling price of the average waterfront home went from $1,314,639 to 960,961 when comparing 2008 to 2009. That is a drop of 353,678, which is 27-percent.

So, it just seems to me that the only way the waterfront could have taken a faster one year plunge would be in a submarine! WOW,,,,talk about sales prices falling off a cliff and going under....Attention everyone on board....Attention....Attention....Prepare to SUBMERGE......hold your breath and pinch your nose closed!......the price average has gone down a whopper 27-percent in the last calender year.....omg ........... -27% !


-27%, -27%, -27%, -27%, -27%, -27%

[Long Pine]

What this says to me.

The selling price of the average waterfront home went from $1,314,639 to 960,961 when comparing 2008 to 2009. That is a drop of 353,678, which is 27-percent.

So, it just seems to me that the only way the waterfront could have taken a faster one year plunge would be in a submarine! WOW,,,,talk about sales prices falling off a cliff and going under....Attention everyone on board....Attention....Attention....Prepare to SUBMERGE......hold your breath and pinch your nose closed!......the price average has gone down a whopper 27-percent in the last calender year.....omg ........... -27% !

I just wanted to point out that you should not necessarily infer from this that the average value of a lakefront home on Winnipesaukee has dropped 27%. It just says that the average price of the homes that sold in 2009 was 27% less than the average price of the homes that sold in 2008. It could be that the multi-million dollar homes that would have moved the average up just did not change hands in 2009, or that the people that needed to sell their homes for economic reasons were more in the $1 mil price range than the $2-5 mil price range. Lots of room for interpretation but just comparing the average price of the homes that actually sold from one year to the next can be misleading and is not necessarily representative of how the average market value of all the lakefront homes moved in the last year.

[Rattlesnake Guy]

In terms that you can appreciate.
Yesterday IBM sold for 120. Today MSFT sold for 28. Does that mean that stocks took a huge drop?

If comparable properties sold for 27% less this year than last year that would be a fair statement. The fact that less expensive transactions took place is not conclusive data. Does it mean that expensive properties did not sell or that expensive properties sold for a lot less?

[Pineedles]

I also have a correction to make. When you refer to the post above, some of us put the most recent posts on top rather than display them from oldest on top to newest lower. It makes it easier to go to the next thread or section, since you are already near or at the top.

[Mike M.]

Originally Posted by secondcurve

What do folks think about the real estate market? Is it time to trade-up? Do we have further to fall? It seems like activity has been incredibly slow this summer. Any input would be appreciated.

I think home prices have a long way to fall.

Unemployment is on the rise which is going to result in more home owners not being able to pay their mortgage. The additional foreclosed homes will result in lower home prices.

The only way we will see home prices start to increases before we get back to a more free market economy will be inflation. This does not mean that housing is once again a good investment; it will be the result of our money losing its buying power.

[fatlazyless]

"There are three kinds of lies; lies, damned lies, and statistics." unknown author, circa 1850


"The famous statement refers to the persuasive power of numbers, the use of statistics to bolster weak arguments, and the tendency of people to disparage statistics that do not support their position." Wikipedia

.....

You all have to agree that a 27-percent, one year drop in the waterfront average selling price based on 55 different sales between January 1 and September 30, 2009 is certainly a statistic to contemplate. Like, why-O-why did this happen?

Let me pitch out a grease ball of a reason here.......well,,,,shazam - a - ramarama ! .....you know that January 1, 2009 was the first day of the Winnipesaukee 45-25 speed limits....therefore....it is absolutely-positively-absolutely an undisputed fact this 27-percent price decrease is all about the nice folks with the big, expensive go-fast boats wanting to unload their waterfront homes and move away, somewhere to a new Lake Go-Fast. ....case closed!

[JupiterMackem]

If I'm not mistaken the 'three types of lies' quote comes from the British Prime Minister Benjamin Disraeli. It's a particular favorite of mine.

[VtSteve]

One of the reasons the Case-Shiller real estate index was so valuable during this tremendous real-estate bubble was that it sought to compare sales of the same property. It has proved far more reliable that the stats compiled based on median price, average selling price, etc..

Averaging a small sample of just over 50 sales is meaningless without the underlying data, and probably meaningless even then. If you had two properties that sold for $1.3 million in 2005 or 2006, and were sold for less than $1 million this year, that's pretty conclusive. Having properties that go from $200,000 to over a million means nothing, especially if a third or more of the properties are towards the high end.

I'll just guess that if anyone investigated some of the properties sold, which you can do if you have the address, you could find out what the previous buyer paid. Some realtors around here were trying to paint the impression that the real estate market was stable, and hadn't declined much. A simple search turned up a property bought in 2005 for $469,000, that is now listed at $379,000.

[Kerk]

I know the prices are down and have held off on selling but I feel that will change. I will be selling one way or another. Costs -Health etc. are helping decision - Life!!

[fatlazyless]

From today's www.citizen.com, the state DRA, Department of Revenue Administration, has certified the Gilford property tax rate at $17.37/1000 assessed value.

While the town's overall gross valuation has decreased in value by $29,655,710, which is a 1.9% drop, the new rate of 17.37 is an increase of 2.8%.

And just think about this: Gilford is an SB-2 town so the expensive new building construction decisions like a police station are decided on March town election day, private paper ballots with the polls open from 7am to 7pm as opposed to the town employee dominated, midnight, raise-your-hand votes, held at the March town meeting.

While the social security checks will not, for the first time ever, be going up this year, your individual Gilford property tax will be doing what?

So, here in the New Hampshire lakes region, are you better off owning or better off renting?

[BroadHopper]

Originally Posted by fatlazyless

So, here in the New Hampshire lakes region, are you better off owning or better off renting?

Better off camping out on the Walmart parking lot!

[Merrymeeting]

Originally Posted by BroadHopper

Better off camping out on the Walmart parking lot!

speaking of which... Les, will we see you on here www.peopleofwalmart.com

[fatlazyless]

Had the opportunity to go to a bank mortgage foreclosure auction of a one bed, 625 sq' condo, w/ obscured ski mountain view in a NH ski area today.
.....................

Just the facts:

Mortgage loan, 2005, for $85,000.

Currently assessed by town for 102,000.

Auction bids started at 20,000. and final bid topped out at 45,000.

The auctioneer then announces that the mortgage lender, a Massachusetts savings & loan, has a reserve minimum bid of $87,500.

The end....no sale.....no tranfer of property....nada.

One of the bidders, a local real estate broker, she said after the auction that the units' current selling price would most likely be in the 60's in today's market, and a couple-three units had sold for $120 - 125,000, back in 2007.

.............
How about that...I thought that was pretty interesting. So, what does the mortgage lender who continues to own the property do next? ....wait for the market to improve.....relist with a different auctioneer.....or lower the reserve minimum price ....or something........like what.....what.....what?

What happens next?

About ten other similar units in the same area are currently for sale, although not as foreclosures, with asking prices from $75-80,000. and have been listed for months and years.

[ITD]

Originally Posted by fatlazyless

....

Let me pitch out a grease ball of a reason here.......well,,,,shazam - a - ramarama ! .....you know that January 1, 2009 was the first day of the Winnipesaukee 45-25 speed limits....therefore....it is absolutely-positively-absolutely an undisputed fact this 27-percent price decrease is all about the nice folks with the big, expensive go-fast boats wanting to unload their waterfront homes and move away, somewhere to a new Lake Go-Fast. ....case closed!

I declare the science is settled, anyone who thinks not is a denier, good job Less.

[laketrout]

You would think the auction company would tell people right off the bat that there is a minimum reserve price so not to waste peoples time. Most likely the bank will put that condo at auction back into the MLS listings at a given price and typically in the notes you will see "subject to 3rd party approval". Which to me is a green light to low ball the asking price which might be up in the 80-100k range as you noted of the previous properties went for and or are listing for. Local or regional banks that are smaller tend to hold onto properties; hoping to recoup lost monies, larger national/federal banks tend to dump when they have so many properties to contend with.

[fatlazyless]

...the bank was the Scituate S & L...., and the auctioneer just breezed right through the auction procedure quickly.....reading from a written text and recording the entire verbal proceding as he and the qualified bidders went through the transaction...

The auctioneer speaks for about five minutes or less, introducing the auction and with regard that the sale is in "as is condition....and to be aware of any outstanding, unknown liens which are your responsibilty." Auctioneer makes a point of informing the room that collusion between bidders is illegal, and that any collusion will be prosecuted by the auction house to the full extent of the law.

Proceeding ahead, the auctioneer starts off by asking anyone want to bid 100k......80k.......60k....40k....20k....bidders looking around at one another.....and he got a starter bid at 20k.....in one minute or less....it goes up to 45k....and no one counters...so 45k is the high bid....and as I already mentioned...he then announces that the bank has a reserve minimum bid in at $87,500.

Could be the real estate broker, she was there to try to buy it low, or else get it as a listing, herself.

[Rag Top Daze]

Originally Posted by fatlazyless

...the bank was the Scituate S & L...., and the auctioneer just breezed right through the auction procedure quickly.....reading from a written text and recording the entire verbal proceding as he and the qualified bidders went through the transaction...

The auctioneer speaks for about five minutes or less, introducing the auction and with regard that the sale is in "as is condition....and to be aware of any outstanding, unknown liens which are your responsibilty." Auctioneer makes a point of informing the room that collusion between bidders is illegal, and that any collusion will be prosecuted by the auction house to the full extent of the law.

Proceeding ahead, the auctioneer starts off by asking anyone want to bid 100k......80k.......60k....40k....20k....bidders looking around at one another.....and he got a starter bid at 20k.....in one minute or less....it goes up to 45k....and no one counters...so 45k is the high bid....and as I already mentioned...he then announces that the bank has a reserve minimum bid in at $87,500.

Could be the real estate broker, she was there to try to buy it low, or else get it as a listing, herself.

Earlier this year we went to several auctions. We stopped going tho when we found out this was the way they all were going. It's a waste of time.

We have also found out that when you see a bank owned property listed at a reasonable price for today's market, it's just another game they are playing. When you go to look at it, you find out they are accepting multiple bids. A silent auction sort of plan. We refuse to play that game too.

I can't imagine why the banks are interested in holding onto these properties.

[jmen24]

Originally Posted by Rag Top Daze

Earlier this year we went to several auctions. We stopped going tho when we found out this was the way they all were going. It's a waste of time.

We have also found out that when you see a bank owned property listed at a reasonable price for today's market, it's just another game they are playing. When you go to look at it, you find out they are accepting multiple bids. A silent auction sort of plan. We refuse to play that game too.

I can't imagine why the banks are interested in holding onto these properties.

The reason they hold on to the properties is because it shows a Capital Loss on the books. A Capital Loss can be applied directly to the tax portion of a Capital Gain. It all has to do with liabilities. If they sell the house, great. If they do not sell the house, great. They make out in both situations, because they are holding or selling a house well below the money invested, its a loss either way and can be used to offset the Capital Gains Tax either way. That is how you can still show a profit even though you are holding a huge loss, not only are you lowering your tax burden, but that money then becomes profit along side the Capital Gain for the year or quarter.

SEE MY POST BELOW THIS INFORMATION IS ONLY PARTIALLY CORRECT

[neckdweller]

Originally Posted by jmen24

The reason they hold on to the properties is because it shows a Capital Loss on the books. A Capital Loss can be applied directly to the tax portion of a Capital Gain. It all has to do with liabilities. If they sell the house, great. If they do not sell the house, great. They make out in both situations, because they are holding or selling a house well below the money invested, its a loss either way and can be used to offset the Capital Gains Tax either way. That is how you can still show a profit even though you are holding a huge loss, not only are you lowering your tax burden, but that money then becomes profit along side the Capital Gain for the year or quarter.

How can the bank lock in a capital loss if they haven't sold yet? Isn't it similar to an individual - I have to sell a stock below what I paid to offset any capital gains. They may be able to book a reserve for bad debt expense equal to the difference between the mortgage note and the current market value of the property, but I don't see how they can record a capital loss.

I really don't know much about how the books work for banks so if you can further explain that would be great.

[jmen24]

You are correct, I did a quick check as you made me think, the sale has to be made in order to show the loss. The reason for holding a default mortgage is that they can stem the time to apply that loss on the books. That is the reason for not being in a big rush to off load these homes.

I guess I should elaborate a little bit. I made a quick call to a friend in the know to clear this up and that is where the response above came from (I am learning more everyday!).
The difference is really in how the bank is held, a large publicly held bank is not interested in taking a quick loss on an asset as it lowers their overall value in the market and you would not want to invest in a company that is taking a big loss, quarter after quarter.
A smaller privately held bank is more interested in reducing exposure to stay in business, and the loss helps them reduce the tax burden.

If you subscribe to the Registry Review you get a listing every week of the current foreclosure auctions scheduled, you also get the name of the person that defaulted as well as the name of the bank that is holding the note. The auctions held by small local banks are more likely to yield a better deal than the ones held by larger banks, but this is also leading small banks down a bad road, with little they can do about it.

But one thing to remember is that you are not going to get a property in a foreclosure auction for a huge discount if the property has any kind of potential value above what is owed. Most of the deep discount properties are complete headcases. We have looked at homes for clients in the last few months that they were looking to purchase through foreclosure, one still had the old school way of insulating the floor (newspaper laid in layers under a rug) because it did not have a single source of heat, other than a centrally located fireplace in the losest level (200 yr old home) or any insulation in the walls.

[neckdweller]

OK, that makes a lot more sense. Agreed on the point of not getting a huge bargain on any foreclosure properties. Banks aren't going to let a property go for much less than either the mortgage value or the market value - either way, it won't be a major deal for a third party buyer.

[Just Sold]

Originally Posted by jmen24

If you subscribe to the Registry Review you get a listing every week of the current foreclosure auctions scheduled, you also get the name of the person that defaulted as well as the name of the bank that is holding the note. The auctions held by small local banks are more likely to yield a better deal than the ones held by larger banks, but this is also leading small banks down a bad road, with little they can do about it.

But one thing to remember is that you are not going to get a property in a foreclosure auction for a huge discount if the property has any kind of potential value above what is owed. Most of the deep discount properties are complete headcases. We have looked at homes for clients in the last few months that they were looking to purchase through foreclosure, one still had the old school way of insulating the floor (newspaper laid in layers under a rug) because it did not have a single source of heat, other than a centrally located fireplace in the losest level (200 yr old home) or any insulation in the walls.

Great explination but remember the foreclosing bank is not going to let it sell at auction for less than they are owed. I have been to quite a few house auctions and that is what always happens. Auctions are also "buyer beware" as they warrant nothing including if taxes have been paid or if the property is vacant. If still occupied it is the buyer's responsibility to get the occupants out.

I am looking to go to another auction in Jan. The ex's 3800 sq. ft 2 year old home - oh boy!

[Just Sold]

Condo with dock Foreclose - at The Weirs. The Courtyard on Paugus Bay. Looks like a nice place 11/9 at 9:00AM
http://www.jsjauctions.com/details.asp?id=5626

[birchhaven]

why are those units seasonal? I heard the water lines are not deep enough, is that true?

[TomC]

...but sometimes units are "seasonal" becasuse the city/town says so. When the developement is approved, it is with the stipulation that it is classified as seasonal so people can't live there full-time and burden the schools. It may be that the reason for the seasonal classification has nothing at all to do with the buildings or utilities.

This is quite common with converted cottage colonies, hotels, campgrounds, etc. I know this situation is the case with the Arcadia Campground in Moultonboro.

Again, I do not know if this is the case in this situation, but it might be the reason.

[SIKSUKR]

Tom is right on.I have friends on Paugus Bay that had a 10 unit rebuilt and the seasonal stipulation applied to that building for the reasons he listed.

[birchhaven]

that is too bad, I like those units. Seems kinda strange, in this case you would think the town would look at these units and figure they will have seasonal owners, just because of what they are. So they would let them be sold/approved as year round units to get the higher taxes, since chances are no one will live there year round any how.

[Pineedles]

So am I understanding this correctly that if the home is not suited for year round living, as in no centralized heat, no insulation, and no one lives there other than the "warmer months", a tax break is in order? How much percentage wise?

[birchhaven]

I kinda thought this went with out saying, if a house can only be used seasonally, it will not fetch as high a price in the open market as the same house that is year round, so the assessment will be lower= lower taxes. I am sure the house could have and would have been built for year round use if they had been approved for it. I didn't want to get into a taxes debate, I was just disappointed because I like those units and probably would have been in the market for one.

[Pineedles]

So it is a lower assessment that the home receives. That makes sense. Thanks.

[Irish mist]

I never "got" why those ten units, once rebuilt, still remained seasonal ? They look year-round to my eye.

[SIKSUKR]

Originally Posted by Irish mist

I never "got" why those ten units, once rebuilt, still remained seasonal ? They look year-round to my eye.

If your refering to the condos I posted about, they are definately built to up to date standards and are more "year-round" than most structures in that area. That was the stipulation before recieving the building permit I believe.

[fatlazyless]

Every Friday the www.laconiadailysun.com runs a local real estate column written by local Realtor Roy Sanborn. Yesterday's Friday the 13th column was the best: All about the whys of why local home prices are continuing to fall. An unusually well written, thoughtfull, and lengthy article. WAY-TO-GO ROY!.....you the man!....keep on cranking em out, Buddy!

Someone out there in cyberspace....post a working link....it was on page 14. My 'puter skills are lacking.....am still using a web-tv!

[Greenbean]

All property (real or personal) is sold at Auction with reserve in the State of New Hampshire unless specifically advertised otherwise. If you want to go to a true auction where the high bidder takes the property then make sure it is marketed as an ABSOLUTE AUCTION. Only then can you know there is no one bidding on behalf of the seller.

It taks $20,000 to $30,000+ on average to foreclose on a home which is why Banks quite often buy the property back at auction - it saves time, notices, liens, past utilities, eviction proceedings, etc. that the bank might get stuck with. The cleaner less expensive the foreclosure the easier for the bank. They don't want to loose money so they buy the house back in at whatever they have invested in it. The more the seller has paid, the lower the price the bank has to pay to get it back.

[fatlazyless]

Noticed today a 'pending' sign hanging from the 'for sale' sign at the large wf lot with the storybook fence. It is just across Meredith Bay from the town docks so the new residents can row across the bay and walk to Georges Dinner.

What a location.....9.47 acres....assessed $3,802,100. ........a nice little boathouse.....and the fence....asking price of $4,950,000. Selling price is....a secret!

And, the new owner gets to build the house of their choice. Unless it was purchased for non-residential use like a school or religious retreat. Anything is possible with 9 1/2 acres.....right??? How about an airport for ultralites?

Will that be cash or a mortgage?

[SIKSUKR]

This is going to be the new Meredith Walmart! It's good thing they just bought that new fire truck to protect your favorite store. Word is it will even have frequent user discount dental service.

[birchhaven]

There is going to be a new Walmart in Meredith? Or am I reading that wrong? If so is it in the PB right now? Where is it going?

[fatlazyless]

Hopefully, the new owner will put up a gigundic medieval stone castle complete with a couple castle towers. That was the original plan about ten years ago and it never was started.

Believe the old owner was involved with sponsoring the 1990's go-fast motorboat races.

The boat house and fence are not your everyday construction, to say the least. Maybe a newly built house will be a similar design.

9 1/2 acres: Maybe 800'wf - just outside the Meredith no wake zone- on a point-facing west; address: 50-60 Wagon Wheel Trail, a very big & sunny, open double lot.

To build a fence like that would cost some...

And the sale price is....?

Most likely, a new residential house will go up, after tearing down the 50 year old ranch.....but one never knows......?

Could be a good spot for the new home to "DUI Rehab, Inc.".....a non-profit and tax exempt org? A place where rock stars fly in and get a month to get away before returning home, all dried out.... or something?

[Acres per Second]

Some with $3M+ bucks may be reading the same financial "tea-leaves" that I am.

(Chicken-entrail readings are beyond my job-description).

Now is an especially important time to invest in land—not in a boat of any kind. In following my own advice regarding "land", I'm fully-vested in land.

(Or "broke" as FLL might say).

[SIKSUKR]

Originally Posted by birchhaven

There is going to be a new Walmart in Meredith? Or am I reading that wrong? If so is it in the PB right now? Where is it going?

Sorry BH, that was a joke for longer time members as FLL is all about Wally world, dental coverage, and no new fire truck.