Real Estate Slump

Paugus Bay Resident · 11-06-2006, 11:21 AM

onthebay, I think in your case, its simply a matter of supply. A quick check in MLS showed 25 condos (in Laconia) in the $200 - $225K price range. Overall, Belknap county sales for this year are off 15 - 20% from last year. To keep things in perspective however, last year was a very good year.

KonaChick · 11-06-2006, 02:38 PM

I guess it depends on where you live on lake and what type of property you are looking to buy/sell...but I don't see any real estate slow down in our neck of the woods (Kona area). I would say the turnover in the immediate coves that surround us has been about 35% over the past 6 years with nothing from tear downs to McMansions staying on the market for more than a few months. The only thing I have noticed is that prices are slightly lower than they were during the internet bubble. We have a certain real estate agent who is always bugging us to list with him...saying he has many clients who specifically want the Kona area and will not buy anywhere else on lake. This could be a sales ploy though to get you to list with him. Anyway I just don't see it in our area of the lake. Have a good one

TomC · 11-06-2006, 07:22 PM

There is a certain theory in the market that baby boomers, as they retire, will continue to drive demand for properties in "recreational" areas, ie along golf courses, bodies of water, ski areas, etc. They have the money and the idea is that they will dispose of their conventional suburban residences and acquire resort properties, thus supporting the prices of this more rare type of property. If this is indeed the case we may not see much erosion of lakefront properties as this is obviously in shorter supply than a generic house in a generic neighborhood...

what do you think?

Resident 2B · 11-06-2006, 08:34 PM

Tom C,

Sounds good to me.

I believe there is some reality to what you have proposed. However, on the flip side, when economies go down, the second home is one of the first things to go.

If the economy stays strong, I believe the baby boomers will have some positive impact on real estate prices in the region in the next five or more years.

It is also believed that these boomers will be looking for warmer climates, but not hot climates. We lose on that variable.

It is all one big balancing act between so many factors. I do not think it will be as bad as the last drawback, but time will tell. Long-term, lakes region property should be a good place to put your money, as long as you can cover most of the purchase cost without going to the bank. If you have a 80% mortgage at 6% interest and you are also paying high property taxes, the property would have to go up 10% each year for you to make anything. The high property taxes are a negative factor in the market when you try to sell.

That said, there are very few, if any, more beatiful places on the planet than the area around our lake. That is why we bought here and intend to stay here.

Good luck!

R2B

onthebay · 11-06-2006, 09:38 PM

I guess it all depends on timing. If we had been able to build the new house last winter instead of this spring we would have been ready to sell the condo when things were still moving. The idea was to move everything over when the house was finished and then sell the condo.
It looks like we will try to rent it out for a year or so and see where the markets goes.
On the bright side by renting it will then become eligible for a 1031 exchange when its time to buy the condo down south.

11-06-2006, 07:22 PM	#3
TomC Senior Member Join Date: Apr 2004 Location: Lakes Region Posts: 679 Thanks: 21 Thanked 93 Times in 62 Posts	Boomer's driving demand? There is a certain theory in the market that baby boomers, as they retire, will continue to drive demand for properties in "recreational" areas, ie along golf courses, bodies of water, ski areas, etc. They have the money and the idea is that they will dispose of their conventional suburban residences and acquire resort properties, thus supporting the prices of this more rare type of property. If this is indeed the case we may not see much erosion of lakefront properties as this is obviously in shorter supply than a generic house in a generic neighborhood... what do you think?

11-06-2006, 08:34 PM	#4
Resident 2B Senior Member Join Date: Apr 2004 Location: North Shore, MA Posts: 1,357 Thanks: 994 Thanked 313 Times in 163 Posts	Baby Boomers Tom C, Sounds good to me. I believe there is some reality to what you have proposed. However, on the flip side, when economies go down, the second home is one of the first things to go. If the economy stays strong, I believe the baby boomers will have some positive impact on real estate prices in the region in the next five or more years. It is also believed that these boomers will be looking for warmer climates, but not hot climates. We lose on that variable. It is all one big balancing act between so many factors. I do not think it will be as bad as the last drawback, but time will tell. Long-term, lakes region property should be a good place to put your money, as long as you can cover most of the purchase cost without going to the bank. If you have a 80% mortgage at 6% interest and you are also paying high property taxes, the property would have to go up 10% each year for you to make anything. The high property taxes are a negative factor in the market when you try to sell. That said, there are very few, if any, more beatiful places on the planet than the area around our lake. That is why we bought here and intend to stay here. Good luck! R2B

11-06-2006, 09:38 PM	#5
onthebay Senior Member Join Date: Sep 2005 Posts: 114 Thanks: 0 Thanked 3 Times in 2 Posts	Timing I guess it all depends on timing. If we had been able to build the new house last winter instead of this spring we would have been ready to sell the condo when things were still moving. The idea was to move everything over when the house was finished and then sell the condo. It looks like we will try to rent it out for a year or so and see where the markets goes. On the bright side by renting it will then become eligible for a 1031 exchange when its time to buy the condo down south.

11-06-2006, 11:21 AM	#1
Paugus Bay Resident Senior Member Join Date: Sep 2003 Location: Gilmanton, NH Posts: 754 Thanks: 136 Thanked 93 Times in 51 Posts	onthebay, I think in your case, its simply a matter of supply. A quick check in MLS showed 25 condos (in Laconia) in the $200 - $225K price range. Overall, Belknap county sales for this year are off 15 - 20% from last year. To keep things in perspective however, last year was a very good year.

11-06-2006, 02:38 PM	#2
KonaChick Senior Member Join Date: Apr 2004 Posts: 518 Thanks: 19 Thanked 62 Times in 15 Posts	I guess it depends on where you live on lake and what type of property you are looking to buy/sell...but I don't see any real estate slow down in our neck of the woods (Kona area). I would say the turnover in the immediate coves that surround us has been about 35% over the past 6 years with nothing from tear downs to McMansions staying on the market for more than a few months. The only thing I have noticed is that prices are slightly lower than they were during the internet bubble. We have a certain real estate agent who is always bugging us to list with him...saying he has many clients who specifically want the Kona area and will not buy anywhere else on lake. This could be a sales ploy though to get you to list with him. Anyway I just don't see it in our area of the lake. Have a good one