Realtor's Say it Is A Buyer's Market

[Just Sold]

From the Union Leader today:
Home » News » Business
October 14. 2012 6:21PM
Realtors: It's a buyer's market in Lakes Region

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By PAULA TRACY
New Hampshire Union Leader

This three-bedroom Gilford home, listed by Roche Realty Group Inc. for $1,295,000, features one of the largest boat houses on Lake Winnipesaukee and has 170 feet of shore-front. (COURTESY)

LACONIA — With the median price for a house on Lake Winnipesaukee at $1.2 million and going for about $200,000 less than this time last year, it is a buyer's market out there with choices, choices, choices.

Russ Thibeault of Applied Economic Research in Laconia said in 40 years, he has never seen a better time to buy in the region.

Frank Roche of Roche Realty Group of Meredith and Laconia said he has been practicing 36 years, and this is one of the top two times to buy. The last was 1991.

He recalls in 1980 and 1981 when he was quoting interest rates at 17 and 18 percent “and that was adjustable. You couldn't get a fixed rate. ... Today you have 40-year record low interest rates below at about 3.6 percent, and price reductions from 20 to 30 percent ... even more if it is a short sale,” he said.

“Add to that, we have the best inventory of 1,340 listings in the Lakes Region, and that represents an opportunity for savvy buyers. There are a lot of anxious sellers, too,” Roche said.

On Lake Winnipesaukee, there are 245 houses on the market.

Sales off the lake have picked up across the region, with a 16- to 18-month inventory, but the market that has traditionally done the best, lakefront, now has a five-year inventory on the market.

Thibeault said 129 houses have sold on the big lake in the last year, with a median selling price of $900,000. Last year, that figure was $1.1 million.

“Housing is affordable, but it's not moving,” Thibeault said.

“It's cheaper to own than rent, but it's hard to qualify. A person buying a $200,000 home, which is the average price in New Hampshire, has to have $40,000 to plunk down, and few do have that right now,” he said. “If you can qualify, it's great.”

“For sellers, things have stabilized” in terms of price reductions, but Thibeault said he has not seen market trends increasing in price yet.

There are now 60 homes on the big lake on the market for more than $2 million and 13 sales of more than $2 million in the last year, Thibeault said.

The sale price for lakefront ranges from $160,000 to $10 million on Governor's Island.

Thibeault said many buyers, even if they can meet the terms for a mortgage, lack confidence in the economy.

Roche said where he is seeing the market moving toward is baby boomers who are thinking about retirement and are selling homes in the South and moving to places for recreation and cultural opportunities.

“Water access is selling, too,” he said. “You can get a house with water access in the $125,000 price range and buy condos for $80,000.”

Roche agreed with Thibeault that the market overall seems to be getting better.

And Mitt Romney had an impact on Wolfeboro this summer, Roche said, because of the publicity as the sometime-home of the Republican presidential nominee.

“We've had calls as a result,” he said of what he called the “Romney factor.”

ptracy@unionleader.com

[fatlazyless]

In my neighborhood.....68 Cattle Landing Rd, Meredith NH 03253 sold for $712,500 on Dec 16, 2011, after having a for sale sign out front for maybe 18-months.

Directly next door at 70 Cattle Landing Rd, there's been a for sale realty listing sign out front for maybe two years or something......would be interesting to take a look at the asking price history of these two homes, 68 & 70 Cattle Landing Rd, one got sold, and the other is still for sale.....just for drills.....to get a small peek into the local real estate market?


Just up the street at 22 Cattle Landing Rd......no for sale sign out front but still for sale as far as I know......has been up for sale since 2006 when it was built as a speculative for sale house.....as far as I know.....with no buyer? Anyone know what's that latest with this great big, huge, expensive, supercalifragilisticexpialidocious waterfront home......22 Cattle Landing Rd, Meredith NH 03253?

[webmaster]

Roy Sanborn regularly posts interesting information about the local real estate market in our blogs:

http://www.winnipesaukee.com/forums/blog.php?u=12870

[songkrai]

It's a fickle market for lake front RE.

One just sold on Black Cat Island for over $3,000,000. Nice home with built in movie theater. Small lot but beautiful home with great landscapping.

Some state that for the real expensive ones the "Adirondack" style is the "in" presently. For new or nearly new ones anyway.

[BroadHopper]

Thibeault says it is a buyer's market yet Sanborn a while back says otherwise.


I do know that many condo units end up leased when they don't sell. My development a decade ago did not allow leasing of properties. Now a good share are leased and the association will not take a stand after a couple of foreclosures left the association absorbing the back payments of dues.


The downward spiral of unit prices have slowed down but have not hit bottom.


I am looking to sell but at a big lost. I am also looking at another association, where one unit was sold two years ago for $190K. A similar unit is on the market today for @224K. Is the owner dreaming? Or he has a realtor that sucks him in with a dream?


My family sold the lakefront property in 1998 for $300K, The new owner ‘flipped’ the property around 2005 for $1.3M. The property was foreclosed in 2008 and the bank received $700K. Then the property was sold for $500K in 2010. The current owner tore down the 1892 fishing camp that was once the brakeman’s house for the old Lake Shore Railroad. I was told the new structure price was about $400K. Will the current owner get his investment back? Or will he take a bath? I was told he is in the business of ‘flipping’ properties.

[fatlazyless]

Originally Posted by BroadHopper

Thibeault says it is a buyer's market yet Sanborn a while back says otherwise.

I can recall reading via google an article in the Laconia Evening Citizen from the early 1970's where Russ Thibeault said the recent urban renewal demolition-reconstruction of downtown Laconia would soon turn downtown Laconia into a vibrant commercial area so who really knows when the real estate market values will bottom out?

[Winnisquamguy]

Originally Posted by fatlazyless

Just up the street at 22 Cattle Landing Rd......no for sale sign out front but still for sale as far as I know......has been up for sale since 2006 when it was built as a speculative for sale house.....as far as I know.....with no buyer? Anyone know what's that latest with this great big, huge, expensive, supercalifragilisticexpialidocious waterfront home......22 Cattle Landing Rd, Meredith NH 03253?

From Roy Sanborn's article...........

The highest sale on the lake in September was at 22 Cattle Landing Road in Meredith. The sale of this property was another long ordeal as it was listed prior to construction back in June of 2006 at $2.995 million with construction to be completed in 2007. The price escalated to $4.25 million in June of 2008, then was reduced to $3.2, to $2.895 in 2010, and finally down to $2.695 million this year. Anyway, this exquisite 6,000 square foot Adirondack has all the features one would expect in a Winnipesaukee waterfront estate home including Brazilian Cherry hardwood floors, a great room with cathedral ceilings and floor to ceiling fireplace, lots of glass, six bedrooms including a sumptuous master suite with its own private deck, the requisite gourmet kitchen with all the goodies, a home theater, and an attached, three car, heated garage for the toys. The home sits on a .72 acre peninsula lot with 328' of frontage, amazing landscaping, beautiful patios and walkways, a perched beach, and, of course, a dock. The home also has 50% interest in another 8.5 acre lot to provide additional privacy. So, this home was marketed for 1,450 days with the sale coming in at $2.2 million. The assessed value by the Town of Meredith is at $2.577 million.

[fatlazyless]

Originally Posted by Winnisquamguy

From Roy Sanborn's article...........

One important item that is not mentioned in Roy Sanborn's article here and probably would be a concern to a prospective buyer is that the actual distance between the house at #22, and a very, very similar house at #24 is they are situated indeed very, very close, to one another, like maybe just 20' distance between the end wall of the garage area on one, and the end wall of the kitchen area on the other, or something like that. If my memory is correct, these two residential waterfront structures at 22, and 24 Cattle Landing are considered to be condominiums by the town.....some more informed input on this would be appreciated.....thankyou & goodknight!

[Rattlesnake Gal]

Is there a way to see how close the selling prices are to the assessed values? Do the tap usually match?

[Grant]

Our place went on the market in April, and papers were traded last week. There was no shortage of people parading through from April through September. A few offers along the way and, ultimately, the buyer got a steal. Lots of waterfront signs up this year. More to come, I'm sure, with the taxes at current rates (which certainly won't come down).

[secondcurve]

Originally Posted by Grant

Our place went on the market in April, and papers were traded last week. There was no shortage of people parading through from April through September. A few offers along the way and, ultimately, the buyer got a steal. Lots of waterfront signs up this year. More to come, I'm sure, with the taxes at current rates (which certainly won't come down).

Congratulations on the sale. Hopefully, you are buying another property in the area!!

[BroadHopper]

Assessed values for taxes is a pick a number out of the air proposition. As a financial analyst I still find it confusing how they got that number. For instance the assessed value for taxes of three properties that I owned remain at the price I paid for the properties. They are in three seperate towns, all in NH. All bought in the early to mid 2000. When they reevaluate the properties, the numbers don't make sense nor are they close to appraised market value of the properties. We can thank the goons in Concord for this one!

Appraisals for insurance or market values depends on who does the appraisal and what data base that they use. With today's falling prices it is usually on the optimistic side.

[AC2717]

One thing to note here is an insurance value is a rebuild/repair value
not market value

[ishoot308]

"Assessed" values are strictly used for tax purposes. Every town is different in how they assess and then tax on that assessment. The town of Gilford assessed value are way below market value.

[Woodsy]

Property tax in NH is based on the towns collecting taxes at whatever the property's full cash value is. That being said I think a tolerance of +/-5% applies. See the RSA below!


RSA 75:1 How Appraised. Except with respect to open space land appraised pursuant to RSA 79-A:5 (current use) and residence appraised pursuant to RSA 75:11 (in commercial zone), the selectmen shall appraise all taxable property at its full and true value in money as they would appraise the same in payment of a just debt due from a solvent debtor, and shall receive and consider all evidence that may be submitted to them relative to the value of the property, the value of which cannot be determined by personal examination.

There was a HUGE push by the lawmakers in Concord a few years ago when they realized the property tax revenue was not keeping track with what properties were actually selling for. Add in a budget deficit and well, you get the picture!

I think most of the online appraisals you see (Vision Appraisals etc) are pretty accurate within the tolerance above.

Woodsy

[ishoot308]

I couldn't agree more with everything stated in the article! It definitely is a buyers market right now in the lakes region.

My wife and I have been watching closely for the past couple years and right now we are seeing some beautiful real estate sell for 30% or more less than just a couple years ago. Many homes that are for sale are second homes and the economy simply does not justify or allow the cost of owning a second home for many. Owners are cutting their losses and moving on, bad for the owners but good for buyers.

If your trying to sell a home...well, lets just say take a loss or be patient until the market rebounds. I do personally feel the market has bottomed out and depending on what happens in the upcoming election will begin to turn around.

Dan

[ITD]

Originally Posted by ishoot308

........ I do personally feel the market has bottomed out and depending on what happens in the upcoming election will begin to turn around.

Dan

I agree, if a majority votes right, things will snap back quickly. If not, more gloom and doom....

[wifi]

It may be a buyers market, I have a P&S for a retreat at a great price, but try to get a bank loan, its not easy, no matter how high your credit rating or how much the property is worth put up for collateral.

[Lakesrider]

Wifi, I read through the while post intending to post that exact some thing. We had lots of folks look at our condo down in Nashua while it was for sale. No buyers. The realtors told us none of them could get a loan....Banks are still holed up and very nervous about lending even though they got gazabillions from the Gov't.

[MAXUM]

Originally Posted by Lakesrider

Wifi, I read through the while post intending to post that exact some thing. We had lots of folks look at our condo down in Nashua while it was for sale. No buyers. The realtors told us none of them cold get a lone....Banks are still holed up and very nervous about lending even though they got gazabillions from the Gov't.

Not entirely true. Banks will lend. Heck I had no trouble at all getting a mortgage on the place that I bought this year. However the fundamentals are simple - good debt to income ratio, 20% cash down, and decent assets above and beyond the down payment. Sadly many spend as much as they make, save little if at all and are carrying significant debt. Yes unlike in the recent past, these individuals are now being passed by as to risky and rightly so. Even if a bank gets 'gazabillions' from the Gov't, making a loan that is likely to default doesn't do anyone one any good.

[wifi]

Originally Posted by MAXUM

Not entirely true. Banks will lend. Heck I had no trouble at all getting a mortgage on the place that I bought this year. However the fundamentals are simple - good debt to income ratio, 20% cash down, and decent assets above and beyond the down payment. Sadly many spend as much as they make, save little if at all and are carrying significant debt. Yes unlike in the recent past, these individuals are now being passed by as to risky and rightly so. Even if a bank gets 'gazabillions' from the Gov't, making a loan that is likely to default doesn't do anyone one any good.

I respectfully disagree with your disagreement I have no debt outside of a mortgage, pay credit cards off each month, about 25% debt (which is only the mortgage) to income ratio, 60% down payment, no defaults or bankruptcies. This is all a current and ongoing event for me, maybe you slipped in under the wire earlier this year, congratulations on your new place

[codeman671]

Originally Posted by wifi

I respectfully disagree with your disagreement I have no debt outside of a mortgage, pay credit cards off each month, about 25% debt (which is only the mortgage) to income ratio, 60% down payment, no defaults or bankruptcies. This is all a current and ongoing event for me, maybe you slipped in under the wire earlier this year, congratulations on your new place

I agree with Maxum, not sure why you are having issues with numbers like that. What bank? Credit score ok? Did the second mortgage put your ratios too high? Is there something funky about the property or is it not appraising out at a value that makes sense? With 60% down it seems like a slam dunk.

We recently went for an approval to buy a 3rd house and got it, even though it put our ratios over 50%. We are in the process of selling the other two, so it would have been a short term situation, but chose against it anyhow. I don't know of anyone that has gone to get a mortgage that has been denied. Granted the banks aren't as lenient as they once were but as long as someone has decent credit, can afford it, and the value is there it should not be an issue.

[Rusty]

Originally Posted by wifi

I respectfully disagree with your disagreement I have no debt outside of a mortgage, pay credit cards off each month, about 25% debt (which is only the mortgage) to income ratio, 60% down payment, no defaults or bankruptcies. This is all a current and ongoing event for me, maybe you slipped in under the wire earlier this year, congratulations on your new place

You left one thing out and that is your income.

Are you trying to buy a house that doesn't fall within your income range even though you put 60% down? Does it put your debt to income ratio over 35%?

[jazzman]

We found that island properties didn't meet fanniemae/freddiemac lending guidelines even with nearly 50% down. Not sure if this extended to all seasonal places or if it was a no public road thing. Banks were of course happy to do private portfolio loans at 5+% fixed for 30 years.

We eventually found Franklin Savings Bank had a special agreement with fanniemae that let our loan go through.

Then you find out that everything on the lakefront is considered a flood zone these days...

Then you find out that most insurance companies don't do houses on piers...

Then you find out that the bank appraisal system is pretty random on island properties.

Lots of hurdles... These have to be taking some number of potential buyers off the books.

[MAXUM]

Originally Posted by jazzman

We found that island properties didn't meet fanniemae/freddiemac lending guidelines even with nearly 50% down. Not sure if this extended to all seasonal places or if it was a no public road thing. Banks were of course happy to do private portfolio loans at 5+% fixed for 30 years.

We eventually found Franklin Savings Bank had a special agreement with fanniemae that let our loan go through.

Then you find out that everything on the lakefront is considered a flood zone these days...

Then you find out that most insurance companies don't do houses on piers...

Then you find out that the bank appraisal system is pretty random on island properties.

Lots of hurdles... These have to be taking some number of potential buyers off the books.

Hit the nail on the head...

If the property doesn't meet fanny/freddy guidelines, it's a property that is only going to move to a cash buyer, or you're stuck having to screw with a construction loan to get the property to those standards and flip to a conventional loan. Can you say headache of epic proportions?

Insurance companies don't particularly care for seasonal properties period, even if they are on a full foundation. Not an impossible hurdle to overcome, just takes lots of explanation.

The appraisals are another killer since there is so much variation in water front never mind island property. It's not like most places are cookie cutter subdivisions, with lots of "like features", no you're stuck comparing apples and oranges which skew the comparable features to "like sold properties" and to much adjustment there raises red flags to the underwriters.

The key thing is to find the right lender that has the ability to deal with a little adversity. They are out there, stick with a local bank and you may find things are much easier than you have experienced thus far.

[wifi]

30% debt to income ratio. Local bank. I haven't gotten the appraisal report back yet, perhaps she got up on the wrong side of the bed that day. I've always thought the value of a house or land is what someone is willing to pay for it otherwise, its really subjective.

[secondcurve]

Originally Posted by wifi

30% debt to income ratio. Local bank. I haven't gotten the appraisal report back yet, perhaps she got up on the wrong side of the bed that day. I've always thought the value of a house or land is what someone is willing to pay for it otherwise, its really subjective.

It's not the Banks!!! It is the government. Please read the papers. The government started the housing crises by keeping rates artificially low and mandating that every stiff who could fog a mirror should own a home. Now the government is suing the banks for having made those loans even though the banks provide the lubrication for the economy to do well. Were there bad bankers, appraisers, borrowers, etc.? Yes. However, the banks took 95% of the blame. Put yourself in the banks' shoes. If you make a loan and fail to meet government guidelines you will be sued. Your President will condemn you for trying to screw the little guy, etc. etc. Fear not, this problem can be fixed and all of you, especially those residing in NH, will have the opportunity to do so next month.

[Diver Vince]

Originally Posted by secondcurve

It's not the Banks!!! It is the government. Please read the papers. The government started the housing crises by keeping rates artificially low and mandating that every stiff who could fog a mirror should own a home. Now the government is suing the banks for having made those loans even though the banks provide the lubrication for the economy to do well. Were there bad bankers, appraisers, borrowers, etc.? Yes. However, the banks took 95% of the blame. Put yourself in the banks' shoes. If you make a loan and fail to meet government guidelines you will be sued. Your President will condemn you for trying to screw the little guy, etc. etc. Fear not, this problem can be fixed and all of you, especially those residing in NH, will have the opportunity to do so next month.

Exactly correct! The government started this entire debacle with red line zones which forced the banks to make loans to those with inadequate financial solvency under the guise of "fairness". Now they blame the banks, the insurance companies and everyone but themselves. And to boot, the taxpayers have to foot the bill. Excuse me, but some of these folks in Washington think they are so bloody smart. They can fool some of the people some of the time, but certainly not all.

[tis]

Insurance is tough these days. Either your property is seasonal, or is a rental, is vacant, is too old, too new, has a wood stove, or is too expensive or in the wrong zone or something. If it wasn't for liability, I would self insure and forget them all!

I totally agree with you secondcurve.

[patman]

Originally Posted by secondcurve

It's not the Banks!!! It is the government. Please read the papers. The government started the housing crises by keeping rates artificially low and mandating that every stiff who could fog a mirror should own a home.

Originally Posted by Diver Vince

Exactly correct! The government started this entire debacle with red line zones which forced the banks to make loans to those with inadequate financial solvency under the guise of "fairness".

Nobody "forced" the banks to do anything. The combination of things being allowed (not mandated) and the banks' own greed was the problem. The wall-street geniuses that came up with bonds based on sub-prime mortgages that masked the true risk of those instruments created the demand. The banks saw $$ in closing costs and fees, and selling those mortgages to the bond managers, and supplied that demand. Immediate profit, no long-term risk. What's not to like? After all, the banks had no downside to protect, they had that FDIC safety net!

Sorry...wall street and bank greed is behind this one, not a nonexistent government mandate.

If you can stomach the truth, listen to this:

http://www.thisamericanlife.org/radi...-pool-of-money

Oh, and when you're itching to point fingers on this one...remember what administration was in office at the time. Hint: not the current one.

[tis]

That's wrong. Barney Frank and friends forced Fannie and Freddie to give out loans to almost anybody that could wait. They said everybody deserved to buy a home.

[patman]

Originally Posted by tis

That's wrong. Barney Frank and friends forced Fannie and Freddie to give out loans to almost anybody that could wait. They said everybody deserved to buy a home.

Forced or allowed? Big difference. Citation?

[SIKSUKR]

Absolutely forced. Read the bill.

[Billy Bob]

Originally Posted by patman

Forced or allowed? Big difference. Citation?

Actualy George Bush had a large say in increasing the percentage of homeowners to levels that were not sustanable . Lots of room to find fault .

Lax lending and low downpayments led to buyers with no skin in the game and when values went down they headed for the hills

[Rusty]

Originally Posted by wifi

30% debt to income ratio. Local bank. I haven't gotten the appraisal report back yet, perhaps she got up on the wrong side of the bed that day. I've always thought the value of a house or land is what someone is willing to pay for it otherwise, its really subjective.

So has your local bank actually turned you down for the loan or are they still reviewing the appraisal report and it could possibly be approved?

[BroadHopper]

One could get a bridge mortgage in the case you are buying a home when you have your present home on the market. When you sell the first home they will refinance. Today, it is not so. Either your current home is sold or no loan. This makes it harder for someone to move to a new location. Large corporations will reluctantly purchase a new home in a new location until you old home is sold. Then the corporation will sell you your home.

Bottom line is it takes money to move to a new location, something most of us do not have.

I had a chance to buy an inn a couple of years ago for 900K. Banks told me I need enough liquid assets to cover the commercial loan. The property never sold and today it is foreclosed for 600K. Now the bank has change the rules, too late, and I can afford the property. The property is no longer attractive as it has fell into disrepair. Go figure.

Banks loves to 'shoot themselves in the foot.'

[ishoot308]

Here's a perfect example of why it's a buyers market...

http://www.zillow.com/homedetails/76...92810734_zpid/

This house on Varney Point Rd. left was originally put on the market last year for 2.2 million. It finally sold and was closed on last Friday for 1.5 million!! Can you imagine what this house would have sold for in 2007!! It's not just houses in this price range either that are being drastically reduced, there are great deals to be had in all price ranges.

Dan

[fatlazyless]

Originally Posted by ishoot308

Here's a perfect example of why it's a buyers market...

http://www.zillow.com/homedetails/76...92810734_zpid/

This house on Varney Point Rd. left was originally put on the market last year for 2.2 million. It finally sold and was closed on last Friday for 1.5 million!! Can you imagine what this house would have sold for in 2007!! It's not just houses in this price range either that are being drastically reduced, there are great deals to be had in all price ranges.

Dan

The property taxes for this Varney Point waterfront single-family house for the last year shown, 2011, are $28,992/year to the Town of Gilford, or $2416/month.........wow......and I figured that I pay a lot....about $9000/year ......for my 55'wf and quarter acre with a 60-year old, moldy oldie, mongrel cottage in Meredith. That is a huge amount of money in taxes especially if it is to be a second home, and basically unoccupied from Labor day to Memorial Day.

[jazzman]

Could be worse... The tax rates in the "vacation" communities are about 1/2 of what the rest of the state pays. Of course the houses are worth more, but that's real $$$ you get to keep if you ever sell.

My prior lakehouse in Hillsboro NH was about 2.5% of it's value per year in taxes. Here, closer to 1.25%.

[MAXUM]

Originally Posted by wifi

30% debt to income ratio. Local bank. I haven't gotten the appraisal report back yet, perhaps she got up on the wrong side of the bed that day. I've always thought the value of a house or land is what someone is willing to pay for it otherwise, its really subjective.

What you are willing to pay and the appraised market value are two entirely different numbers.

The appraisal value is based on the actual sale price of "like properties" within a certain distance of the subject property. Price weighting is done to even the score between comparable properties. So if one has more SQFT than another the price difference is calculated as such as a line item on each comp listed as ether +/- X number of dollars. Banks could care less what you want to pay, they want to know what stuff is actually selling for. Trouble with this is if there is to much skew between "like properties" that raises all kinds of red flags and yes can kill a loan as quickly as bad credit.