Lakes Region Real Estate & Economic Impact

Just Sold · 07-31-2012, 12:33 PM

From NH Public Radio - I though this was very interesting.

Lakes Region Snapshot: High-End Vacation Homes Impact Year-Round Economy
JULY 30, 2012 | 12:29 PM
BYAMANDA LODER

The market for high-end lakefront properties has slowed down along Lake Winnipesaukee.
Tomorrow morning on NHPR, we’ll hear more from Joe Skiffington, a builder of high-end vacation homes in the Lakes Region. Joe’s story is Part Six of our series “Getting By, Getting Ahead,” examining how people across New Hampshire’s seven regions are navigating a recovering economy.

___

Driving through New Hampshire’s Lakes Region, it’s not uncommon to stumble onto networks of private roads. They lead to waterfront mansions — summer getaways for wealthy executives from places like Boston and New York. One of them, on Lake Winnipesaukee, belongs to Mitt Romney, the presumptive Republican nominee for president, whose family gathered here for an annual vacation earlier this month.
Wealthy tourists like the Romneys are crucial to the region’s economy, pumping much needed cash into local businesses for three months a year. For year-long residents, however, this dynamic creates high fiscal peaks and deep valleys. After the summer boom, restaurants don’t need as many waiters, there isn’t as much demand for household goods and construction projects slow down. For a New Hampshire region known nationally as a playground of the rich, the Lakes Region has the state’s second highest poverty rate — 6.5 percent — according to a StateImpact analysis of U.S. Census data.
Rich vacationers and year-rounders were affected differently by the housing bust, too.
THE BUBBLE THAT NEVER BURST
During the last decade, prices went up fast for housing at both the low and high ends of the market. “It certainly was a very heated market in the early [2000’s], wherein you’d see double-digit appreciation, properties would sell quickly, sometimes more than one buyer for the property, bidding prices up,” says Russ Thibeault, an economist with Applied Economic Research in Laconia.
“I remember standing on a dock in Wolfeboro, and somebody pointing out a house across the bay that sold for like $300,000,” Thibeault recalls. “And I said, ‘Oh, my God! That’s a lot.’ And they said, ‘No, no! It just resold 12 months later for $600,000.’ So things were just crazy for a period of time, and it’s hard to say where we all thought it would end, because it wasn’t ending.”
Prices on homes in the $300,000 range all the way up to multi-million dollar McMansions continued to climb, even through the beginning of the recession. A handful of builders were putting up speculative homes, buying the land and building high-end houses in the belief that they could unload them quickly and at a big profit. And right up through 2007 and into 2008, they did.
“Since then, I think that [it’s] not so much a bubble that burst, but things just totally flattened out,” Thibeault says. “Right now, we have about 95 units on Winnipesaukee alone that are priced over $1.5 million. And we had about 20 sales last year. But they haven’t really deteriorated in value as compared to the year-round housing market. Some properties have gone down in value a bit, but you don’t see an overall trend toward decline.”
Although their investments took a big hit during the recession, Thibeault notes that the people who own these high-end homes are generally in a financial position where they can hold out for prices closer to what they paid. That has helped keep the market relatively stable. In the case of New Hampshire’s year-round market, though, homeowners under severe financial strain simply had to cut their losses, which helped push prices downward.
SPECULATIVE BUILDING SLOWDOWN
Thibeault says right now, there’s a “break” in the Winnipesaukee seasonal home market, where vacation homes priced at less than $1.5 million are continuing to sell. Meanwhile, homes on the upper-most end of the market are “languishing.” Speculative home building has been down since 2008. The construction slowdown has affected the Lakes Region economy on a number of levels, says Thibeault, who sits on the board of the Bank of New Hampshire, which has financed a number of area spec home builders and developers.
“When you cut back on new construction, you cut back on a wide swath of this region’s economy because we’re very dependent on the construction industry. So you’re looking at furniture store sales that aren’t as great, a lot of service industry, painters, landscapers,” Thibeault says. “I had a friend who pretty much had a full-time job doing painting at one of these very large, affluent homes. He would work every spring and fall painting inside and outside the house. That’s not happening anymore. So it has a broad effect on the regional economy.”
There is some good news, however. A couple of home builders are dipping their toes back into the spec market this year. And Thibeault says that while the big money new-home starts aren’t as prevalent as they once were, wealthy tourists are investing in their existing vacation homes by ordering renovations.
“We were acclimated to really an unsustainable pace of price appreciation and construction on the lake. And both the price appreciation and the level of construction activity have subsided,” Thibeault says. “But it’s still not a disaster real estate market by a long shot. It’s still there, there’s still a lot of health in the market, although it’s not improving or moving as quickly as we were accustomed to.”

samosetguy · 07-31-2012, 01:07 PM

Someone once told me the house on the corner of Governor's (near the No Wake - sort of facing Stonedam) was the most expensive on the lake.

I noticed a For Sale sign on it this weekend (and the one to the left of it).

It is unfortunately a little out of my price range but snagging the two of them would be nice so you'd have a place for the in-laws.

webmaster · 07-31-2012, 01:11 PM

Interesting article. For anyone who's missed it, Roy Sanborn posts interesting analysis of the Lakes Region real estate market regularly in our blogs:

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

codeman671 · 07-31-2012, 01:54 PM

Quote:

Originally Posted by samosetguy

Someone once told me the house on the corner of Governor's (near the No Wake - sort of facing Stonedam) was the most expensive on the lake.

I noticed a For Sale sign on it this weekend (and the one to the left of it).

It is unfortunately a little out of my price range but snagging the two of them would be nice so you'd have a place for the in-laws.

It may be one of the most expensive on the market, but no where near the most expensive on the lake.

SIKSUKR · 07-31-2012, 02:15 PM

Would that be Marc Bourgeois' house?

NH_boater · 07-31-2012, 04:20 PM

Quote:

Originally Posted by codeman671

It may be one of the most expensive on the market, but no where near the most expensive on the lake.

Which ones are much more?

Puck · 08-01-2012, 06:25 AM

Castle NASCAR comes to mind....

tis · 08-01-2012, 06:26 AM

Quote:

Originally Posted by Puck

Castle NASCAR comes to mind....

But that's not for sale is it? Maybe Appe's? But I am not sure if that is even on the market yet.

secondcurve · 08-01-2012, 06:26 AM

Quote:

Originally Posted by webmaster

Interesting article. For anyone who's missed it, Roy Sanborn posts interesting analysis of the Lakes Region real estate market regularly in our blogs:

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

Ray is certainly a talented writer. I'm guessing he is a heck of a real estate agent as well.

codeman671 · 08-01-2012, 10:38 AM

Quote:

Originally Posted by tis

But that's not for sale is it? Maybe Appe's? But I am not sure if that is even on the market yet.

Correct, I mentioned that Marc's is probably the most expensive ON the market.

Appe's may be worth more, as is the McBoathouse Mansion in Wolfeboro on Umbrella Point. The boat house property was on the market as high as $12.8mil at one point.

The Nascar Palace is assessed at almost $12mil according to Vision, but probably worth a lot more in comparison. I didnt realize the Hannaford building was actually OWNED by him as well.

This older article highlights some of the more expensive lakes region properties. A few exceed $10mil.

http://new-hampshire-nh.com/2009/03/...new-hampshire/

tis · 08-01-2012, 11:59 AM

Quote:

Originally Posted by codeman671

Correct, I mentioned that Marc's is probably the most expensive ON the market.

Appe's may be worth more, as is the McBoathouse Mansion in Wolfeboro on Umbrella Point. The boat house property was on the market as high as $12.8mil at one point.

The Nascar Palace is assessed at almost $12mil according to Vision, but probably worth a lot more in comparison. I didnt realize the Hannaford building was actually OWNED by him as well.

This older article highlights some of the more expensive lakes region properties. A few exceed $10mil.

http://new-hampshire-nh.com/2009/03/...new-hampshire/

Yes, I saw you said ON the market.

Umbrella Point might have even been 13 at first. She is around 9 now I think. I heard Appe's is going for more than 12 million- I heard 13 and I heard 18 so guess we will wait and see.

fatlazyless · 08-01-2012, 12:37 PM

How's about the for sale listing for 22 Cattle Landing Rd, Meredith NH 03253?

Here's a brief, off the top of my head history. Until the autumn of 2006 it had been a totally wooded and undeveloped piece of a bigger lot when it was sub-divided off and a local waterfront builder put up a very large wf home for sale on a speculative basis. The asking price was aproximately $3,000,000 in 2006.

A very similar home was also constructed at 24 Cattle Landing which was sold in 2006, but 22 never-ever got sold, as far as I know.

Now, in August 2012, the 22-home has never been sold, is still owned by the builder, still for sale, and the asking price is now $2,600,000. Six years of holding an unsold house like that must be difficult.

fatlazyless · 08-01-2012, 07:03 PM

Down the road at 68 Cattle Landing Rd, a house on about a quarter acre wf sold after about 18 months. It was assessed for $946,400 and sold this spring for 712,500.

Across the water on Bear Island, at 63 Bear Island, which abutts the Camp Lawrence land; a one bathroom cottage was assessed for $252,700 and got sold for 73,000.

07-31-2012, 12:33 PM	#1
Just Sold Senior Member Join Date: Apr 2004 Location: Suncook, NH, but at The Lake at Heart Posts: 2,615 Thanks: 1,083 Thanked 434 Times in 210 Posts	Lakes Region Real Estate & Economic Impact From NH Public Radio - I though this was very interesting. Lakes Region Snapshot: High-End Vacation Homes Impact Year-Round Economy JULY 30, 2012 \| 12:29 PM BYAMANDA LODER The market for high-end lakefront properties has slowed down along Lake Winnipesaukee. Tomorrow morning on NHPR, we’ll hear more from Joe Skiffington, a builder of high-end vacation homes in the Lakes Region. Joe’s story is Part Six of our series “Getting By, Getting Ahead,” examining how people across New Hampshire’s seven regions are navigating a recovering economy. ___ Driving through New Hampshire’s Lakes Region, it’s not uncommon to stumble onto networks of private roads. They lead to waterfront mansions — summer getaways for wealthy executives from places like Boston and New York. One of them, on Lake Winnipesaukee, belongs to Mitt Romney, the presumptive Republican nominee for president, whose family gathered here for an annual vacation earlier this month. Wealthy tourists like the Romneys are crucial to the region’s economy, pumping much needed cash into local businesses for three months a year. For year-long residents, however, this dynamic creates high fiscal peaks and deep valleys. After the summer boom, restaurants don’t need as many waiters, there isn’t as much demand for household goods and construction projects slow down. For a New Hampshire region known nationally as a playground of the rich, the Lakes Region has the state’s second highest poverty rate — 6.5 percent — according to a StateImpact analysis of U.S. Census data. Rich vacationers and year-rounders were affected differently by the housing bust, too. THE BUBBLE THAT NEVER BURST During the last decade, prices went up fast for housing at both the low and high ends of the market. “It certainly was a very heated market in the early [2000’s], wherein you’d see double-digit appreciation, properties would sell quickly, sometimes more than one buyer for the property, bidding prices up,” says Russ Thibeault, an economist with Applied Economic Research in Laconia. “I remember standing on a dock in Wolfeboro, and somebody pointing out a house across the bay that sold for like $300,000,” Thibeault recalls. “And I said, ‘Oh, my God! That’s a lot.’ And they said, ‘No, no! It just resold 12 months later for $600,000.’ So things were just crazy for a period of time, and it’s hard to say where we all thought it would end, because it wasn’t ending.” Prices on homes in the $300,000 range all the way up to multi-million dollar McMansions continued to climb, even through the beginning of the recession. A handful of builders were putting up speculative homes, buying the land and building high-end houses in the belief that they could unload them quickly and at a big profit. And right up through 2007 and into 2008, they did. “Since then, I think that [it’s] not so much a bubble that burst, but things just totally flattened out,” Thibeault says. “Right now, we have about 95 units on Winnipesaukee alone that are priced over $1.5 million. And we had about 20 sales last year. But they haven’t really deteriorated in value as compared to the year-round housing market. Some properties have gone down in value a bit, but you don’t see an overall trend toward decline.” Although their investments took a big hit during the recession, Thibeault notes that the people who own these high-end homes are generally in a financial position where they can hold out for prices closer to what they paid. That has helped keep the market relatively stable. In the case of New Hampshire’s year-round market, though, homeowners under severe financial strain simply had to cut their losses, which helped push prices downward. SPECULATIVE BUILDING SLOWDOWN Thibeault says right now, there’s a “break” in the Winnipesaukee seasonal home market, where vacation homes priced at less than $1.5 million are continuing to sell. Meanwhile, homes on the upper-most end of the market are “languishing.” Speculative home building has been down since 2008. The construction slowdown has affected the Lakes Region economy on a number of levels, says Thibeault, who sits on the board of the Bank of New Hampshire, which has financed a number of area spec home builders and developers. “When you cut back on new construction, you cut back on a wide swath of this region’s economy because we’re very dependent on the construction industry. So you’re looking at furniture store sales that aren’t as great, a lot of service industry, painters, landscapers,” Thibeault says. “I had a friend who pretty much had a full-time job doing painting at one of these very large, affluent homes. He would work every spring and fall painting inside and outside the house. That’s not happening anymore. So it has a broad effect on the regional economy.” There is some good news, however. A couple of home builders are dipping their toes back into the spec market this year. And Thibeault says that while the big money new-home starts aren’t as prevalent as they once were, wealthy tourists are investing in their existing vacation homes by ordering renovations. “We were acclimated to really an unsustainable pace of price appreciation and construction on the lake. And both the price appreciation and the level of construction activity have subsided,” Thibeault says. “But it’s still not a disaster real estate market by a long shot. It’s still there, there’s still a lot of health in the market, although it’s not improving or moving as quickly as we were accustomed to.” __________________ Just Sold At the lake the stress of daily life just melts away. Pro Re Nata

07-31-2012, 01:07 PM	#2
samosetguy Senior Member Join Date: Jul 2009 Posts: 61 Thanks: 42 Thanked 35 Times in 14 Posts	Sign of the Times Someone once told me the house on the corner of Governor's (near the No Wake - sort of facing Stonedam) was the most expensive on the lake. I noticed a For Sale sign on it this weekend (and the one to the left of it). It is unfortunately a little out of my price range but snagging the two of them would be nice so you'd have a place for the in-laws.

07-31-2012, 02:15 PM	#5
SIKSUKR Senior Member Join Date: Apr 2004 Posts: 5,075 Thanks: 215 Thanked 903 Times in 509 Posts	Would that be Marc Bourgeois' house? __________________ SIKSUKR

08-01-2012, 12:37 PM	#12
fatlazyless Senior Member Join Date: Apr 2004 Posts: 8,746 Blog Entries: 1 Thanks: 300 Thanked 1,007 Times in 735 Posts	22 Cattle Landing Rd How's about the for sale listing for 22 Cattle Landing Rd, Meredith NH 03253? Here's a brief, off the top of my head history. Until the autumn of 2006 it had been a totally wooded and undeveloped piece of a bigger lot when it was sub-divided off and a local waterfront builder put up a very large wf home for sale on a speculative basis. The asking price was aproximately $3,000,000 in 2006. A very similar home was also constructed at 24 Cattle Landing which was sold in 2006, but 22 never-ever got sold, as far as I know. Now, in August 2012, the 22-home has never been sold, is still owned by the builder, still for sale, and the asking price is now $2,600,000. Six years of holding an unsold house like that must be difficult. __________________ ... down and out, liv'n that Walmart side of the lake!

08-01-2012, 07:03 PM	#13
fatlazyless Senior Member Join Date: Apr 2004 Posts: 8,746 Blog Entries: 1 Thanks: 300 Thanked 1,007 Times in 735 Posts	Down the road at 68 Cattle Landing Rd, a house on about a quarter acre wf sold after about 18 months. It was assessed for $946,400 and sold this spring for 712,500. Across the water on Bear Island, at 63 Bear Island, which abutts the Camp Lawrence land; a one bathroom cottage was assessed for $252,700 and got sold for 73,000. __________________ ... down and out, liv'n that Walmart side of the lake!

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07-31-2012, 01:11 PM	#3
webmaster Moderator Join Date: Jun 2002 Posts: 2,453 Blog Entries: 1 Thanks: 457 Thanked 3,819 Times in 839 Posts	Interesting article. For anyone who's missed it, Roy Sanborn posts interesting analysis of the Lakes Region real estate market regularly in our blogs: http://www.winnipesaukee.com/forums/blog.php?u=12870

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08-01-2012, 06:25 AM	#7
Puck Senior Member Join Date: Jun 2005 Location: Central NH Posts: 96 Thanks: 0 Thanked 78 Times in 20 Posts	Castle NASCAR comes to mind....