*Finally, after 3 1/2 years of market declines, on October 1, 2009 Steve declared "NOW IS THE TIME TO BUY". (Just make sure you will be able to survive future bumps in the road by having proper reserves and a 3-10 year market orientation.)
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"2010"
MILD WEATHER HAS RESULTED IN "PREMATUE SPRING FEVER".
There has been a major uptick in activity since mid-February.
RECENT SIGNS OF ECONOMIC RECOVERY!
We are now transitioning from recession to recovery according to the Conference Board's Leading Economic Index (LEI), which has a superb record of forecasting past recoveries. The index itself has now risen for the past 10 consecutive months. If correct, the recession ended during the second quarter (June '09) and chances are good that the economy will keep growing through the first half of the year. Confidence is the key. Both businesses and consumers need to feel like its a worthwhile thing to start spending money again. During recoveries, one should remember that the real estate market will tend to move in a "u"-shaped curve verses a "v"-shaped one. As soon as the market shows any signs of again moving upward, the pent-up supply of sellers will flood the market, quickly bringing any recovery to a halt. Expect many bumps along the way, however, the overall market appears to be headed in the right direction.
Nationally, the housing sector has been showing signs of stabilization. Prior to a 10.6% drop in new housing starts for November, they had been in their highest level in over a year. Many attribute the recent drop to the possibility that the $8000. tax credit would not be renewed. Not only was it renewed, through April 30th, but also expanded to include a $6500 credit for existing homeowners who meet certain criteria. Combined with lower borrowing costs and increased affordability, it is anticipated that demand will improve in coming months.
IS THE U.S. ECONOMY HEADING FOR ANOTHER DIP?
Our elected officials seem bent on increasing the inefficient spending wave garnering their favorite special interests and our governments desire to gain greater control. Many experts fear that our economy is much too fragile for such reckless spending. The deficit continues to grow with no slowing in sight. Combined unemployment and underemployment figures exceed 17% of the workforce, yet our federal government still looks for ways to feed industrys' "Dinosaurs" instead of new and vital sectors with real potential for leading this economy back to prosperity. Just when you think things cannot get worse, oil prices seem to be moving up again. Higher energy prices can only further reduce consumer confidence and discretionary spending. Let's not dwell on such disheartening information!
BUT HOW DO THESE SIGNS OF RECOVERY IMPACT THE REAL ESTATE MARKET IN THE LAKES REGION?
Here in the Lakes Region, we have a predominance of 2nd homes and a serious lack of industry/jobs. With the exception of distressed/foreclosed properties our overall market remains extremely soft. The market for homes $350,000 and above also remains extremely soft.
With this said, OPPORTUNITIES ABOUND. Many prospective buyers have been focused strictly on foreclosure/bank owned properties. Since late fall we have seen a slight pick-up of prospective 2nd home buyers starting to scout the market for deals. Most seem to be in no hurry to purchase. At least they are looking!
At Curry, focus has been placed on counseling anyone who wants to know how this market is personally impacting them. We also have launched a new service that will provide specific information on all of the area's available bank-owned/foreclosure opportunities. The properties are priced to move. All offers seem to be taken seriously. We are also well versed on helping the vacation home buyer narrow their search to the aggressively priced offerings.
As I have previously mentioned month after month my advise to buyers is focus on "location", as well as price. It will be the properties that boast strong locations that will hold up well even if the overall market slips further. The current extensive selection can enable buyers to find specific properties that really match their personal criteria. The passing of time will eventually make their investment a sound one. In the meantime, they can enjoy living in a most desirable home.
Also, "serious sellers" will have to price their homes correctly. Unless you are selling a very unique and desirable property, any other strategy will most likely result in a frustrating and extended period of time on the market. As I have been indicating, month after month, sellers who are not willing to price more aggressively than the competition, will probably not be taken too seriously by the current pool of potential buyers. We have seen so many well intended sellers initially overprice only to follow the market downward with any corrective changes. In the end, they end up with less than they could have gotten if they had just priced it right from the start.
Currently the town of Alton has 120 active home listings, 5 of which currently have sales agreements and are awaiting closing. 2 homes sold in the month of February.
Price Range # of Homes Listed # of Pending Sales # of Closings
0 to <$200,000 16 4 1
$200,000 to $300,000 40 1 1
$300,000 to $400,000 15 0 0
$400,000 to $500,000 6 0 0
$500,000 to $1,000,000 24 0 0
$1,000,000 and up 19 0 0
FIRST-TIME HOMEBUYERS
This is your window of opportunity. Eventually mortgage rates will most likely be heading north along with treasury rates. The $8,000 tax credit has been extended and expanded to include a $6500 allowance to non 1st time home buyers who qualify. Serious sellers abound. Do not wait for inevitable runaway inflation to price you out of home ownership. Purchasing a home will be your best hedge for building wealth! REMEMBER DO NOT BUY WITHOUT A BUYERS AGENT. IT COSTS YOU NOTHING!
TRADE UP OR DOWN
I think this is a good time considering the selection of available properties and very favorable mortgage rates. You'll need to take a hit on the selling side and make up for it by negotiating a good deal on the purchasing side. It should work out to being "a wash". Do not expect to sell high and buy low or you will miss this opportunity. You'll need to be very realistic.
WINNIPESAUKEE LAKEFRONT SELLERS EXPERIENCE THE WINTER SEASON WITH A DEFINITE "CHILL".
Many unsuccessful lakefront sellers pulled their properties off the market prior to the holidays. We are now seeing many of them come back on the market on a daily basis. We could be headed for new highs when it comes to the number of available Winnipesaukee properties. Much will depend on whether or not we see any substantial pick up in sales.
The Winnipesaukee lakefront market is somewhat atypical in that no matter how large the inventory becomes, most sellers have demonstrated "staying power" resisting "aggressive pricing."
Currently the inventory of available Winnipesaukee lakefront homes is 194 with just 11 under agreement. Never has the selection been so extensive. Also behind many of the optimistic asking prices exists a pool of sellers who are now willing to "bite the bullet" on the first bonafide offer that comes their way.
Price Range # of Homes Listed # of Pending Sales # of Closings (since7/1/09)
<$1,000,000 78 7 32
$1 Mil to $1.5 Mil 26 0 6
$1.5 Mil to $2 Mil 33 1 6
$2 Mil to $3 Mil 27 0 4
$3 Mil to $4 Mil 12 1 2
$4 Mil to $5 Mil 12 2 1
>$5,000,000 6 0 3
194 11 54
In addition, 40 Winnipesaukee lakefront lots are active with 0 pending and 7 sold since July 1, 2009.
If by chance you are ready to test the waters, please contact me. I created www.buysmartnh.com to provide a unique array of high-end buyer representation services.
Please feel free to share your thoughts with me anytime.
Steve Gray
Cell phone 603-387-2488