One Up

Suddenly, gas prices have dropped to $3.50 or so per gallon and it seems like everyone’s mood is improving a little. It’s not that gas is suddenly inexpensive as it is a long way from where we’d like it to be. But at least things seem to be headed in the other direction for a while and perhaps stabilizing some. People become just a little more optimistic when things seem to be headed in a positive direction. I can report for the first time in a long time that the number of homes sold in the past month exceeded the same month for the prior year. Not by much. It was only one sale more, but at least it doesn’t feel like the market is spiraling continually downward. A total of 62 homes in our area towns changed hands in July compared to 61 in July 2007. Not time to strike up the band yet, but it does feel better that things could finally be leveling out and a new normalcy can be maintained. As with gas prices or anything else in life, if things stabilize so consumers know what to expect, everyone has a more positive outlook.

Seventy percent of the sales in July were under $300,000 which shows that the low to mid-range properties are moving. The average sales price for the first seven months this year stands at $360,918 compared to $394,305 for the same period last year. The median sales price has dropped from $250,000 to $227,000 for the same periods. There were three homes that sold for over $1 million in July. One home that just missed being the largest sale in July at $2.175 million was extraordinary in that it was not a waterfront home, but a spectacular mountain retreat on Red Hill in Moultonborough. This 7,800 square foot home has 15 rooms, 5 bedrooms, 5 baths and sits on 62 acres with endless views of Winnipesaukee, Squam, and Kanasatka lakes as well as the Belknap and Sandwich mountain ranges. The home features high quality materials and attention to detail along with some everyday necessities like an in-ground heated pool and tennis court. Just goes to even the cheap stuff off the water can sell if it is priced right.

RESIDENTIAL HOMES SOLD JULY 2008

 Report covers the towns of Aton, Barnstead, Belmont, Center Harbor, Gilford, Gilmanton, Laconia, Meredith, Moultonborough, New Hampton, Sanbornton, and Tilton

The best incentive is a good price.

So here’s the deal. We are up to 1313 residential listings available in the twelve communities listed in the Lakes Region of New Hampshire. That’s up over 100 listings from last month and over 400 from March. Based on the last 12 months sales in the same towns we are looking at 21 months worth of inventory! Great for buyers. Not good for sellers, particularly if you need to sell and sell soon. So what do you do?

Some sellers are offering buyer incentives as a marketing strategy to try and get the attention of the limited number of buyers that are out there. Incentives have been used for a while particularly by some of the larger new home builders. They offer programs like paying for the buyer’s closing costs, paying down mortgage rates, or for upgrading properties under construction. This practice has found its way to the resale market as some anxious sellers have offered vacation packages, cars, boats, or cash incentives as a way to make their property stand out from the rest. Other common incentives include the buyer offering to pay association or condo dues for the buyer for a year or two or free heating fuel for a year (with the prices today that will probably cease). One seller in Hampton last year offered to pay two years worth of taxes on a $1.2 million home or to buy down the buyers’ mortgage rate to the tune of $36,000 if he got an “acceptable offer”. And while the home did sell which was the goal, it sold only for $1.085 million and the seller still gave the incentive.

Sellers also sometimes offer limited-time bonuses to any agent that will bring them a buyer. Usually the more expensive the home is, the larger the bonus.  Despite what some seller’s think, REALTORS® aren’t magicians that can make a buyer appear out of thin air. However, one agent in our office received a $25,000 bonus for bringing a buyer to a multi million dollar home last year. That was great for the agent as things have certainly been tough for real estate professionals for the past couple of years.  But the agent was going to show the property to his buyer anyway as it fit the buyer’s criteria.

So do these types of incentives work? Sometimes, it might catch someone’s attention. Offering to pay for the buyer’s closing costs could catch the attention of a first time buyer. But buyers aren’t bashful in this market. If they need the seller pay closing costs, they ask for it anyway. And offering large incentives will signal a buyer that the asking price is likely inflated to cover the cost of the incentive. Without a doubt, the best incentive to a potential buyer is a better sales price.

Residential Homes Available as of August 1, 2008

Report covers the towns of Aton, Barnstead, Belmont, Center Harbor, Gilford, Gilmanton, Laconia, Meredith, Moultonborough, New Hampton, Sanbornton, and Tilton