The lake area real estate remains hot and in demand. In the past two weeks I have sold two waterfront condos with docks and both had multiple offers and went above the asking price in less than 10 days. I think the tight market for docks on Winnipesaukee had a lot to do with that.

I am moving in Florida and put the current house (that I have been in for 14 years) on the market. There were no open houses, but in the first two days there have been 12 showings and there are 5 more scheduled for today. An offer above the asking price came in last night and if nothing better shows up today I will probably accept it. A total of 5 days on the market.

People continue to escape the cities and the work from home thing makes it even easier to relocate to places like New Hampshire or Florida. It beats Manhattan by a long shot!

Tilton is certainly does best NYC and Long Island. I lived there for 55 years and moved here this past July. Not Covid related I had planned moving here for years when my son started high school.


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Right.

But I wouldn't call it strictly as "Buyer Walks". Buyer may want it but can't get the financing or something. Also another big one is appraisal (which directly affects financing). If appraisal is well below the contract price the buyer might need a larger down payment than they planned on. Contingencies can go both ways in that a Seller can walk too if buyer does not meet some contingencies on the contract. Say if the buyer doesn't get the inspection done by a certain date, the seller can "Walk".

Two months with backup offers still being accepted is a bad sign for the deal but not unheard of. Nor does it mean it was overpriced. So many things can make some deals complex. Like one house we almost got needed court approval because one member of an estate was against the sale. Another needed some boundaries checked etc. And surveyors, appraisers, inspectors etc. were pretty backed up by fall.

Oh, this house is over priced. I'm thinking the appraisal is not coming in high enough and the buyer has to come up with more money or the buyers have to sell their property first before they can proceed. It's a rental on FSBO so the owners are still making money while waiting. Sent from my SM-G950U using Winnipesaukee Forum mobile app

Could also be that the buyers don't want to take possession of it as a rental with tenants living there. I know I wouldn't.

It's been contingent for 2 months now. Recently it's only been weekenders so I'm not sure that's it but I don't know. I would have thought it would have passed by now but something is holding it up.
It's the only rental in my neighborhood so I'm hoping it goes through.

It’s difficult to know what’s going on without firsthand knowledge. I’ve seen contingent on properties which eventually closed within the reasonable time period of sales. Two months isn’t unreasonable. My property was under agreement for six weeks. I didn’t get final papers to sign until two days before closing. While it seemed like an eternity for me, with the volume of real estate changing hands, it was reasonable.

So finally got notification that the house on my street just passed at $1,084300 a year after it was purchased for $720,000.
I know for a fact the the people that sold it made no improvements in the year that they owned it and it was rented pretty consistently on FRBO at $300 a night. Quite a profitable investment!:eek:
Of course I'm thrilled as it won't be a rental any longer. :)

Puts those tax assessments in a certain perspective, doesn't it?

In FL they have a property tax mitigation program called "Save Our Homes".

If you own the property as your primary residence you can reduce the tax escalation to 2% a year.

The program allows continuance as the owner sells and buys another primary residence which has had its tax increases controlled in this manner.

If the property is sold to an owner who has not been eligible for the program continuance the taxes go to the current market level.

This helps people stay in their homes.

Here in NH, rising real estate values don't really help you until you sell.

How do you know it won't be a rental anymore?
$300/night doesn't seem like much for a $1MM vacation property.

Speculating on Real Estate while the real estate market is rising (and very hot) can be a good thing.

But, alas, all good things do come to an end at some point. Think of all those poor folks who purchased Real Estate back in 2006 and 2007 before the bottom fell out.

I don't, but I find it hard to believe that they would pay that much and rent it out.
The people that owned it before were from NH. I saw a Tesla in the driveway yesterday with a Mass plate so I'm assuming that is the new owner that drove up to pass on the property but they are gone today. I guess I won't know for sure until I meet the new owners, hopefully soon. :confused:

Short? Or Long?
 

So, in a few months, Covid will taper off and the market bubble will burst. The new owners will go back to NJ or CT or where ever because it is too long a drive, and it will be rental again because previous tenants will keep calling to renew. Tough cycle to break. Good luck.

That’s not what’s going to happen.

COVID opened the eyes of employers and employees that they can be more productive working from home.

Lot’s of people are moving out of the city, for good.

COVID also put a damper on public transportation, for long after the worst of COVID is over. Another reason to bail commuting to the city and just going remote. It’s also gonna make traffic worse for the ones that drive into the city.

A lot of people on the edge of retirement, decided to retire early.

It may not be as crazy as it was but I suspect the bubble won’t pop.

The people buying these homes are not the ones that lost their jobs due to COVID either.

I agree that this trend will continue for long into the future. The office building market will have a glut of vacancies because, as stated above, employers found out that working from home, works well. And, there are no snow days!

People working from home are enjoying sleeping a little later and finding that they are putting substantially fewer miles on their cars and saving on gasoline.

This is a national movement of people getting away from the big cities and that lifestyle. It is estimated that 970 people a day are permanently moving to Florida. The Florida furniture stores and building material stores are having difficulty keeping enough inventory to meet the demand.

Real estate in the Lake's Region continues to be hot. A property listed for $550,000 two weeks ago in Gunstock Acres had 10 offers and sold for over $700,000 in a matter of days.

It’s not surprising that the most significant growth areas are in the South and Southeast, especially Houston and Dallas in Texas, Florida and the Carolinas.

If there is a bubble to burst there will be a lot of people on the losing end.
You just never know what the next recession will bring. There will be one, we just don't know when. I'm just glad I'm retired. :)
Most of these young workers have not experienced a recession in their working lifetime yet. My son is 33 and it's been nothing but up since he graduated from College. How they handle a down turn will be a new experience.

No one really knows what's going to happen. I work for a large commercial real estate firm and a lot of time and effort is spent trying to project near and long-term trends. What folks in my business generally agree on now is that the pandemic has accelerated previously obscure trends and we are, in 2021, where many thought we could be five or ten years from now - more willing to embrace technology to give us new workplace options. Where companies were experimenting gingerly with remote working prior to COVID, they have in one year been literally forced to implement it.

Keep in mind that up until COVID, there was a long trend toward moving back into cities. An aging population in the suburbs didn't need the big home, maintenance was tiresome, commutes required to do anything were inconvenient, socially distanced neighborhoods were unattractive, there was a lack of entertainment and, in some parts of the country, less proximity to quality healthcare. A lot of this hinged on baby boomers entering their retirement years and young workers looking for opportunity and adventure. These dynamics haven't really changed in my mind and I give it a fair chance that the tide will turn post-COVID and people will once again gravitate toward cities for what they provide - social interaction and amenities that aren't readily available in the suburbs. Also, these cities will be plotting strategies to attract people back - chiefly I believe by becoming more environmentally conscious and by focusing on personal wellbeing. Humans are social creatures and I believe it's easier for cities to meet that need by fine tuning what they currently have versus suburbs having to reinvent themselves from scratch. I just don't see people in mass permanently leaving the excitement of the city for the calm of a suburb.

Perhaps we'll settle into some sort of hybrid end-state - one where we separate 'city' from 'workplace' and understand that they aren't necessarily inextricably linked. I believe many people will return to cities because there are countless reasons to enjoy living in one. And, yes, in those cities people will work - but they will do so from their apartment or condo or the park or corner café - and then occasionally head into a company's strategically consolidated office space for meetings and employee collaboration (which most agree is important for a healthy organization). Of course, these people will still need the periodic escape to the lake for a change of pace and perhaps in the new normal, they'll stay for a good deal longer than they would have in the past.

I keep going back to "Americans have a short memory." Many have already forgotten The Great Recession and how much that crippled huge swaths of people, so, barring any crazy Covid mutations, I'm thinking if vaccines continue to exponentially increase, we'll be back to normal by summer or next fall.

Sure, there may be some holdovers—some might be good, like personal masks for people who are sick and increased hygiene—but I'm thinking the shift won't be nearly as seismic as some have predicted.

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A couple of thoughts:

As I'm sure Wily would point out, we don't need seismic shifts in people to have large shifts in real estate values--it's the last few percent that make a real estate project profitable or that send prices skyrocketing.

Also, keep in mind that you're in a profession that benefits greatly from in person attendance. A seismic (haha) number of people are happier working from home than in their offices. The strongest members of this group will insist on more time working from home, less in the office, and this will ripple through for all. Pretty sure that Facebook and Google, two companies with very powerful workforces, have already acknowledged this

Yes! Pick the lifestyle you prefer and work toward it.
Just as "fair and equal are not the same"- so is true of "living the life v. feeling comfortable and secure".

I moved out of the fast lane to experience my life- not to just live it!

This is not really lake-related, but it is another data point on how crazy the RE market is right now. We have family friends who recently retired and they decided to sell their house, buy an RV, and tour the country. Their home is a late 1950's split-level in Framingham, MA. Listed the house for $589K. In the first weekend, they had 25, (yes, TWENTY FIVE), offers and accepted a cash offer $90K over asking price. They close in 3 weeks.

I've also heard from realtor acquaintances on the lake that many offers now contain "escalation clauses", whereby the buyer writes into the offer that they will go $___ over their offer, and it's usually 50-100K over.

It's related enough, MM. There was a great article in the paper a few days ago that describes how the pandemic has led to some people not wanting to sell/move, and that has caused a ripple effect in the market leading to plummeting inventory, and hence skyrocketing prices, as we see on the lake.

https://www.nytimes.com/2021/02/26/u...uses-gone.html

I believe many baby boomers are reluctant to sell because they are afraid to be a buyer in this market and afraid they will have no place to go.
I want to sell my house in Ma and move to my lake house but my wife is not ready for that. I personally think this spring is going to be the top of the market or very close to it.
Once we get everyone vaccinated and back to work, the economy is going to heat up and inflation will make interest rates go up.
I don't think it will turn into a buyers market but I do think the price increases will slow down to a more normal market, JMO.

I'm curious if island properties will pop 25% like mainland has in the past 6 months when they finally can hit the market again in a few weeks. Maybe not since it can't be your permanent home with a remote office.

My dream of selling my southern NH house getting something with at least a view of Winni and living on Barndoor Island in the summer is fading fast.

Wow. We are thinking of retiring to our house in NH. Problem is, it isn't built yet. A friend suggested we sell now and rent with the hot market. The thought of that makes me crazy. I thought our home in MA was worth $400K-ish (bank appraised it for $425K about 3 years ago I think). A 1970's Split with a new attached two car garage, in ground pool. 0.5 Acre. It has owned Solar too. About 15 miles west of Framingham. Good schools. Park and school walking distance. Maybe it's worth a lot more than I thought.

Those who have the next place bought or being built should consider selling now and renting.

Once interest rates climb the prices will begin to fall.

Job losses will accelerate the price decline.

You will likely get the highest price if you sell now.

Escalation clause? Risky maneuver
 

We retired from the real estate business several years ago, so the concept of an escalation clause in the contract would keep me awake at night. Most realtors are honest, but I can imagine a shady listing agent maneuvering so that the buyer wound up paying the higher amount. I asked a real estate attorney friend about it, and he is familiar with its usage. He says he would never recommend having a buyer put that clause into a contract.

Escalation clause?
 

I know a young attorney who is currently in the buying mode and has made offers with an escalation clause, with a cap. He is also a licensed RE agent. His bid still wasn't enough due to his cap, but he is quite comfortable with the process and offer. If you ant to make such an offer, an hour with a lawyer who deals in RE is probably worth an hours fee. S/He should be reviewing all paperwork anyway, not just a RE agent. No matter how the deal works, realtors are on commission. The only un-connected party is your lawyer.

Escalation clauses in this market are more common that not. I just sold my brothers house on the North Shore of Massachusetts. House was shown over the course of just 3 days with a deadline set for offers. We had numerous offers, ALL for over the asking price. Most of them had escalation clauses in $2k, $5k, and $10k increments! House sold for $90k over asking price. Crazy times indeed.

My wife and I are strongly considering selling our home and renting. I recently retired and she is about 1-2 years out from retirement as well. It is very tempting....

BT

Interesting idea on selling/renting—let's take a moment to consider the equation. In my head, it would come down to "escalated/inflated" sale proceeds - rental fees vs. sale proceeds in a couple years?

So, if you could make an extra $100k now but rented for 3 years at $1500/mth. (fair average rent?) you'd have an extra $46K. Of course, there'd be real estate tax, maintenance, etc. savings which would also add up.

The presumption, of course, would be that whatever house you'd settle on would have gone down in price in that three years, but it's an interesting proposition for one so close to retirement.

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The price escalation seems to be happening in many places, with the exception of the big cities.

In one new Florida neighborhood, of about 800 homes, lots started selling about 18 months ago for $160,000. The same lots today start at $500,000.

One person who bought early (18 months ago) had about $1.1 million total into his property and decided to sell. He listed at $1.5 million and sold at $1.4. That is a nice profit!

It does get tempting to sell your home at the top of the market, take a profit, and wait for the decline to buy back in.

But what if you really like your house? What if the decline doesn't happen this time? What value would you put on missing a summer at the lake?

An additional expense involved in the "sell, rent, buy later" plan is storage of all one's stuff.

Also, if the "buy later" property needs to be financed there is exposure to the inevitable interest rate increases.

AND cost of refurnishing, potentially, both.

MSW, above, also pointed out the "value of missed time" portion of the equation (which, incidentally, I've appreciated throughout all of his posts). Buying at Arcadia was absolutely a questionable financial decision at the time, but I knew it was my family's chance to live that life before my children got too old. They are now 9 & 11, and I'm forever grateful we took the leap.

Any other variables to selling high with the hopes of getting in low in the future?

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I know people who have done the sell, rent, and wait for prices to come down in the past. That's great for young people with no kids but it can take quite a long time for the bargains to become available. If you're older and retired it's tough to put your life on hold and wait for the down turn.
In my case I still have a home in Ma and a home in NH so I have a place to go. But my wife is not ready, she will be ready when prices drop and it's a buyers market.:rolleye2::(

Tight rentals
 

Before you sell, be sure you can get a rental. That market is very tight. I know of one instance where a tenant moved out unexpectedly in November, usually a time when nobody wants to move. In the first 36 hours the realtor had 25 calls and several deposits/applications. This was a single family home. Big complexes and retirement communities may have extended wait lists.

Predictions are difficult, especially about the the future.

My sister got squeezed when she decided for rent for a year or two after selling her house. Prices kept climbing, she could no longer afford what she expected.

Another option, which might work for some, is rather than sell and rent for a couple of years, refinance your current home while rates are low and take some cash out to serve as a down payment on purchasing the home you want now with a low interest rate mortgage. Your current residence could become a rental property that might generate some excess cash flow and you could enjoy your next home now. Alternatively, you could rent out the new home until you are ready to make the move. Of course, there are risks as a landlord and the couple of times I moved and converted my prior residence to a rental property I had the misfortune of having deadbeat tenants who did not respect the property or their rent obligations. I still do not regret the transitions, however, because they enabled me to improve my then current and future home situations at a time when I really did not have a better alternative.

I know of several folks who owned income properties and would exclusively rent to Section 8 Tenants. The rent was guaranteed by the Government. They both became extremely wealthy as a result.

I think I would need an iron stomach to deal with property tenants but it does work for many.

My case is unique that it’s not sell, rent, buy later.

It’s sell, rent, wait for already bought property to be rebuilt.

Some mentioned taxes on selling. If it’s your primary home they wave a huge amount of capital gains. I forget the amount and it may have changed. But I think it’s $500K and it resets every few years if you live in your primary.

Tax laws could change and the rule could change.

If I couldn’t rent I could buy a used RV and park it at the new place and sell it when house is done.

Moving stuff around is a pain though. And we have almost 2 homes worth of stuff stuff in our primary. Because we didn’t want to move it into a house we plan to tear down. Storage is cheap though, assuming you can find it. That is maxed out too.

I also might be able to rent or buy close to the place wanna be at in the first place. I would not rent in MA I’d rent in NH.

I plan to pull some money out of IRA to build. Then replace it when we sell. But it will no longer be tax free compounded. So selling now is another tax win.

I would not want to wait till prices drop. Could be tomorrow or 5 years from now.