$3,995,000 - Wow...

[Descant]

Originally Posted by TheTimeTraveler

....just wait to see what happens to Real Estate prices when the stock market starts heading south.

In 2017, the DJIA was starting at ~17000. It is now almost at 36000. So it drops 15% to 26000. Temporarily. We're all still way ahead. People will likely still be fleeing NY,NJ, CT. Waterfront will still be valuable. Buy whatever you can on the smaller lakes now. Comparatively, Ossipee and Newfound are probably cheap.

[John Mercier]

Housing actually leads the market.
It only seems the other way around because real estate is not valued minute to minute through the weekday.

As stated housing is very effected by location... so some will see softening prices long before others. And different sections of the housing market will act differently throughout the cycle.

[Biggd]

What's happening is because of extremely low interest rates and the run up in the stock market people are taking money out of their primary residences and buying second homes in cash at an alarming rate.
When we have a recession, and we will have one again, what will people do to save their primary residence from foreclosure if they can't keep up the payments? Do they sell their primary residence which could have a bigger mortgage than the sale would bring in or do they sell their second home with no mortgage for less than what they paid for it?
In past recessions vacation area's got hit the hardest and recovered the slowest but we are in a place where we've never been before in our economy so it will be interesting to see how this plays out.

[mswlogo]

Originally Posted by Biggd

What's happening is because of extremely low interest rates and the run up in the stock market people are taking money out of their primary residences and buying second homes in cash at an alarming rate.
When we have a recession, and we will have one again, what will people do to save their primary residence from foreclosure if they can't keep up the payments? Do they sell their primary residence which could have a bigger mortgage than the sale would bring in or do they sell their second home with no mortgage for less than what they paid for it?
In past recessions vacation area's got hit the hardest and recovered the slowest but we are in a place where we've never been before in our economy so it will be interesting to see how this plays out.

Great post.

Another thing to add to the unique situation is since the 2008 real estate crash is a lot of builders got out or went bankrupt. So there is a shortage of housing in general. It’s pretty hot in lots of places besides vacation areas. The low supply is a big part of rising prices.

A lot depends on “Pandemic 2.0”, and right now that’s not looking good at all.

I think a normal recession would not be so bad. But we could see the worst economic crisis ever a year from now if we see another COVID winter like the last. I think there is a 50-50 chance of that happening.

[Biggd]

Originally Posted by mswlogo

Great post.

Another thing to add to the unique situation is since the 2008 real estate crash is a lot of builders got out or went bankrupt. So there is a shortage of housing in general. It’s pretty hot in lots of places besides vacation areas. The low supply is a big part of rising prices.

A lot depends on “Pandemic 2.0”, and right now that’s not looking good at all.

I think a normal recession would not be so bad. But we could see the worst economic crisis ever a year from now if we see another COVID winter like the last. I think there is a 50-50 chance of that happening.

A lot of these younger home buyers, under 35, haven't experienced a real down turn in their working careers. How prepared are they when they lose their job and no one is hiring, will they panic sell?
I think it is more likely people still try to unload their second homes to try and save their primary home. When that happens inventory sky rockets, no one can afford to buy, and prices fall.
Just how far they fall depends on the length of the down turn and how long people can hold on.

[John Mercier]

Not sure that there are a lot of 35 year old people taking money out of their primary home to buy a second home - maybe pulling money from their retirement accounts.

[Juiced06GTO]

My wife and I are fairly successful 37 and 36 year olds w three kids and I wouldn't have even close to enough money to pull out of my primary home to purchase a house on the lake haha! As a matter of fact it could be 100% paid off and I still would only be purchasing one of the vacant lots on Rattlesnake right now...

Now if I wasn't paying full time day care for three kids maybe I'd have a shot!

[Biggd]

Originally Posted by Juiced06GTO

My wife and I are fairly successful 37 and 36 year olds w three kids and I wouldn't have even close to enough money to pull out of my primary home to purchase a house on the lake haha! As a matter of fact it could be 100% paid off and I still would only be purchasing one of the vacant lots on Rattlesnake right now...

Now if I wasn't paying full time day care for three kids maybe I'd have a shot!

I didn't say they are all buying multi million dollar lakefront homes. Not everyone can afford the vacation home of their dreams.
There are still modest affordable vacation homes in the mountains and around the smaller lakes of NH. Each family has to buy to their level of ability.
I know of a couple around your age with 3 small kids that just bought a 2br camp with beach rights on lake Ossipee with cash from their the refi of their primary residence.

[thinkxingu]

Originally Posted by Biggd

A lot of these younger home buyers, under 35, haven't experienced a real down turn in their working careers. How prepared are they when they lose their job and no one is hiring, will they panic sell?
I think it is more likely people still try to unload their second homes to try and save their primary home. When that happens inventory sky rockets, no one can afford to buy, and prices fall.
Just how far they fall depends on the length of the down turn and how long people can hold on.

There are also a whole lot of people who have already forgotten what things were like in '08-'xx. Case in point: friends of ours just pulled out a ton of money from their home equity that will probably put them under water when values level off AND extended their loan to 30 again, putting the payoff ten years or so AFTER retirement. Crazy stuff, and here I am trying to be debt-free by 50 (won't happen, but it'll be close!).

Sent from my SM-G950U using Tapatalk

[ApS]

Originally Posted by Biggd

A lot of these younger home buyers, under 35, haven't experienced a real down turn in their working careers. How prepared are they when they lose their job and no one is hiring, will they panic sell?
I think it is more likely people still try to unload their second homes to try and save their primary home. When that happens inventory sky rockets, no one can afford to buy, and prices fall.
Just how far they fall depends on the length of the down turn and how long people can hold on.

LaDaSun article regarding inventory-history and prices among older shorefront communities--examples at Patrician Shores:
https://www.laconiadailysun.com/real...f29784ad5.html

I note boat size is limited to a reasonable (for Lake Winnipesaukee) 24-feet.

[John Mercier]

Most of what Frank Roche writes feels like an advertisement.

[joey2665]

Originally Posted by Biggd

What's happening is because of extremely low interest rates and the run up in the stock market people are taking money out of their primary residences and buying second homes in cash at an alarming rate.
When we have a recession, and we will have one again, what will people do to save their primary residence from foreclosure if they can't keep up the payments? Do they sell their primary residence which could have a bigger mortgage than the sale would bring in or do they sell their second home with no mortgage for less than what they paid for it?
In past recessions vacation area's got hit the hardest and recovered the slowest but we are in a place where we've never been before in our economy so it will be interesting to see how this plays out.

I’m sorry but where exactly are you getting this statistic from? I find it extremely hard to believe people are pulling enough equity from there primary homes to buy a vacation home around the lake for cash. Maybe pulling equity out for a down payment I could easily see but enough to buy here in cash is highly unlikely for most.


Sent from my iPhone using Winnipesaukee Forum mobile app

[Descant]

If you're buying, selling, financing real estate (or your boat) based on info on this Forum, you need to re-think your plans. Talk to YOUR OWN CPA, and investment advisor. If you have only ONE, you are probably under-advised. At the same time, you need some self-education so you're not paying these folks 1% each for overlapping advice. And note that Fisher investments and similar, who has a lot of convincing commercials, charges twice what you pay to many brokers who offer many more services through related banks.

[joey2665]

Originally Posted by Descant

If you're buying, selling, financing real estate (or your boat) based on info on this Forum, you need to re-think your plans. Talk to YOUR OWN CPA, and investment advisor. If you have only ONE, you are probably under-advised. At the same time, you need some self-education so you're not paying these folks 1% each for overlapping advice. And note that Fisher investments and similar, who has a lot of convincing commercials, charges twice what you pay to many brokers who offer many more services through related banks.

Amen !!!! Very well said!


Sent from my iPhone using Winnipesaukee Forum mobile app

[Biggd]

Originally Posted by joey2665

I’m sorry but where exactly are you getting this statistic from? I find it extremely hard to believe people are pulling enough equity from there primary homes to buy a vacation home around the lake for cash. Maybe pulling equity out for a down payment I could easily see but enough to buy here in cash is highly unlikely for most.


Sent from my iPhone using Winnipesaukee Forum mobile app

This whole house of cards will fall when the next recession hits. No one ever really knows what causes them until after they hit but it will happen. It's unfortunate but there are winners and losers when the dust settles.

[Biggd]

Originally Posted by joey2665

I’m sorry but where exactly are you getting this statistic from? I find it extremely hard to believe people are pulling enough equity from there primary homes to buy a vacation home around the lake for cash. Maybe pulling equity out for a down payment I could easily see but enough to buy here in cash is highly unlikely for most.


Sent from my iPhone using Winnipesaukee Forum mobile app

I know this is a Lake Winnipesaukee forum but I don't believe I said everyone is buying vacation homes around Lake Winni with cash from their primary home.
A vacation home can be anywhere people go to vacation. The economy doesn't revolve around just NH.

[joey2665]

Originally Posted by Biggd

I know this is a Lake Winnipesaukee forum but I don't believe I said everyone is buying vacation homes around Lake Winni with cash from their primary home.
A vacation home can be anywhere people go to vacation. The economy doesn't revolve around just NH.

OK that’s fine it’s not New Hampshire it’s all over the country but you show me where you found the statistics that say most people are cashing out the equity in their primary residence to buy vacation homes for cash. I just don’t think it’s true. honestly I think it’s nonsense.

And we could all speculate on whether they’ll be a recession or a large correction and the prices of real estate will plummet none of us knows for sure and as we seen recently the government and businesses alike including banks will do everything they can to try to avoid going into an extended term recession.


Sent from my iPhone using Winnipesaukee Forum mobile app

[Biggd]

Originally Posted by joey2665

OK that’s fine it’s not New Hampshire it’s all over the country but you show me where you found the statistics that say most people are cashing out the equity in their primary residence to buy vacation homes for cash. I just don’t think it’s true. honestly I think it’s nonsense.

And we could all speculate on whether they’ll be a recession or a large correction and the prices of real estate will plummet none of us knows for sure and as we seen recently the government and businesses alike including banks will do everything they can to try to avoid going into an extended term recession.


Sent from my iPhone using Winnipesaukee Forum mobile app

I'm sorry I can't give you statistical proof. I get my information from my best friends son who is one of the top 50 residential mortgage brokers in the country, he works through Leader Bank in Needham Ma. He tells me where the money is going and I believe him.

[joey2665]

Originally Posted by Biggd

I'm sorry I can't give you statistical proof. I get my information from my best friends son who is one of the top 50 mortgage brokers in the country, he works through Leader Bank in Needham Ma. He made almost 3 million dollars writing mortgages in 2020. He tells me where the money is going and I believe him.

Your source is one person really? I put no faith in that whatsoever. When you come back with some real statistics then we can continue the conversation


Sent from my iPhone using Winnipesaukee Forum mobile app

[Biggd]

Originally Posted by joey2665

Your source is one person really? I put no faith in that whatsoever. When you come back with some real statistics then we can continue the conversation


Sent from my iPhone using Winnipesaukee Forum mobile app

We don't need to continue this conversation. We really don't see eye to eye on many things.
You're free to believe what and who you want as am I.

[joey2665]

Originally Posted by Biggd

We don't need to continue this conversation. We really don't see eye to eye on many things.
You're free to believe what and who you want as am I.

Yes you are free to believe what you want but I do find it hypocritical when somebody post something you don’t believe you always ask for back up statistics and then the one time I ask for back up statistics and you can’t produce them. Have a great day


Sent from my iPhone using Winnipesaukee Forum mobile app

[Biggd]

Originally Posted by joey2665

Yes you are free to believe what you want but I do find it hypocritical when somebody post something you don’t believe you always ask for back up statistics and then the one time I ask for back up statistics and you can’t produce them. Have a great day


Sent from my iPhone using Winnipesaukee Forum mobile app

I don't ask for statistics because I don't have faith in where they come from. I'm old school and believe in people I've had business relationships with through the years.
I think we're done here.

[Descant]

Originally Posted by Biggd

I'm sorry I can't give you statistical proof. I get my information from my best friends son who is one of the top 50 residential mortgage brokers in the country, he works through Leader Bank in Needham Ma. He made almost 3 million dollars writing mortgages in 2020. He tells me where the money is going and I believe him.

If I were paying cash for something, my broker might know, but I would have no reason to be in contact with a mortgage banker. If I'm using a HELOC for any purpose, I don't have to specify intended use when I open up the line of credit. When I bought a property this spring, I was (almost) able to do a wire transfer from Fidelity to the title company's escrow account. (The transaction was over the online limit, so I had to confirm with "the next representative" who happened to be in Dallas. 2 minutes. No mortgage officer would have any way of knowing about this transaction. He could get anecdotal, second hand information from a title company.
Leader Bank, only founded in 2002, lists three MA locations on their website and no reference to being licensed in other locales. That makes your young friend immeasurably impressive to be one of the top 50 in the country.

[Biggd]

Originally Posted by Descant

If I were paying cash for something, my broker might know, but I would have no reason to be in contact with a mortgage banker. If I'm using a HELOC for any purpose, I don't have to specify intended use when I open up the line of credit. When I bought a property this spring, I was (almost) able to do a wire transfer from Fidelity to the title company's escrow account. (The transaction was over the online limit, so I had to confirm with "the next representative" who happened to be in Dallas. 2 minutes. No mortgage officer would have any way of knowing about this transaction. He could get anecdotal, second hand information from a title company.
Leader Bank, only founded in 2002, lists three MA locations on their website and no reference to being licensed in other locales. That makes your young friend immeasurably impressive to be one of the top 50 in the country.

Look him up, Keith Hapenney. His resume is impressive.

[mswlogo]

Originally Posted by Biggd

I know this is a Lake Winnipesaukee forum but I don't believe I said everyone is buying vacation homes around Lake Winni with cash from their primary home.
A vacation home can be anywhere people go to vacation. The economy doesn't revolve around just NH.

One other thing folks keep forgetting.

A "Cash" offer does NOT mean the buyer has the cash sitting in their checking account.

All it means they are willing to write the contract with no contingency for a bank loan approval. With high demand it was often a necessity if you wanted a property to make a "cash" offer. I've done "cash" offers with every intention of getting a loan and I was confident I'd qualify for the loan and had more than enough down payment that would cover a low appraisel.

In the past you could save money making a "cash" offer because that was a more secure offer to the seller than a higher financed offer.

Although some sellers now demand that you have "proof of funds". But that does not mean you have to use those funds you used as proof. You could show them your retirement account and then go get a loan.

So nobody knows how all these homes were actually financed. Only what was written on the contract, which is totally irrelevant.

But I will say, there are a lot of people with a lot of cash.

I've "financed" every way imaginable Including have a bank loan approval on the contract when I intended to pay cash.

The only thing really required is you show up with a check on closing day. Where the money comes from and what was on the contract could be any thing.

My guess is 1/3 of the "cash" purchases were true cash purchases. They could have sold another property (possible with a bridge loan), refinance another property or did a standard mortgage. My guess is they surely had hefty down payments on hand though.

Also with the Septic Assessment requirement for water front, you can walk away from any contract if you just don't like the assessment. Most buyers don't know that though. So there is little risk in making a cash offer initially. And the assessment is technically not due until closing !!

For our last purchase I had money from a sale (that had no mortgage), but not enough to cover the new home. But I made cash offers well over what I had in cash. We had a good sized equity loan on our primary with no balance (great advice someone once gave me). So I just used that. But the seller demanded showing we had the cash so I showed them our IRA, which I never used. It's all fun and games.

[Biggd]

Originally Posted by mswlogo

One other thing folks keep forgetting.

A "Cash" offer does NOT mean the buyer has the cash sitting in their checking account.

All it means they are willing to write the contract with no contingency for a bank loan approval. With high demand it was often a necessity if you wanted a property to make a "cash" offer. I've done "cash" offers with every intention of getting a loan and I was confident I'd qualify for the loan and had more than enough down payment that would cover a low appraisel.

In the past you could save money making a "cash" offer because that was a more secure offer to the seller than a higher financed offer.

Although some sellers now demand that you have "proof of funds". But that does not mean you have to use those funds you used as proof. You could show them your retirement account and then go get a loan.

So nobody knows how all these homes were actually financed. Only what was written on the contract, which is totally irrelevant.

But I will say, there are a lot of people with a lot of cash.

I've "financed" every way imaginable Including have a bank loan approval on the contract when I intended to pay cash.

The only thing really required is you show up with a check on closing day. Where the money comes from and what was on the contract could be any thing.

My guess is 1/3 of the "cash" purchases were true cash purchases. They could have sold another property (possible with a bridge loan), refinance another property or did a standard mortgage. My guess is they surely had hefty down payments on hand though.

Also with the Septic Assessment requirement for water front, you can walk away from any contract if you just don't like the assessment. Most buyers don't know that though. So there is little risk in making a cash offer initially. And the assessment is technically not due until closing !!

For our last purchase I had money from a sale (that had no mortgage), but not enough to cover the new home. But I made cash offers well over what I had in cash. We had a good sized equity loan on our primary with no balance (great advice someone once gave me). So I just used that. But the seller demanded showing we had the cash so I showed them our IRA, which I never used. It's all fun and games.

Exactly, many cash offers are financed after the sale is made. No one really knows where all the money comes from other than the person writing the check.
When I said people are taking money out of their primary homes to buy vacation homes in cash it doesn't mean that all the money is coming from there but people have been tapping their home equity to the max because of these low rates that we may never see again. Many people are in debt to the max with the rates this low. Is it wise, only time will tell.
I'm just happy I don't have to worry about debt any more. I do have to admit though, that if I was younger I would be taking advantage of these low rates also because they will only go up from here.