Eastman Real Estate Blog

It’s been a few months since I posted some of the state sales figures but here they are. Some of them are rather scary if your a seller. Click on August Sales Stats if you want to go straight to the 3 page PDF file.

Some of the highlights are: The median sale price for all improved properties is $175,000 averaged out year to date. That’s down 6.42% from last year. Sullivan County is down 4.69% but Merrimack County is down 9.51%. I think locally, particularly in Eastman we are somewhat shielded from a 9% drop in a year. We just don’t have that many foreclosures driving prices down like they have in Concord area.

Another number going the wrong way is average selling price per square foot. At $120.00 that is not the lowest I’ve seen but these are August numbers. August sales are typically stronger than November and December. This year we peaked in June. July and August are trending down. It will be very interesting to see where Septembers numbers are.

Eastman specific: We have sold 19 homes so far this year vs. 39 for the same time period in 2010. Slightly less than half of last years numbers. Yet condo sales are up. Year to date there have been 8 units sold vs. 5 last year. By the end of the month the 9th condo sale will take place so that is a good sign.

Another extremely good sign is the fact that the average sales price for homes in Eastman has remained stable from last year. This years average sale price is $284,240. Last year there were three home sales over $600,000 and one sale at $530,000 which raised the average to $304,342. So even though the average is off this year by $20,000 realistically by taking out the highs and lows the average should be right around $280,ooo so this year we have a solid number!!

If you are a buyer, Interest rates are astoundingly low. 30 Year fixed rates with no points at 3.75% Who would have thought that??? The combination of interest rates and home prices are extremely attractive. Don’t be the one to say I should have bought then….It’s a great time to buy….and now is the time!

Eastman home sales for the year 2010 wasn’t all that bad. In fact home sales beat last years total by the end of July!! Condo and land sales are another story. So here is a break down of what has happened.

HOMES—

January 1st-December 31st, 2010 there were 47 homes sold in Eastman

January 1st-December 31st, 2009 there were 32 homes sold in Eastman

CONDOS—

January 1st-December 31st, 2010 there were 6 condos sold in Eastman

January 1st-December 31st, 2009 there were 11 condos sold in Eastman

LAND—

January 1st-December 31st, 2010 there were 2 unimproved lots sold

January 1st-December 31st, 2009 there were 5 unimproved lots sold

As you can see the home sale market was a rather good year. We even beat 2008 when there was 39 homes sold. I anticipate another strong year in 2011 as the rise in interest rates seems to be helping buyers make up their minds faster. This sounds counter intuitive but the cost of money over the life of a loan is far greater then if you were to save another 1-3% in the purchase price of a home. I do believe that home prices have gone down quite a bit but have not reached their bottom. The inventory levels of homes for sale is just to great! The competition between home sellers ultimately leads to lower prices.

As for condos…. Most condos in Eastman are second homes. I believe that only 30% of Eastman condos are primary. So the bulk of the sales market is to the vacation buyer. Here is the problem, where is the vacation home buyer? The vacation home buyer has been sitting on the side lines for years now. As the stock market and job security strengthen vacation buyers will be back!!

Land… I get more calls on land then homes or condos, mostly, out of area callers. The hardest thing to do is to get someone to hop in their car and drive one, two or three hours to look at a piece of land. If buyers are in the area then that’s a different story.

If you have questions regarding taxes on income that will be imposed due to Health Care Reform, The National Association Of Realtors has put together a document with frequently asked questions and their answers.

Health INS Reform 1 and Health INS Reform 2 will get you the PDF’s for you to down load. This is a six page document total (three pages each PDF) and is filled with information that will affect so many. Do you know “Who is a HIGH INCOME taxpayer?” Do you know if rental income will be taxed? What about the 3.8% Medicare tax?

This is a must read for so many and it’s just a click away.

I got a few good questions today and here are some answers.

Why do you only show the list price of your sold properties? If you are looking at sold properties from my www.EastmanRealEstate.net blog, the blog links directly to my other web site www.JeffAdie.com
That site is limited to what information I can input. The list price is the only price I can post and I’ve asked for that to be changed and no success there.

You don’t show days on market, why? This is a very complex number and I don’t believe its valid. Here are some of the reasons why.

Properties are listed too high, don’t sell, then people take them off the market. The seller either re-lists or changes agents. If they re-list all you have to do is wait 30 days, get a new MLS number and the days on market number resets to zero. If they change agencies, you can re-list right away, get a new MLS number and days on market start at zero. I’ve seen the same property go on and off the market for years but the days on market only show a handful of days when it should be years. Another issue I have with days on market is a scenario like this.

New Listing January 1st, 2009 Price $500,000. Three months go by no showings

Price Reduction April 1st, 2009 new price $475,000. One or two showings but nothing happens.

Price Reduction July 1st, 2009 new price $450,000. Several showings, even some interest but no offers.

Price Reduction October 1st, 2009 new price $425,000. Showings start, interest, and the house sells at $419,000 and closes on  October 30th, 2009.

Here is my question: Should the days on market be 304 days? Or should it be 30? The original price was a pipe dream, the property would still be on the market if they didn’t reduce the price. If the home was priced at $425,000 it would have most likely sold in 30 days.

What do you think?

A few questions were put in front of me this am and I will try to answer them as best I can.

First I would like to say that home and condo prices are dropping everywhere. Prices in Eastman may have declined seemingly more than some other local areas and that may be true. I believe that there is more direct competition in the smaller radius of Eastman compared to other towns. Look at the size of Enfield, it’s about 52 square miles, New London is 25.6 square miles. Even though New London has the same amount of homes for sale the distance between them is far greater than homes in Eastman. This is one of the reasons New London’s home sales are down so much over the last few years. Prices have not declined as much and until they do New London will see a slow housing market.

The Buy In Fee: I do not believe the buy in fee has much affect on buyers. As stated before, buyers know that fee exists well before they drive into Eastman. If buyers are afraid of the buy in fee, they usually don’t show up.

The Annual Assessment: This cost does equate to about $40,000 in mortgage money. Using today’s interest rates and financing a home, an Eastman buyer paying $250,000 for a home in the community can for the same monthly outlay pay $290,000. So, yes I do believe the annual assessment does influence prices of homes.

Something else to consider is the cost of land. I believe that the cost of land in Eastman is so low that it dramatically reduces the over all cost of a home. Keeping the cost per square foot lower than if you built in New London or other surrounding towns. Considering a lower initial cost leads to a lower re-sale value. I think this idea gets left out at lot during many “value” discussions.

If you haven’t noticed recently interest rates have dropped to their lowest point in decades.

Local lenders all around Grantham NH have rates as low as 4.375% for a 30 year fixed rate loan. If you want a 5 year adjustable then how does 3.5% sound?

When I bought my first house in New London NH I was thrilled to have an interest rate of 7.99% I thought that was the best I would ever get. Back in November I purchases home number 4. Just 9 months ago I was happy to see 4.75% I’m still happy with this rate and who would have thought that rates would continue to drop?

So many “experts” were saying how rates would jump as high as 8% by the fall of 2010. I had serious reservations about that but I too thought rates would start to head higher. This down trend is perfect timing for the housing market and is really the true stimulus, an unforced natural effect of the “market place”. So unlike government interference and programs that cost so much money.

Buyers and sellers should take notice, do some math and figure out just how much money they can save.

Let me start by saying that for me, this year has started off as my best year ever. One other agent in my office is off to her best year ever. There is no doubt that home sales in this area were moving right along. That is until the end of March when things seemingly quieted down. Now we are into mid May and more and more people I talk to are saying the same thing. Agents and mortgage brokers from Hanover to Warner are all saying “it’s quiet”.

Here’s some information that is not in the main stream media just yet. HEADLINE: Housing Starts Rise 5.8% Yes this was a national headline and for April that was great news. Even single family home starts rose 10.2%. As you read further multifamily starts declined 18.6% but the biggest number that was buried was the fact that new home building permits, which gauge future activity declined 11.5% to an annual rate not seen since October 09′.

The next big miss by major media was that mortgage applications dropped 27.1% compared to the previous week and was 24.1% lower than the same week last year. It was actually the lowest level of applications since May 1997!

Even while mortgage rates have dropped a half point or more in recent weeks, mortgage applications drop to the lowest level in thirteen years?

Where is this market going? Non of the so called experts seem to know. One head line read “Housing Prices Could Rise 12.4% By 2014″. This is based on an average of 100 analysts and market strategists. Some of these so called strategists worked for banks and one prediction from a banker was home prices will rise 37% by the end of 2014. Is this guy serious? It would be great if he was right but I’m not going out on that limb. Other analysts had more bearish thoughts, predictions of still more declines of 18%.

I’m not sure where were going on a national level but what is happening here in Eastman? As long as there is a large inventory , sellers have little pricing power. With 86 homes and 34 condos currently on the market, the property’s that will sell are the ones that have the greatest value (nicest home for least cost).

It appears to me that locally, it’s still a buyers market and price appreciation is not going to happen in 2010.

This is a very interesting article that was in U.S. News & World Report. It’s short and to the point and very positive. No one has a crystal ball, please read and post some comments. I like to read what you have to say and think.

The Future Of Home Prices

The recent word for the Federal Reserve (12/17/09) stated that short term interest rates will continue to remain low for “an extended period”.

This is interpreted by many that this means months. Well this sounds good but the reality is interest rates have been creeping up. As recently as the week of November 16th-20th interest rates were as low 4.6% for conventional, 30 year fixed rate loans.

As of this week it is hard to find a loan rate under 5%, most rates are closer to 5.25%. This is a minimum of a half point jump in a month. It doesn’t seem like much but a half point is a half point! On $150,000 loan that equals $45.87 a month, $550.44 a year and over the life of the loan the additional cost is over $16,500

So my point is if your out there waiting for home prices to drop just that little bit more because you want to buy at the bottom the rate you might get on your loan my cost you more in the long run. My feeling is from what I see in this local market is we have bottomed and home prices have stabilized. There is just to much inventory for prices to start to rise but I believe the price depreciation we have been seeing is coming to an end.

This is a great article on the First Time Home Buyer’s Tax Credit. Click on the continue reading button to get the PDF link. This is worth reading if you are planning to buy or even thinking of buying.

With interest rates as low as they are right now and home prices at their most affordable buying rather then renting is just an opportunity that shouldn’t be passed up!

Tax Credit Advice