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Market Insights

Seacoast Real Estate: Buyers, Sellers are still out there

 

by John Rice, President, Seacoast Board of REALTORS

Gloom, doom and more gloom. Across the USA new housing starts are down. Major real estate markets are flat, foreclosures on the rise. Big-time mortgage companies aren't lending. Wall Street is wild. No question, the real estate market is battered with bad news.

New Hampshire is not immune to all that. But neither does our "correction" reflect the disasters in places like Florida or California.  The seacoast market in particular proves the National Association of REALTORS 2007 mantra:  real estate is local. Buyers and Sellers are out there. This is not 1991.

To be sure, sales totals in the nine sample Seacoast towns present a mixed bag.  First and Second quarter residential sales showed solid gains against 2006 numbers, although condo sales lagged behind 2006 in both quarters. Rockingham county residential sales for the first two quarters were up 4%, while the average sale price of $363,300 represents a 5% decline from 2006.

July, a traditionally slow real estate month, demonstrated retreat in both residential and condominium sales from 2006. Not coincidently, July's 30-year interest rates reached the 7% level after holding steady for more than a year at 6.5%. As of last week, however, interest rates had dropped below 6.7%.

Even so, with the credit crunch intensifying, loans are harder to get. That's not good news for the first-time buyer market, which had taken advantage of near-record low interest rates and declining prices in the first half of 2007. Almost gone or available at much higher interest rates are no-doc loans, 100% piggyback products (combining 1st and second mortgages) and jumbo loans (loans more than $417K).

There may be a silver lining to all this, according to Mortgage Network's Kirk Todd.

 "We are returning to a period of common sense lending," Todd says. "100 per cent no-income verification loans just don't make sense and never did. This ultimately will be a positive outcome for our local real estate industry."

But, isn't there any really good news right now?

Indeed, there truly is. When recently asked to provide some "positive" real estate stories, the Seacoast Board of REALTORs membership had no problem doing so. Here's just a sample.

In Portsmouth, a new side-by-side Islington Street condominium, marketed by Ken Hubbard, Coldwell Banker Residential Real Estate, sells for full price at $387,000 in March after 94 days on the market. It's neighbor closes in July at $3,000 more than full price after 175 days on the market.

Mary McCluskey, a REALTOR at Carlson GMAC Real Estate, Stratham, put her 68 McDonough Street, Portsmouth, listing under agreement in eight days, closing it for 95% of full price at $362,900 on July 27.

 Jane Leger of RE/MAX Coast to Coast, Portsmouth, listed 3 Joyce Lane in Stratham for $324,900 on June 3, selling it for full price the next day. The property closed in two and a half weeks. She sold the Michael Bean Group's 81 Gosport Road listing in Portsmouth, originally marketed at $899,000, after the property had been reduced to $829,000. Because there were many interested parties, her buyers took no chances and paid $840,000. Again the property closed in a scant two weeks.

 "If buyers see value," Leger says, "they purchase and close quickly."

The Michael Bean Group's Jennifer Madden agrees. She and her husband rehabbed a Somersworth apartment building, turning the units into condos. She listed one unit for $169,900, selling it one week for $171,900.

"I tried to price it to move," Madden said, "but still be competitive. When I did a CMA it came in at $192,000. I think the buyer saw good value."

 Value was definitely on the minds of the buyers of 52 Prospect Street in Portsmouth, according to Listing Agent Cori McGrath of Marple and James. The property listed for $295,000 and closed at $292,500 in 21 days after just 23 days on the market.

Indeed, of Portsmouth's 111 residential sales in 2007 through last Saturday, it's worth noting that 27 of those transactions were within $6K of asking price, seven for more than asking price and eight at full-price. Small wonder Port City brokers report from time to time this summer, multiple offers and stiff competition.

There was certainly competition involved when Lynne Cote of Tate and Foss, Rye, sold her 47 River Road cape in New Castle for $1.135 million last month after just 58 days on the market. The action started when the price was reduced to $1.225 from $1.3 million. The winning, no-contingency cash offer was one of 10 offers made during the marketing period.

Cote's success, in fact, is part of a broader spike in the high-end waterfront market. Last week there were four waterfront properties under agreement in New Castle, North Hampton and Rye at asking prices of $1.375, $1.685, $1.950 and $3.5 million. A $6.566 million sale at 2170 Ocean Boulevard, Rye, on May 11 represents the most significant transaction recorded in the local MLS system in at least seven years.

Ultimately, perceived value is probably the most critical factor in motivating buyers to buy. Clearly, the public is recognizing real estate value across a broad price spectrum on the Seacoast.

Having said that, selling real estate in the second half of 2007 will present challenges to buyers and sellers alike. Much of that challenge may be psychological-given the daily bombardment of negative economic news. Still, inventory is abundant and interest rates manageable. Buyers have choices. The news isn't great, but it isn't all that bad either.

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