For a professional couple at or near retirement age who own an apartment in Manhattan, or a family stuck in a Boston home as they watch through social media as their neighbors ride out a quarantine at their lakehouse, the prospect of owning a weekend or vacation home in the Lakes Region seems at least as good as ever.
Those, combined with low inventory, are some of the reasons why prices in the local real estate market have held steady, even during a time of historic unemployment due to the COVID-19 pandemic. And that spike in interest is occurring when real estate professionals now have more tools at their disposal to show homes and meet with clients in a virtual capacity.
Real estate agents said that prices are being buoyed by a lack of inventory, which predated the coronavirus by months and has continued into the spring selling season.
“What we’re seeing is there’s not a lot of second home owners coming up to get their home ready to put on the market because they’re seeing that things are uncertain,” said Scott Knowles, an agent with ReMax/Bayside.
“Not only do we have the lack of inventory, but we have ready, willing and able buyers,” Knowles said.
That explains why many properties – especially those on the water or with water access – are going under contract within days of being listed. “Especially for those buyers who have been looking for some time, they’re jumping on it because they might have missed out on a property a couple of times already, or they know they’re one of 10 buyers looking for that waterfront property,” Knowles said.
It’s a situation where buyers are willing to spend a million dollars or more on a property, even if it isn’t exactly what they had in mind. In short, it’s a seller’s market.
“It’s a benefit to sellers, for sure, but as far as a buyer, you don’t have a lot of choices, so you’re jumping on what you can get just so you get something,” Knowles said. “It’s the Lakes Region and everyone wants to be a part of it.”
Adam Dow of Dow Realty Group in Wolfeboro, said prospective sellers have misread the market, perhaps thinking they would have to consider lower offers at this time.
“The people that wanted to sell have sold. There are other people who would have listed this spring who have pumped the brakes a little bit,” Dow said. He said that he’s pricing new listings at the same levels as before the pandemic, and they’re still selling.
“The values are not changing, but those homes are still being sold, which means that we’re still in a historically high market,” Dow said.
The inventory side is also being limited because some owners are leveraging their property as a rental, or because they are currently working remotely from their weekend home. Meanwhile, demand is as high as ever.
“There’s something to be said about having an escape during a pandemic period,” Dow said. He’s also noticed that the current generation of buyers is more interested in experiences than trophies, and a lake house can be an avenue to making positive memories during a difficult time. “They want to have experiences they can share with their kids.”
The numbers back up what the realtors are seeing. Dow’s agency listed fewer homes for more than $1 million during March and April this year than it did during the same two months last year, but it has more properties under contract or sold this year.
Roche Realty, located in Laconia, is seeing the same thing. Frank Roche said his figures for the first four months of 2020 “surprised the heck out of me” when he crunched the numbers. Total sales volume, the value in dollars, for his agency increased by 20%, and the tally of properties sold is up even higher, 42%. “Hard to believe, isn’t it?”
Some of those increases come with a caveat, Roche said. Closings tend to occur about a month or two after deals are written, so the April sales are really reflective of activity that concluded in February, before the coronavirus was considered to be a local concern. But there’s no sign that a slowdown is imminent – he mentioned that there’s a calendar full of closings scheduled for May, including 15 on one day alone.
Roche considered it likely that things would eventually slow temporarily, perhaps in July or August, as the limited supply draws thinner. Then, assuming the economy reaches a point of stability or at least predictability, more listings will appear, and he expects a rebound will be underway by September.
“Even though you’ve got an unemployment rate around 20-21%, the second home people coming up from Boston haven’t been affected. And the retired people haven’t been affected,” Roche said, adding that if those people had been thinking in the past about buying property in the Lakes Region, they’re thinking about it even more now.
“The big unknown is, how long is it going to continue? But people are still out there looking. People are still going on with their lives.”