Where the real estate bargains are | Local News
When it comes to real estate, Rick and Jenn Kelly benefit from their entrepreneurship, work ethic, and ability to spot diamonds in the rough – and their ability to grab them before anyone else.
Purchasing, polishing, and reselling condominiums in Laconia, Gilford, and Meredith between 2003 and 2007 enabled the couple, now in their early 40s, to build a 19th-century colonial building.
Today they’re looking for sleepers – money making opportunities in the $ 200,000 to $ 400,000 range, including condos that others may think are dog-eared or that require work, time, and money – goods that are in short supply.
For the Kellys and others, fixer uppers are a dormant gold mine. And they can be the last bastion of affordability in a seething real estate market where properties are selling quickly, usually above asking price, as home prices continue to hit record highs.
“It’s so competitive now. We’ll close as soon as the seller wants, without any contingencies or requests for repairs, he said. It’s a strategy he uses to defeat shoppers from southern New Hampshire and states to Washington, Oregon and California who are fleeing more expensive or less desirable locations in favor of open spaces and bargains in central New Hampshire.
The Kellys also pay cash, mostly profits from previous transactions. “This is the only way you can now compete with supply and demand,” said Kelly. “Inventory is low and prices have gone crazy in the past year and a half. People come here and still find these houses a bargain, even with the inflated prices. “
Welcome to the new world of residential real estate after COVID. Home buying – once a prudent, less pressurized, and leisurely hunt – is now at breakneck speed without much time to think as the stream of paying, waiting buyers hoping to move to New Hampshire is ready. It’s a boon for sellers, but often a confusing and disappointing experience for buyers who don’t have a lot of money to spend.
“It’s literally on fire. Houses are being offered above the asking price, ”says Frank Roche, founder of Roche Realty in Laconia. There aren’t enough homes for buyers. New offers that have slowed down to a trickle are gradually increasing. Homes in Gilford, Meredith and Alton are being snapped up quickly, and buyers are now increasingly turning to Laconia, Franklin and Tilton, as well as surrounding towns in the Lakes region like New Hampton, Plymouth and Rumney, Roche said.
For more than a year before COVID hit in spring 2020, buying a home in the lakes region was fast-paced and competitive. There were bidding battles and comparatively few choices in the lower to mid-range price ranges, while lakeside luxury and properties with desirable views hit stratospheric highs. Then came the pandemic and the exodus of people from populated areas brought out-of-states from more expensive cities and suburbs throughout the northeast, particularly Massachusetts, Connecticut, New York, and New Jersey. A primary or secondary home in relatively rural, safe, affordable, and hassle-free New Hampshire has become a coveted commodity. That means homes that used to be passed over for something better are given a second and more serious look, according to real estate agents.
“The inventory is very low and people are buying what they can, including these older homes,” said Chris Adams, an agent at ReMax Bayside. In Laconia, which has an abundance of homes dating from the early 1900s, 17 single-family homes were sold last week, 35 of them under contract, compared with previous years when 100-130 were on the market at a time, Adams said. “Now 20 to 30 people come to an open house and there are six to twelve offers.”
“Usually you want a distressed property that you can turn over at the right number. It’s getting harder and harder to find real estate for these investor pinball machines, ”said Kevin Shaw, associate broker at Roche Realty in Laconia, who helps the Kellys find bargains. The couple bought and sold two Fixer tops in the past 15 months.
Sky-high demand and a drought in available housing is a scenario that is crowding out first-time, elderly, and low- and middle-income buyers in a state that has long struggled with a shortage of affordable housing. On the high end, the price is less of a sticking point.
“I feel bad about younger shoppers who don’t have a lot of money” or the ability to increase their listings, especially with a bunch of others standing by to outbid them, Shaw said. “It’s the most competitive and weirdest thing I’ve ever seen” in 22 years in real estate.
People leaving areas in and around Boston, Hartford, and New York City “look at the value up here and say, ‘What are we waiting for?’ People in southern New Hampshire share ideas, ”Shaw said. With its history of tax breaks, New Hampshire has become a mecca for retirees and near-retirees. Some buyers who sold the home for $ 200,000 30 years ago are splitting the proceeds to buy a home in New Hampshire and another in Florida or South Carolina, he said. “This has been happening for two to three years,” Shaw said, but it has been sped up because of the pandemic. Working remotely allows many home buyers who still have a job to live far away from the office, which also increases demand.
It’s difficult when you already live and work in this area and don’t have the money to sell your more expensive home elsewhere.
“If we hadn’t pulled the trigger that day, it would have been under contract within 24 hours,” said Kelso Honeycutt, a Laconian native who recently closed a New England-style house in downtown Laconia after leaving the country had combed parts of the lake region for an older house with character and charm. “It was a roller coaster ride and crazy at the same time.”
Honeycutt, 30, and girlfriend Amber Marceau, 25, rented in Meredith and Sanbornton while touring six to eight homes in person, “and billions online,” he said.
Like many buyers, they competed with willing buyers who could offer more with FHA funding than ever before, and without the padding to go higher. And they had little time to make up their minds. “When we looked at other properties, it was already under contract when we thought about it” – sometimes within hours, Honeycutt said.
According to Multiple Listing Service data from the Northern New England Real Estate Network, between January and May 2021, most homes that did not require work and were built between 1700 and 1940 sold for $ 4,000 to $ 20,000 above asking price. By comparison, many who needed rehabilitation cost $ 8,000 to $ 20,000 less than the list number.
Last week, Honeycutt and Marceau moved into their first home: a 2,700-square-foot Victorian-era single-family home in southern Laconia that they bought for $ 264,900. It has three bedrooms, two bathrooms and a sunken pool. In addition, they paid less than the seller’s asking price – a stroke of luck that rarely occurs today, especially when buying with financing and the usual down payment.
“We’re kind of an anomaly. We picked it up. We didn’t have 100 grand to throw around, ”said Honeycutt. “The saleswoman accepted our offer because she liked us, I accept.” Nowadays he said: “If you want something right away, you have to pay cash, ask too much or leave a good impression with the seller.”
You will update the kitchen at some point, but it is usable as it is. The interior needs a new coat of paint. “We could live in it and be happy for the next 10 years,” said Honeycutt.
Real estate agents in the Lakes Region say older homes in need of upgrades and cosmetic improvements are often viewed as landmines or money pits that scared off buyers with no time, patience, construction skills (or friends and relatives they have) or appraisal experience , older property.
But they have become a corridor for opportunities in a frenzied market where newer, move-in homes sell for up to $ 100,000 above what sellers charge and sometimes with no home inspections, according to real estate agents. In some cases, shoppers from far away places make cash offers that cannot be seen by simply looking at photos, floor plans, and dates online, they say.
It’s a risky practice that no one recommends – unless the buyer is a savvy, experienced investor or a building trader. With older homes, inspection is everything. It is important to get the perspective and rough estimates of people familiar with construction costs.
It’s easy to underestimate the cost of renovating an older building. Over the past 18 months, wood “doubled, steel tripled, and equipment increased 50 percent because of the cost of materials,” Shaw said. The Kellys, who own a local carpet cleaning business, do a lot of the work themselves and have an idea of what they can’t. Due diligence is essential for everyone to know what you’re getting into – what to do right now and what to put off.
“Unless you’re a seasoned investor or contractor, it’s always a good idea to get a home inspection done,” said Adams. Doing homework when you’re a potential buyer includes comparing communities, neighborhoods, school systems, and reading notes on town meetings, he said. Many are paying for a radon test that has no proven health risks, Adams said. But almost all of them skip tests for lead paint, which can pose a significant health risk to young children, he said.
Foundations, roofs, wells, windows and sewage treatment plants can be important things and assessing their condition is essential, said Liz Swenson, an agent for Berkshire Hathaway – Verani Realty in Belmont. Peeling paint, rotting wood, and water damage can prevent buyers from getting FHA, VA, NH Housing, or rural development loans, Swenson said.
“Everything has to be in your comfort zone,” said Kelly, who buys condos to renovate and resell, said usually within six months. “If a structure is solid and you have a good spot in a good location, you’ll be fine,” he said. “It’s always a good investment when done right. Real estate is a great investment when you can get into the game as young as possible. It’s a savings account that you live in. “
The Sunshine Project is funded by grants from the Endowment for Health, New Hampshire’s largest health foundation, and the New Hampshire Charitable Foundation. Roberta Baker can be reached by email at [email protected]