Real Estate Q&A
Taking a look at residential market
How would you define the current real estate market?
Cathy Cambal-Hayward: It continues to be a challenging market for our sellers and wonderful opportunities for buyers across the board — from the first time home buyer to the empty nesters who are downsizing , and for those looking for a second home in the Monadnock region.
Heather Peterson: The local real estate market is coming out of the depressed state of the last few years. We, at The Petersons, saw an increased number of sales in 2013.
Marc Tieger: I don’t think the real estate market has stabilized yet. There is still far more supply than there is demand.
What are some of the major factors driving sales, and what factors will define the market for the coming year?
Cambal Hayward: The past year has seen a sharp increase in the number of homes on the market — which was unexpected — as inventory levels were dropping across the state. As we left December of 2013, there were a 170 single family homes (Peterborough, Hancock, and Dublin) on the market as compared to 129 in 2012. This is a 32 percent increase and something that was not expected. And our other towns in our region experienced similar increases.
Heather Peterson: Young couples starting families continue to come into the market to purchase their first homes. Older individuals need to downsize to smaller homes or condos, or to a retirement community. In areas of the country where the real estate market has already improved, there is buyer confidence to invest in a second home or to relocate for a “country lifestyle.” These factors will govern sales in 2014.
Tieger: The factors that should be driving sales are people moving here for jobs, retirees and people already here upgrading their housing. If the stock market undergoes a serious correction that might spur some investor activity.
Would you say inventory is higher than normal? If so, is this a sign of increased confidence, or is it a potential bottleneck?
Cambal-Hayward: With the increase in inventory, our sellers have to be as well positioned as possible in the pricing and the condition of their property — it is a very competitive market in this sense — and offers opportunities for buyers across the board.
Peterson: Inventory, in general, is slightly higher than normal. There are pockets of low inventory. Condominium inventory is low and with fewer distressed sales coming into the market, low end inventory is declining. Large family homes are not selling and antique homes, especially those in need of updates, are not currently in demand. Many sellers have delayed listing their homes until they feel the market has improved. Some have been waiting five years and cannot wait any longer for improvement.
Tieger: What is normal? Yes, it is higher than one would want and that’s why it’s a buyers’ market and not the other way around. Simple economics.
Real estate is booming in some parts of the country, but it’s been somewhat slow to rebound here. When do you believe we’ll start to see our more local market start to bounce back?
Cambal-Hayward: At end of 2012, we saw prices start to stabilize and we expected them to start to improve in 2013. We did see an increase in the median price, but not the improvement that we thought we would see.
Peterson: Where real estate sales are booming, the local economy is booming. There are new, well-paying jobs being created. This area has been losing employers and jobs steadily. We need new employers and new jobs to turn our economy around.
Tieger: With the amount of foreclosures and short sales decreasing, but are still occurring, it should be easier and quicker to sell a home. I’d like to think that by the end of the second quarter of 2014 there will be noticeable signs of recovery, but there’s nothing quantitative to support that.
We’re seeing interest rates rise as the economy begins to recover. What impact will rising rates have on local sales?
Cambal-Hayward: The interest rates remain at low levels and are helping to fuel the recovery.
Peterson: Higher rates will increase monthly mortgage payments and therefore lessen the amount of mortgage money for which a buyer can qualify. It will keep pressure on prices to remain low.
Tieger: Rising interest rates will cause people who are undecided about buying to make a decision.
What types of homes are moving quickly, and what’s still struggling to sell?
Cambal-Hayward: There is strong demand for homes for first time home buyers and investors. The mid and high end of our market has substantial inventory and it will take some time for this to become a balanced market — one where we have six months of inventory, which will place buyers and sellers on a level playing field.
Peterson: Properties that appeal to first time home buyers, downsizing individuals and couples, retirement homes and second home buyers are selling. Large family homes and homes in need of updates or with deferred maintenance are slow to sell.
Tieger: I don’t think anything is moving quickly. Remember, it’s the sellers’ motivation and ability to convey that will determine if a property sells and for how much. Flippers, bought at foreclosure and rehabbed, have been selling well, however.
What kind of shift have we seen regionally in the past year on median price and time on the market?
Cambal-Hayward: Median price has improved year over year and days on market has stayed essentially the same at 226 days. We are seeing fewer distressed properties coming on the market, which should continue to push the median price up.
Peterson: The market has not shifted. Average days on market remain the same and prices are not rising.
How does this winter compare to last winter, and how would you expect that to translate to the spring market?
Cambal-Hayward: This winter has been stronger than last winter — with the momentum carrying into the new year. This bodes well for our spring market.
Peterson: It is too early into the 2014 winter market to compare it to last winter. In spring, all sellers are optimistic!
Which towns have fared best in terms of sales and median price in the past year, and which towns can expect a strong 2014?
Cambal-Hayward: Our region fared about the same across the different towns.
Peterson: Towns with lower tax rates have fared the best in number of sales and sales prices. For first time home buyers, retirement buyers and second home buyers, the costs to own and to maintain a property are as important as the purchase price. Some towns have not adjusted their property assessments to reflect current market values.
What’s your best advice for someone looking to sell and/or buy in the coming year?
Cambal-Hayward: For sellers, our properties need to be competitively priced and shine when being shown. For our buyers, there is great selection of homes across all price ranges, and with historically low interest rates, it’s a great time to buy.
Peterson: Expect to sell or expect to buy at fair market value. Properties listed too high will not find prospective buyers and buyers hoping to purchase a property with a lowball offer will not be successful. For sellers, in a market with high inventory, the showing condition of your property is important. I don’t recommend remodeling the kitchen or baths but fix any leaks, remove clutter and keep the interior and exterior sparkling!
Tieger: If you’re a buyer there is no better time to buy. Interest rates are still at historical lows and the selection is good. If you’re a seller then consult with your Realtor. Determine together where you’ve been, where you are and where you want to go. And remember, “this too shall pass.”