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Realtors see signs of a stabilizing market

REAL ESTATE: Low interest rates fuel demand, but tight credit market still makes deals hard to come by

  • Russ Armstrong, Peterborough<br/><br/>(Staff Photo by Dave Anderson)
  • Russ Armstrong and his wife, Stephanie, who is holding their granddaughter, Ella, with a collection of belongings from their former home that they're sorting through as they move into their smaller home in Peterborough.<br/><br/>(Staff Photo by Dave Anderson)

Low interest rates and a willingness of sellers to be flexible have boosted the local housing market, according to area real estate agents. But unless people have a top credit rating, they may still find it difficult to purchase a new home.

“We’re seeing a convergence of pent-up demand, both to sell and to buy,” said Andy Peterson of the Petersons Real Estate in Peterborough recently. “People are being careful about their asking price. If they get a reasonable offer, they tend to respond positively.”

Marc Tieger of Tieger Realty in Jaffrey said much of his activity has been in the lower price range. The majority of sales this year in Peterborough, Jaffrey, Rindge, New Ipswich and Hancock have been at prices under $200,000, according to data Tieger provided from the Northern New England Real Estate Network.

“The middle range is dead,” Tieger said. “Some things are selling. Are a lot of things selling? No. Is it better than it was six months ago? Yes.”

Ken Moller of the Mollers Realtors in Hancock said activity has been strong in the range of houses below $350,000, but weaker for higher priced homes.

“Nowadays, $350,000 is a pretty good price,” he said. “Prices have come down about 20 to 25 percent from their high. They’re stabilizing.”

Moller said interest rates have never been better in the 40 years he’s been in the real estate business.

“They are incredibly low, between 3.5 and 4 percent,” he said.

Both Tieger and Moller said home loans can be tough to come by.

“Credit score has become king,” Moller said. “If your score doesn’t meet the standards, you’re in big trouble.”

“Mortgage money is very inexpensive,” Tieger said. “But your credit line has to be right up there.”

Peterson said many of his customers are moving from one home to another, even if they had to sell their home for less than they expected.

“A lot of people who can by a home already own one,” he said. “There are opportunities to move to a place you’d like better. In some cases, you make up more on the buying end than you lose on the selling end.”

Two success stories

Russ Armstrong of Peterborough and Adam Caragher of Wilton both fit the category of homeowners who wanted to make a change and managed to do so in a tight housing market. Armstrong and his wife, Stephanie, sold their 3,600 square foot home in Gilford and recently moved into a 2,200-square-foot home they had built on Monadnock Lane. Caragher and his wife, Stephanie, moved from Fitzwilliam in order to get cut down on his commuting time to his job as assistant principal at Merrimack Middle School.

The Armstrongs were fortunate. Their home sold quickly.

“The house was too big for us,” Armstrong said. “It wasn’t elder friendly. We wanted to be close to our son and his family in Wilton. We now have a beautiful granddaughter.”

Armstrong said they set a fair price for the Gilford home in July 2011 and it was still on the market for about nine months.

“We were in an enviable position because we didn’t have to move,” he said.

But once the sale was complete, the Armstrongs had about three months before the buyer needed to move in. They hadn’t been pleased with the homes they looked at in the Monadnock region, because they wanted a home where they could live comfortably on one floor, with the upstairs available for guests or family visits. They ended up hiring contractor Dick Messina to build for them in a new development. Meanwhile, they lived for several weeks last summer on a boat docked on Lake Winnepesaukee.

“That was an interesting time,” Armstrong recalled.

He said they finally managed to find a short-term rental nearby, which allowed them to be on hand while construction work on the new house was going on.

“We could be here every day to participate in decisions,” Armstrong said. “That’s kind of critical.”

Now the Armstrongs are moved in and working on interior painting while they sort through all the furniture and belongings they brought from their larger home.

“Downsizing is a real challenge,” Armstrong said. “You’ve collected things that are meaningful to you. You don’t want to part with them. The reality is, you have to.

The Caraghers’ home went on the market in February 2010 and sat for 2 1/2 years. The couple eventually sold it for less than they had paid seven years earlier.

“We lost a lot of money,” Caragher said . “The renovatons and upgrades that we did meant nothing. We dropped the asking price by about 30K and sold it for less than that. It was definitely a frustrating experience.

The selling process was stressful, but in the end, it was worth it, according to Caragher.

“We were able to afford more of a house, with the interest rates where they’re at,” he said. “We were caught with a high interest rate. Now we’re in the threes. We ended up in a good spot. We essentially broke even on the deal.”

Caragher said they looked at a dozen or so houses in Lyndeborough, Wilton, Mason, Mont Vernon and Milford before settling on the home in Wilton. He said it was frustrating to be unable to move ahead with a purchase because they’d been unable to sell their home.

“A lot of houses that we liked came on the market and left,” he said. “We saw a couple we’d have loved to pursue. It was frustrating. We wanted to get out of our house and move closer.”

In the end, it all worked out.

“We got lucky,” Caragher said. “I’m really glad we were patient. It paid off. We’re very happy with our new home.”

Outlook for the future

Success stories of customers like the Armstrongs and the Caraghers could soon become more commonplace. The local real estate agents say things seem to be getting better.

Moller said this is the third recession he’s been through as a real estate agent and he expects the economy to rebound soon.

“They all last about five years,” he said of recessions. “We’re four and a half years into this one.”

“I think the key thing is that people are starting to feel that the economy is going to weather this and come back,” Peterson said. “People were hunkering down and doing nothing for quite a while. We’re starting to see that cloud lift.”

But Tieger sounds a note of caution.

“I’m working more. Deals are harder to put together,” Tieger said. “Financing is seemingly easy but there are lots of government regulations. We didn’t get into this overnight and we aren’t getting out overnight.”