Second-home market heralds change at The Weirs

The burgeoning real estate market is changing the face of The Weirs and with it the traditional character of the most storied resort on Lake Winnipesaukee.

Some 1,200 dwelling units that have been approved or are being considered by the Planning Board since 2003 are characterized as "second homes," most of them planned for The Weirs. At the same time, the pace of converting vacation rentals — cottages, hotels and motels — at The Weirs to condominiums has quickened.

There are nearly a dozen residential developments underway or planned at The Weirs, which altogether would add almost 1,100 single-family homes or condominium units. Akwa Vista and Akwa Verdant, the residential components of the Akwa Soleil complex on either side of Route 3, consist of 210 single-family house lots while Langley Cove on Weirs Boulevard, a condominium complex still in the planning stage, counts 375 units. Another 153 units are divided among three projects planned on White Oaks Road while two developments on Endicott Street East include 214 units.

Meanwhile, the Hi-Spot Motor Court, St. Moritz Terrace Motel and Chalets, LuAnn's Motel and Cottages, Blue Hill Cottages, Holiday Bay Cottages and Remember Me Cottages — all on Weirs Boulevard — are among the most recent rental properties to be converted to condominiums. Brady Sullivan Properties of Manchester have purchased, converted and resold nearly a half a dozen properties in the last two years.

The conversion of seasonal vacation rentals to year round condominium units has been a feature of recent real estate booms. Russ Thibeault of Applied Economic Research (AER) said that during the 1980s a number of properties on Weirs Boulevard, particularly those fronting on the lake, were converted. "This is the second wave," he said.

The investment in vacation property at The Weirs presents owners of rental accommodation with the choice of improving their property to compete in an increasingly upscale market or cashing out by selling to a condominium developer. Thibeault, whose firm appraises property, said that "as a rule of thumb, condominiums appraise at between three and five times the value of rental lodging."

Condominium units along Weirs Boulevard are listed for anywhere from less than $100,000 for a one-bedroom unit in a converted motel to more than $400,000 for a two-story townhouse with two-bedrooms and deeded dock.

Fred Clausen, president of the Weirs Action Committee and co-owner and operator of Proctor's Lakehouse Cottages, chose to invest heavily in improving his property by converting motel rooms to one and two-bedroom units with kitchenettes and rehabilitating his cottages. Although committed to offering vacation rentals, he said that "I'm building to condominium standards."

Clausen expressed concern about the impact of the construction of second homes and conversion to condominium units. "It's not going to happen overnight, but in five or ten years The Weirs could be known for condos, not rentals."

Clausen fears the change could have an adverse impact on the attractions that distinguish The Weirs. "Second homeowners don't take their kids to the arcade, if they have kids, or go out to eat," he said. "They entertain at home." Thibeault not only concurred, but also said the impact is already being felt. "All the recreation attractions we have studied have flat or declining revenues," he said. "We are pricing the blue-collar, working family out of the regional tourist market."

Thibeault noted that second-home buyers represented a relatively older and affluent market able to afford the premium prices commanded by property on and around the lakes. The 149 lots in the first phase of the Akwa Soleil project range in price from $129,000 to $350,000, with about half listed at more than $200,000.

Many buyers, Thibeault suggested, were purchasing retirement homes or vacation homes to which they ultimately planned to retire. The Lakes Region Planning Commission reported that the number of households in the region receiving retirement income jumped 41 percent between 1990 and 2000, from 5.936 to 8,392, to represent one of every five households.

Retailing and services, Thibeault projected would benefit from the influx of second-home owners and retirees. "Occupancy is the key," he said. "Each year more and more of the second homes are occupied for more and more of the year. They're not just here for the summer, but every weekend year round." Already he said that his research indicates that visitors, many of them second-home owners, account for between 25-percent and 40-percent of retail spending in the region.

Teresa Pinto, executive director of the Greater Laconia/Weirs Beach Chamber of Commerce said that the change underway would prompt a rethinking of "how to market the area for tourism." She said that the robust demand for waterfront property has at one and the same time reduced the inventory and raised the price of rental accommodation.

Pinto suggested that rather than a steady flow of families spending their vacation and visiting the attractions at The Weirs the hospitality industry would increasingly cater to events. Apart from Motorcycle Week, Pinto expected the tourist industry to increasingly piggyback on events like Soul Fest, the Christian music festival slated for Gunstock, the Timberman Triathlon, Nextel Cup and similar events that drew large numbers to the region. "People are very loyal to events and will return year after year," she said. Pinto said that since Concord abandoned "Race Fever," its celebration of the Nextel Cup Race at New Hampshire International Speedway, the Lakes Region had an opportunity to draw from the event.

Thibeault suggested that perhaps the most beneficial effect of the robust second-home market will be its fiscal impact. "The lowest equalized tax rates in the Lakes Region are directly related to the number of second homes," he said. "Alton, Gilford, Moultonborough, Meredith, Center Harbor all have relative low equalized tax rates." He explained that the positive fiscal impact was the result of the appreciating value of properties occupied by residents who placed relatively few demands on municipal services, particularly the school system.