03-09 RE GilfordChartsforSun

If you own a single-family home in Gilford, it’s an unequaled time to sell. It’s “list opportunity or missed opportunity” time. Let me tell you why:

Prices are peaking

In 2018, the median "closed" price for single-family homes in Gilford was the highest since 1997, which is as far back as data go in the New England Real Estate Network Multiple Listing Service database.

In other words, sales prices for Gilford single-family homes are the highest they’ve ever been.

Prices won’t climb forever. Don’t just take my word for it; ask someone who didn’t sell at the previous property value peak in 2006. Gilford single-family home values subsequently plummeted 30 percent over the next three years (that’d be like a $92,100 loss in value from today’s median price) and sellers had to either absorb the loss or wait with regret for well more than a decade for prices to recover.

Let me make a very simple case for why I think home prices are more likely to stall or decline than continue to climb much further.

Let’s compare two factors: Gilford home prices and real median household income in New Hampshire and Massachusetts, where the preponderance of out-of-state buyers come from.

Gilford house prices grew 115.2 percent between 1999 (the market bottom) and 2017 (the most recent year for which income data are available).

During that same timespan, median household income in New Hampshire and Massachusetts grew just 10.04 percent and 12.75 percent, respectively.

In short, home price growth in Gilford is far exceeding income growth in New Hampshire and Massachusetts. Add the chilling effects recent interest rate hikes have had on homebuyers and it becomes difficult to imagine that home prices will somehow continue to magically and indefinitely outpace earnings at the rate they have been.

Think about it: How do you buy a house you can’t afford, now that banks aren’t offering home loans to just about anyone, including unqualified buyers, as they did during the subprime mortgage crisis in 2006? You don’t.

Buyers become forced to wait until: a) prices drop, b) income skyrockets, or c) lenders repeat the mistakes of the past and offer mortgages that allow buyers to purchase more home than they can realistically afford.

That’s why I think the divergence between home price and income growth suggests a coming correction in property values.

Here’s another way to drive the point home: Household income grew 10 to 12 percent in our two biggest buyer markets (New Hampshire and Massachusetts) over 18 years, 1999-2017. Median Gilford house prices, on the other hand, grew more than 14 percent in just one year, between 2017 and 2018.

So if you want to sell successfully, maybe make this the last long, brutally cold winter you have to endure in New Hampshire. It’s an unparalleled time to list, based on prices alone ... before they inevitably drop and you get stuck.

Days on Market are Plummeting

If high prices alone aren’t enough to convince you, consider another key indicator: the blistering pace of “Days on Market” required to sell.

In 2018, the median number of days on market for Gilford single-family homes was just 42. With the close exception of 2017 (40 median days on market), that’s the fastest pace in at least 21 years.

The number of days on market tends to be inversely proportionate to buyer demand. A low number of days on market — which we clearly have now — suggests a high number of consumers with high motivation to buy.

Low inventory gives you a head start and advantage. In addition to the highest home values and one of the fastest-selling paces in more than two decades, Gilford currently has an extremely low number of houses listed. Today there are only 38 single-family homes listed in Gilford, a town the U.S. Census Bureau estimates to have a population of 7,156 people, and 4,312 housing units.

A low supply of for-sale homes can create serious leverage for sellers. Buyers are more willing to overlook perceived shortcomings in a home (like dated appliances or no walk-in closet) when inventory is tight and there’s less competition for their fickle affections. When there are fewer properties to compete with, the result can often be multiple offers, stronger negotiating position and higher prices for sellers.

By listing now (yes, in March) you can get a head start on the competition and stand out to buyers who want to begin enjoying a new Lakes Region home in time for summer 2019. Remember, many closings take 45 to 60 days to complete.

Interest rates are down, for now. Yes, interest rates have climbed, paralyzing many buyers who had grown accustomed to abnormally low rates, but there’s good news. According to Frank Nothaft, chief economist for CoreLogic, a leading property analytics provider, "Fixed-rate mortgage rates have dropped 0.6 percentage points [sic] since November 2018 and today are lower than they were a year ago. With interest rates at this level, we expect a solid homebuying season this spring."

So please take note if you’ve been waiting for a great time to sell. It’s now. Prices are at their apex and days on market have plummeted. Inventory is low, giving sellers who list now a head-start advantage before inventory and competition inevitably increase.

Give me a call if you’ve considered selling your house in Gilford and you’re curious what your home might sell for in this seller’s market. It might be the best time to sell a Gilford single-family home in over 20 years, and homeowners who missed the opportunity to sell at the previous peak had to wait 12 long years for home values to recover. It’s truly “list opportunity or missed opportunity” time.

Brent Metzger is a Realtor® with Roche Realty Group. Contact him at 603-229-8322 or visit www.LakesRegionHomeSeller.com.

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