Baby-boomers helping to drive local real estate market

Here come the baby-boomers.The 50- and 60-somethings are looking for lifestyle changes and toward retirement, and they're looking at Mount Washington Valley.While the local real estate market is showing signs of slowing from its furious pace of the past few years, Realtors don't expect the slowdown to be as noticeable or as significant as in other areas.Baby-boomers are one of the reasons."For us this year, I think it will be a little bit different from the big metropolises," said Antonella Bliss, of RE/MAX Presidential in North Conway and president of the White Mountain Board of Realtors. "We have a lot of second homes, and right now we're catering to a lot of baby-boomers. They are selling the big homes that they don't need anymore, so they are purchasing maybe small properties in the Florida area and many are still interested in having property up here in the valley to spend part of the year."I think we have catered and will continue to cater to baby-boomers out there looking to purchase," Bliss added. "The year started slow, but I want to believe it won't stay this way. I think we'll still see good activity through 2006."Because the market is slowing, Bliss said there is a "perception" of a big price decrease on the way."In reality, the forecast of the chief economist of the New Hampshire Association of Realtors is that he thought there will not be any bubble that bursts, and that instead there will be a price adjustment that is more like a normalization of the market, which is a good thing. That's why we're seeing some price reductions coming through. Prices got too high and people were priced out of the market, and that's why we have normalization."Bliss said interest rates remain attractive. Interest rates on 30-year fixed mortgages are between 6.125 percent and 6.25 percent."I think interest rates are still very good," she said, "but because there is a perception that there will be a big price decrease, people are waiting to see what happens. The forecast is that interest rates will still be below 7 percent by the end of 2006. If that's true, this year is still going to be strong."Jim Lyons, of Select Real Estate in Conway and past president of White Mountain Board of Realtors, said he expects to see a "softening" of prices this year."There will not be the level of appreciation that we've had in the last 12 to 24 months," Lyons said. "There will be some flattening out. But there's still activity. Reasonably priced properties will sell. There's still demand, but buyers are more sensible and they see less urgency. I think you'll see days on the market increase, and, for sellers, things that didn't make a difference before as far as how they showcase their property will become more important. When there's more competition, sellers are going to have to add sparkle to their property and give it some appeal."Lyons believes the local market will stay stronger "than it ordinarily would with a regional softening," and he points to two factors."One is demographics," he said. "There are a lot of 50-plus people from southern New England who are getting to the point that they're saying, 'Now I can retire, I've got cash, I can sell my property back home for pretty good money.' And this is an area where a lot of those 50-plus people want to live."And then there is what Lyons calls the 9/11 effect."People still don't feel secure," he said. "Mount Washington Valley and the lifestyle we have is a pretty safe place. That's what's attracting them here."He added, "Usually when the New England market softens up, we go down and we go deeper and stay down longer. I don't think it will be that way this time because of demographics and Sept. 11. It's regrettable that people don't feel secure anymore, but our lifestyle is very attractive to people these days."Peter Pinkham, of Pinkham Real Estate in North Conway, has a similar perspective on the local market."I don't see us as really being off this year," Pinkham said. "It just may take longer to sell properties, but I think the total is not going to be far off. There are a lot of reasons why people are continuing to come to this area. It has a lot of advantages that other areas don't have. As a result, I think the market will continue strong in this area."Pinkham cited several advantages."People still have a real desire to get out of the cities," he said. "There's a little bit of concern about the safety of the cities, so they're looking to get a toehold in the country someplace. Another is that the stock market has not been all that favorable over the past several years and real estate has, so they think they should be in real estate."Also, the current fitness boom has kept older people in better condition, and they refuse to go to Florida and lie on the beach," Pinkham continued. "They want to do something, so they come to an area where there's lots to do. There is also the factor that the computer enables people to live just about anywhere they want, at least in some jobs, and those people are picking areas where there's a lot to do, like this area."Pinkham said the market was "a little quiet" in December but picked up in January."There's no question that it's a little flatter than it was in terms of activity," Pinkham said. "Part of the problem is there are a lot more properties on the market, so activity on any one property is not as great as it was. But I don't see a real falloff in the numbers of inquires. There have not been as many people in the valley because of warm weather and ski conditions, but we haven't shown any falloff in our inquires."Pinkham sees prices, and the market in general, as remaining fairly stable "unless Congress does something to screw it up." And, he added, "They're making noises about doing just that. They're talking about monkeying with mortgage interest deductibility; they're talking about eliminating vacation homes. If that happens, it's going to be a severe blow to the valley. I would personally put a plug in for people to write to their congressmen and senators and say they're opposed to that."Skip Smith, of Coldwell Bank Wright Realty in Conway, said he is pleased with "activity levels" at the end of December and through January, but there's no question that activity will be "a little more sluggish" than in recent years. But, he said, "I don't think we'll see any of this bursting of the bubble stuff. I think that's been overblown, from my perspective. It's just not the same economic conditions as what we had in the late 1980s and early 1990s. It's just a stronger overall economy."We've got a beautiful place here," Smith continued. "And we have the baby-boomer generation coming along. They've formulated some capital, in some cases they've got their kids out of school, and they're looking for some investment in real estate that will generate some benefit, some lifestyle benefit."Smith said property values are "still considered very reasonable compared to other locations in the Northeast corridor." One client looking to relocate from Pennsylvania has a $400,000 home there and said he could buy basically the same home here for $250,000."That family now has a vehicle, which is the appreciation on their home in Pennyslvania, which gives them an opportunity to think about, 'Hey, we can make a move. Let's go to a better lifestyle, live the American dream.' We still have a piece of that here."Smith said many of the buyers locally are looking for places that can serve as vacation and/or early-retirement homes."People are coming up who have good years left, and they want to go skiing and hiking and enjoy the shopping we have here," Smith said. "People consider this a good environment for retirement living. Those people are going to continue to come as the baby-boomers age, and they will be the backbone of what keeps the market moving along."The downside of the market, Smith said, is the dwindling opportunity for homeownership for local workers and first-time buyers."As this market has evolved, it's really difficult for people who have grown up here and are trying to work here, with the wages offered in this area, to make a dent in the first-time home-buyer market," Smith said. "Even a couple with average-paying jobs are finding it difficult to salt away money for a down payment. They get squeezed because they're paying high rent so it's hard to save money, and with the amount of money they can make working at the kind of jobs that are so common in this area, they come up a little short finding something we would call, quote, unquote, affordable housing."Smith doesn't believe much effort has been made locally "to find ways to be creative to get affordable housing in here.""We talk and talk, and it's something people would like to see happen," Smith said, "but on the action side, it's difficult. We need to set some land-use policies that would help to foster that, and it's not always easy in these towns to do that."Smith said there are some properties that could potentially serve the workforce or first-time-buyer market."We're going to try to take some of the properties here and get some creative programs maybe utilize N.H. Housing Finance Authority or rural development in town," Smith said. "There may be interesting ways to meld those programs together which may be able to sneak a few people into those houses."Many new homes in a wide price range may soon be coming on the market.Conway Public Works Director Paul DegliAngeli said town staff has reviewed or received applications for subdivisions totaling more than 300 homes."Some are in the concept phases, some are actual applications in the works, and some are applications that have been approved but are not yet built," DegliAngeli said.DegliAngeli said those homes run the "gamut" price-wise "from a proposal to add a significant number of units to Lamplighters (mobile home park) to areas that have mountain views where the developer has indicated these would be luxury home sites."Low interest rates and a booming real estate market are what initially spurred developers, DegliAngeli said. But, he added, "Whether all of these get built because things may be slowing down, we'll have to see."