In Upper Valley, Plenty  Of Buyers, but Few Sellers

Valley News Business Writer
Saturday, April 21, 2018

Lebanon — Real estate agent Carol Robert has a new way to sell homes to out-of-town house hunters.

Via FaceTime.

The Lebanon real estate broker walks around the house using the FaceTime app on her iPhone to give clients a live video tour while she narrates the home’s features.

“They don’t have time to wait until the weekend to get here,” Robert said. “They have 24 hours before the seller gets two to three offers.”

That means they also have to use FaceTime to submit an offer if they’re impressed by the house they’ve only seen remotely, Robert said.

“I’m off to do one right now,” she said last week.

The Upper Valley real estate market currently is facing one of the widest disparities between the number of people wanting to buy homes and those willing to sell them.

Demand for homes from buyers is far outstripping the available number on the market, making it a seller’s dream.

And a frustrating one for buyers.

The number of homes for sale in the four-county Upper Valley region during the first quarter of 2018 is 25 percent less than a year ago, while the average sales price has increased nearly 8 percent, according to data compiled by real estate firm Four Seasons Southeby’s.

In eight locales within the heart of the Upper Valley — Lebanon, Hanover, Hartford, Thetford, Canaan, Lyme, Enfield and Orford — the number of homes for sale during the first quarter is 19 percent less than last year, while the median sales price is up more than 12 percent.

Real estate agents say they can’t recall a time when the balance between supply and demand has been so far out of whack.

This is especially the case in the core communities of Lebanon, Hanover and Hartford, where house hunters who want to be close to such major employers as Dartmouth-Hitchcock Medical Center, Dartmouth College, Hypertherm and FujiFilm often focus their search.

“We’re having 35 percent more sales and 40 percent less inventory,” said Bruce McLaughry, president of Four Seasons Southeby’s in Hanover. “That’s pressure.”

In Grafton County, median home sales prices have gone up about 9 percent to $207,000 during the first quarter, compared with a statewide increase of 6 percent to $260,000, according to New Hampshire Realtors, the state trade association of realtors.

Pending sales in Grafton County — those waiting to close — have shot up nearly 20 percent compared with 3.7 percent for the state, according to the group.

The median price for a home sale in Sullivan County — where the population has declined 1.7 percent between 2010 and 2017 — rose 3.7 percent during the first quarter to $152,500.

The strong economy, low single-digit unemployment and still historically low interest rates are driving buyers into the market, brokers said. But putting a home on the market, even in a rising market, is a more infrequent occurrence for sellers because it usually involves life-changing transitions, such as relocating to a new job out of the area or retirement, leading to an imbalance between supply and demand.

The demand for homes is sparking bidding wars, even in outlying towns such as Canaan.

Connecticut resident Bob Souza and his wife, Catherine, closed on March 29 on a two-bedroom, 2¾-bath ranch-style home for $275,000, beating out at least one other offer.

The Souzas bought the nearly 2-acre property as a retirement home. Souza’s brother, a Connecticut contractor, and his brother-in-law, who runs Martin’s Mechanical Plumbing & Heating in Enfield, came along on the walk-through “so we could act quickly.”

Souza said it took six months of looking within a 20-mile radius of Canaan and scanning “almost 100” ads on Zillow and “drive-bys on about 30 homes” and finally walk-throughs on at least a half-dozen before they found their “forever home.”

“Coming from Connecticut, the presumption is that the property value would be lower, so it would be easier to swallow,” he said. “That turned out to not to be the case.”

That’s because Souza expects to sell his Meriden, Conn., home for $200,000 or less. “Even though this is Connecticut, it’s not Greenwich,” but he said the price he’s paying for his home in Canaan “reflects the area has become more attractive.”

Enfied real estate agent Vanessa Stone, who worked with the Souzas to find a home, said, “when you step outside to towns like Enfield and Canaan, the availability becomes better than in Lebanon … but houses can go quickly in Enfield and Canaan still.”

Jennifer Bellows, residential property manager at Dartmouth College who assists incoming faculty and staff to navigate the Upper Valley real estate market, said it’s not unusual to have people renting an apartment for more than a year before finding a home to buy.

“Especially when they are trying to find something that is walkable,” Bellows said, noting “it took me a year and a half. But I’m picky.” (She bought in Lyme.)

Price shock is something Deeparnab Chakrabarty, an assistant professor of computer science at Dartmouth, is very familiar with. Chakrabarty moved to Hanover from Bangalore, India, in March of last year and began his house hunting in earnest in October. In the meantime, he, his wife and 5-year-old son have been renting an apartment in Lebanon.

Chakrabarty wants to move to Hanover so they can enroll their son in the Dresden School District, where they can walk to school and work. But even though they have set a budget of $500,000 and have looked at nine homes so far, the only affordable ones they have found are in Etna, which puts school and work beyond walking distance.

The family has suspended its search and enrolled their son in a private school and will wait it out in the hope that something might open up closer to where they want to be down the road.

“I was unprepared for the rates,” Chakrabarty said. “I did not expect a town with less than 30,000 to cost this much. It did put me off quite a bit.”

On the Vermont side of the river, the supply of available homes is even shallower. The number of homes for sale in Windsor County fell nearly 31 percent during the first quarter from a year ago to 550, according to VermontRealtors, the state’s trade association.

At the same time, the median sales price for a home rose 2.4 percent to $215,000.

Orange County is experiencing a similar crunch. Active listings dropped 35 percent during the fourth quarter to 147, while the median sales price jumped more than 13 percent to $221,000.

And the market might not shift back more favorable to buyers anytime soon, said David Donegan, a partner in the Woodstock and Hanover real estate firm Snyder Donegan.

“The end of the second quarter is going to say a lot in determining how the year will turn out,” Donegan said.

As of April 1, his newsletter notes, there were only 44 homes actively listed in Woodstock, compared with 76 at the same time last year.

In Hanover, the median price has soared 50 percent to $757,000, compared with $507,000 in the year ago, according to an analysis by Snyder Donegan.

Donegan thinks part of the reason for the paucity of listings has been the “long and quirky winter, and that’s been hampering things.” The spring is generally when houses are put on the market as families get ready to sell in time to move over the summer before school begins again in the fall.

Given the fierce demand for homes, logic would suggest that more sellers would be coaxed off the sidelines to take advantage of the rising prices being offered. But real estate brokers say it just as often has the opposite effect, holding back homeowners from putting their homes on the market because they realize they are going to be facing headwinds as buyers themselves.

“People aren’t selling their houses because they know if they sell to upgrade or even to downsize into a new home, then the pricing is going to be crazy,” said Robert, the agent who sometimes FaceTimes with clients and is the owner of Housing Solutions Real Estate in Lebanon. “It’s a stampede getting into a house. I’ve never seen this.”

The inventory of available homes for sale is down nearly 40 percent from three years ago, McLaughry estimates, and has been decreasing at a rate of between 8 percent and 9 percent each year. “Those are pretty consistent trends,” he said.

As available homes become scarcer, people are forced to live beyond the four-county Upper Valley and to endure long commutes typical of those taken by suburban residents in metropolitan areas.

“There are people right now driving from Meredith, N.H., to work at D-H,” said McLaughry, referring to a drive that would take close to 90 minutes. “There are people coming down from Montpelier.”

Moreover, the further down the pay scale, the more difficult it becomes to find affordable housing in the Upper Valley.

The situation is especially acute with so-called workforce housing aimed at people and families earning at or below the median household income level, which ranges between $54,000 to $58,000 for Windsor, Orange and Sullivan counties and $89,000 for Grafton County, according to census data.

“Many of our production employees have to room with three or four roommates just to afford reasonable housing in the Upper Valley,” Sue Cunningham, senior human resources generalist at FujiFilm Dimatix, an inkjet-head manufacturer in Lebanon, said via email. “Many of our younger employees commute from outside the Upper Valley because they cannot afford to live here.”

John Lippman can be reached at jlippman@vnews.com or 603-727-3219.