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Upper Valley real estate still strong, albeit at arm’s length

Valley News Business Writer
Published: 5/30/2020 8:55:43 PM
Modified: 5/30/2020 8:55:41 PM

Maybe this is why Missouri is called the “Show-Me State.”

In a sign how the COVID-19 pandemic is rippling through the New Hampshire and Vermont real estate market, views of Twin State home listings on the website of Four Seasons Sotheby’s soared more than 1,100% in Missouri during the first five months of the year, according to data compiled by the Hanover office of the national real estate agency.

Echoing how northern New England saw a wave of homebuyers seeking the perceived safety of a rural place to live following the 9/11 terrorist attacks, COVID-19 appears to be having a similar effect, the data and anecdotal reports suggest.

Missouri, where views from unique visitors went from 229 in 2019 to 2,828 in 2020, is only the most pronounced example as home seekers from other states for Twin States properties have also shot up, including Washington (309%), Massachusetts (74%), California and New Jersey (59% each), New York (31%), Texas (19%) and Oregon (16%), the data shows.

“There are a number of dynamics going on here,” said Alan DiStasio, chief operating officer of Four Seasons Sotheby’s in Hanover. “Certainly COVID-19 has incentivized people who live in densely populated urban areas who may be looking for places with more open spaces to live. With millions of people working from home and a number of companies now realizing that’s doable, people are saying, ‘If I can work from home two to three to five days a week, maybe I don’t have to live so close to the office.’ ”

When it comes to the housing market, this is not a typical recession, according to real estate professionals.

With an estimated 20% of people unemployed and the country in the greatest economic downturn since the Great Depression because of the COVID-19 pandemic, some might expect that real estate sales would have collapsed and homeowners seen the value of their homes plummet.

That’s what happened in the Great Recession of 2007 to 2009, which started when the housing bubble burst, and home prices tumbled and took nearly a decade to recover.

But despite much of the economy still being shut down and business slowed due to the pandemic, the Upper Valley housing market has not — not yet anyway — gone into a nosedive, report local real estate professionals. While social distancing has led to new wrinkles in how homes are marketed and sold, the industry nonetheless has used technology to help overcome the hurdles.

Laird Bradley, owner of the Williamson Group Sotheby’s real estate agency in Woodstock, said that demand for homes, in part driven by out-of-state homebuyers, remains strong.

The issue, rather, he said, is a shortage of inventory. He currently has 60 properties for sale, of which 20 are under contract, compared with 100 listings and 10 under contract at this time last year. The increase in the ratio of homes under contract to homes listed indicates demand outstripping supply.

“In 2009 we went six months without a single arm’s-length transaction in Woodstock and surrounding towns,” Bradley said. “We are not in that kind of market.”

Without a doubt the real estate market took a hit in New Hampshire in April as a result of the business shutdown, according to data compiled by New Hampshire Realtors, the state’s association of real estate agents.

New listings of single-family homes for sale plunged 40% and pending sales declined 21% during the four weeks of April, the group reported. But the median sales price for a single-family home in New Hampshire increased 11.5% to $325,000.

“Higher unemployment and lower overall economic activity is likely to continue to constrain real estate activity in the new terms,” said the association, which has not yet released its report for May.

But preliminary indicators show some rebound in May, according to real estate professionals.

Total applications for mortgages “are up over 50% from this time period last year,” Cathy Murray, head of the home loan department at Mascoma Bank in Lebanon, said via email. She described applications for new mortgages as “relatively flat” with applications for refinancing to take advantage of the drop in interest rates as “making up the bulk of the increase.”

“Having the restrictions lifted in the past couple of weeks has really charged the purchase market,” Murray said, noting that “one local real estate broker listed eight houses on a Monday and had all eight under contract by the following Monday.”

That’s confirmed by Enfield real estate broker Vanessa Stone, of Vanessa Stone Real Estate.

“We are super-busy. There’s plenty of buyers, but inventory is low,” she said.

Stone, who handles a lot of listings in the Mascoma Valley, said May and June is the time of year she typically sees a rush in home sales as a new cohort of freshly minted doctors arrives at Dartmouth-Hitchcock Medical Center to begin their residencies.

But COVID-19 has necessitated changes in how they conduct business, she explained, from conducting home tours over FaceTime to Zoom conferences with clients, home appraisers and inspectors and attorneys.

“I’ve had closings in parking lots,” Stone said. “That’s a true statement.”

Indeed, Mascoma’s Murray said real estate attorneys have become “quite creative” in how they work through home sale closings under social distancing requirements.

For example, attorneys are representing clients at closing under “power of attorney” so “sellers do not need to actually go to the closing” as typically has been the case.

“ ‘Passing papers’ became much more literal with customers picking up documents in boxes outside the closing agent’s office, signing in their car while visible to a notary from inside the building, then handing them back through open windows or sliding under doors,” Murray said.

Four Seasons Sotheby’s DiStasio said his brokers have also closed home sales in parking lots with parties wearing masks and gloves and exchanging papers to sign through the car window.

“We’ve even had quite a few sales in both states that have been sight unseen” with the buyers inspecting the property only via 3D video, he said.

Although listings of homes for sale are down nearly 30% — “there are folks who absolutely don’t want people coming through their home” — DiStasio said that pending sales have increased from 152 to 313, or 106%, from April to May.

“That says despite the pandemic, buyer activity is extremely strong right now,” DiStasio said.

Still, while he does not foresee a banner year for real estate sales because of the dearth of homes for sale, DiStasio is not predicting the implosion in the market of the last recession.

“There is a lot of pent-up demand. We see a lot of buyer activity. Will the year-end be where we thought it would be at the beginning of the year? No. It will be down,” he said. “We think the summer and fall will be active but we are not going to set the world on fire.”

Contact John Lippman at jlippman@vnews.com.




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