Living Large in the 603

A luxury home in Portsmouth. Courtesy of Ann Cummings/ RE/MAX Shoreline.

New Hampshire’s luxury real estate market is on the upswing in the Seacoast and Lakes regions, but these upscale properties are now attracting a different kind of buyer who is redefining the luxury market.

Upscale condos and homes in places like Portsmouth and Rye are now drawing millennials, Gen Xers as well as active retirees who all want to be within walking distance of amenities like restaurants and theaters. “The downtown is their living room,” says Jim Lee of RE/MAX Shoreline in Portsmouth. Adds RE/MAX Shoreline colleague Ann Cummings, “Some of our clients don’t even use their kitchen.”

Meanwhile, in the Lakes Region, baby boomers seeking opulent waterfront mansions are still key purchasers, though many brokers see a trend toward smaller luxury properties requiring less maintenance—a trend driven by both retirees and an increasing number of younger buyers either telecommuting or seeking getaway homes.

Bucking the Sales Trend
A July 2017 report about the New England luxury market issued by the RE/MAX Collection indicates that some parts of New England have seen little or stagnant growth in sales of upscale properties over the last two years. The seacoast and lakes region markets are exceptions.

It notes that Portsmouth saw a 123 percent increase in single-family luxury homes sold over the 12 months before the report was published, with Rye increasing by 48 percent. In the Lakes Region, Laconia saw a 300 percent increase in the volume of luxury homes sold, while Moultonborough experienced a 36 percent increase.

Luxury Portfolio International, which showcases high-end properties offered by agencies in North America, Europe, Central America, the Caribbean, Mexico, Australia and Asia, listed 60 luxury properties for sale in NH in September, ranging from a $9.995 million waterfront estate in Portsmouth to a $699,900 Adirondack-style home in Thornton. Rye and Dover had the most properties, with seven each, followed by Portsmouth with four and Bedford with three. RE/MAX Collection report states that Rye may soon emerge as “the more desirable location along the New Hampshire seacoast.”

“Today’s luxury buyers, mainly older millennials and young Gen Xers, are motivated by unostentatious yet modern homes that are of equal distance to uninhibited seacoast and downtown amenities,” the report states. “In short, access is displacing opulence when it comes to defining a luxury listing in New England.”

Downsizing Luxury
The most expensive property on the market in NH—a 16.5-acre compound on Lake Winnipesaukee, owned by the NH International Speedway founders and comprising three houses totaling more than 63,000 square feet—has dropped in price from $49 million in 2014 to $19.8 million today.

Longview, the most expensive property on the market in NH, is located on Lake Winnipesaukee. Courtesy of Land Vest.

“With the boom that took place in the 80s, these massive homes that went up were so gaudy,” says Karen LaFlamme of RE/MAX By the Lake in Alton. “But a lot of the people that buy these big monster contemporaries are scaling them back.… The showy homes aren’t selling any longer. One of the biggest families on the lake are the Marriotts [of hotel fame] and if you saw their house, it’s nothing fancy.”

Instead of lavish mansions, Frank Roche of Roche Realty Group in Meredith and Laconia says many new Lakes buyers are going for Adirondack-style homes with log siding and stonework.

Likewise, Mary Truell of Peabody and Smith Realty Inc. in Meredith, says, “They want a rustic lodge feeling that is completely different from their main house in the city or suburbs.

Natural wood and exposed beams are a great selling point. Most are looking for privacy and a place to relax. They don’t care how far away they are from the grocery stores or town because they see their vacation home as their sanctuary once they get there.”

Roche also sees a trend toward more modest waterfront communities with communal access to waterfront and marinas. Christopher Williams of Lamprey & Lamprey Luxury Homes in Center Harbor also sees more younger buyers “buying into an association where there is a lower price for the home but they have access to the lake.”

Defining Luxury
So what exactly is a luxury property?

Many think of it as homes in the $1 million-plus range, and that’s the standard used by RE/MAX for its luxury property magazine, according to LaFlamme. Susan Bradley of Coldwell Banker in the Lakes Region defines it as properties in excess of $3 million.

“In Massachusetts, it’s anything over a million. But when you come to the Lakes Region, you couldn’t get a camp on Winnipesaukee for a million,” says Sarah Kelley Ford, managing broker at Four Seasons Sotheby’s Wolfeboro office.

Properties on Squam Lake tend to be higher than on the “big lake,” Winnipesaukee, “because they tend to be larger pieces with more [water] frontage,” says LaFlamme. Other buyers prefer some of the smaller lakes in the region because “they don’t want the hustle and bustle of Winnipesaukee.”

A property in Moultonborough has the rustic lodge feeling that many buyers are looking for in the Lakes Region. Courtesy of Mary Truell/Peabody and Smith Realty Inc.

However, even these prices can be considered a bargain compared to other markets. “Relative to properties in Boston and New York, even our high-end stuff seems cheap by comparison,” says John Bionbolillo, broker and owner of 10 William Raveis Real Estate offices in northern New England. “Two-million bucks doesn’t go very far in New York, but it can buy a lot in New Hampshire.”

Location has also been a factor in the types of luxury properties that are selling and who’s buying them, several NH real estate agents say. Cummings sees three types of luxury properties selling well in the seacoast: waterfront homes, newer properties close to downtown amenities and antique homes like the ones that have graced central Portsmouth for centuries. Waterfront properties tend to draw older buyers looking for a second or third home, she says. Baby boomers and retirees are also going for the downtown properties, including condos that can run $2 million to $4 million and boast 2,000 to 3,000 square feet. Antique homes, she says, are a “niche market” unto themselves. “You have to love antique homes,” she says. “They’re a labor of love.”

A shortage of inventory on the Seacoast has also boosted prices there, according to Lynne Joyce, associate broker at Tate & Foss Sotheby’s International Realty in Rye. The agency’s mid-year market report showed available inventory down 20 percent per month in 13 coastal towns (including some in Maine) in the first six months of 2017, while the median sales price was up 7.4 percent. Condo sales, meanwhile, were up 18.4 percent from 2016.

“The luxury condo market in Portsmouth is very hot,” Joyce says. “We’re seeing a lot of boomers downsizing from suburban living to city living where you can walk to restaurants, shops, theaters and parks.”

 
The Rockingham Building, a luxury townhouse-style condo building located at 401 State St. in downtown Portsmouth. Courtesy of Liz Levey-Pruyn/ RE/MAX Shoreline.

Beyond Boomers
But it’s not just boomers buying into downtown luxury.

“Millennials especially don’t want to be slaves to a house like they saw their parents doing, so a condo fits the bill for many of them,” says Bionbolillo. Improvements in public transportation have also made it easier for millennials and Gen Xers still working to zip from the Seacoast into Boston or other prime work locations, notes LaFlamme.

LaFlamme and colleague Don Roberts at RE/MAX By the Lake see Gen Xers as the primary buyers of luxury properties in the $900,000 to $2 million range, with retiring baby boomers going for the more expensive homes, often after selling their primary residence with thoughts of moving to their lake home. Roberts estimates that two-thirds pay cash.

Bradley notes there are 10 Lakes Region properties at $3 million or more that have either closed or are due to close in 2017 compared to nine in both 2015 and 2016.

On Winnipesaukee alone, the average selling price for lakefront this year, including island properties, has been $1,088,000, according to Roche, with 134 sales so far. Last year’s average price was similar, $1,082,895, involving 185 transactions.

Sarah Kelley Ford at Four Seasons Sotheby’s notes that Lakes area luxury home sales are up by 20 percent in units this year compared to last year and up 8.34 percent in total dollar volume. “The average listing price is down by 10.5 percent, but the selling price is only down by 2.38 percent, telling us that sellers are being more realistic with where to position themselves in today’s market,” she says. She adds that her data was pulled from local multiple listing services and only reflect sales logged there.

As for when people buy luxury properties, factors as varied as the season and the stock market can come into play. Williams at Lamprey & Lamprey Luxury Homes sees a trend toward more purchases of lakes property in the fall as opposed to the traditional summer months.

“I attribute it to buyers wanting to enjoy their summer vacation time and then coming back,” he says.

Roche, too, says would-be buyers on summer vacation “focus on family time, then come back in late August or September and end up purchasing property.”

While Williams has seen many investors purchase luxury homes when the stock market is down and prices are lower, Roche has also seen a spike in buying after a sustained period of economic growth. Some recent luxury purchases, he says, may stem from “gains in the stock market, people taking out equity from stocks and parlaying it into a second home  in terms of diversifying their portfolios.”

Even presidential politics can factor in, with Bionbolillo saying he routinely sees a slowdown in buying just before an election. “Last year, in the three or four months before the election, it really slowed down,” he says. “Come January, it cranked back up again. I’ve been doing real estate for 30 years, and it happens every time.”

As for why people buy luxury property in NH, many brokers say the state’s sheer natural beauty, recreational offerings and New England charm cannot be equaled. Bradley says, “They are coming for the lakes-and-mountain lifestyle.”

Cummings and Lee add that the Seacoast is also only 50 miles to Boston, Manchester or Portland.

“The interesting side of the luxury market is that it seems to exist in a protected bubble in our Lakes Region,” says Truell. “Homes in the luxury market maintain their value through thick and thin. I think it has a lot to do with how beautiful our lakes are and how easy it is to get out there and enjoy nature on the lake or hiking on the trails and then pamper yourself by going out to a wonderful dinner or spending time at the spa. We really have all that the luxury consumer is looking for in our area: outdoor activities, world-class restaurants, local art galleries, shops and antique dealers and high-end spas.”

Adds Roche, “We’re New England’s playground here in the Lakes Region. People want that four-season recreation area.”