Is Owning a Home a Good Investment?
The short answer is YES. According to House Logic and The BHG Milestone experts, owning a home has financial – and emotional – benefits! Consider:
- Long-term financial growth. Real estate appreciates!
- Building equity. From your downpayment to your mortgage payments (minus fees and interest), each dime adds to your home’s equity.
- Income tax advantages. The sale of your primary residence allows you (in most cases) to avoid tax on your profit ($250,000 for an individual; $500,000 for a couple).
- Additional itemized deductions. If you itemize your taxes, you can deduct property tax, some closing fees (like points), and mortgage interest!
- Fixed monthly payments. Your rent might (will) increase – but your mortgage payment is fixed.
- Improved credit score. Pay on time and reap the benefit!
- Your space – your castle. When you own your home, you can remodel and decorate any way you desire!
- Your sanctuary. Your home is your private sanctuary. It’s all yours!
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#buyahome #homefinancialbenefits
It’s Still a Seller’s Market
By: Donna Forest, Broker Associate
If you are in the market looking to buy this year, you’ve probably noticed the lack of homes for sale. Case in point, there are only 9 houses for sale in the combined towns of New London, Newbury and Sunapee – and 3 are to be built (as of 4/19). New listings in the state of NH are down almost 20% compared to the first 3 months in 2022. When the supply of homes for sale are so low it creates increased competition among purchasers and keeps upward pressure on prices. And houses tend to go under contract very quickly once they hit the market. Not unsurprisingly, sales thru March in NH are down 19.7% yet the median sales price is up 3.6% to $430,000. Sales in the 3 combined towns are down 26% compared to 2022 and the median sales price is up 8.5% to $558,250.* So, should you wait to buy until prices come down? Data shows prices are increasing in much of the country and experts project home prices will rise steadily and return to more normal levels of appreciation after this year. Whether buying or selling, contact me for the latest insights into our local market.
* Figures are based on information from the Northern New England Real Estate Network, Inc. for the period 1/1/ - 3/31/22 and 1/1/-3/31/23
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LOCAL ARTIST DAY: Poet, Jane Kenyon
When the BHG Milestone Team is not helping our community with real estate transactions, we are trading books and sharing stories. This week, Marilyn sent me information about a local poet – and I am thrilled to share her with you!
Meet New Hampshire’s past poet laureate (January 1995-March 1999), Jane Kenyon. She published four volumes of poetry – From Room to Room (1978), The Boat of Quiet Hours (1986), Let Evening Come (1990), and Constance (1993). She was also a talented translator, publishing Twenty Poems of Anna Akmatova (1985).
Fair use; Photograph by Stephen Blos.
Although Kenyon was born in Michigan, she called New Hampshire home in 1975 when she and her husband, poet Donald Hall, moved to his ancestral home in Wilmot. The property has been rescued and is being lovingly restored and managed by At Eagle Pond, Inc..
The film, A Life Together, celebrates the creative couple.
To truly know Jane Kenyon, one must experience her simple but emotionally resonant poetry. In the film, In Her Shoes, the character, Maggie, played by Cameron Diaz, is learning to read. To practice, she reads several poems – including Kenyon’s “Let Evening Come.”
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TEAMWORK
Every region has its share of real estate agencies, and our locality is no different. According to Realtor.com, New London boasts 136 licensed agents! If you’re a buyer or seller, how do you choose from among those talented people? The BHG Milestone Team advises you choose a team over an individual. The strength of our office is our unique approach: No matter which agent has the listing or the buyer, the whole team – every agent and administrator – is involved and serving that customer or client. Agents share experiences and expertise, work together for open houses and marketing initiatives, so no matter if you are selling your home or shopping for a new one, you have a team beside you! Expect BETTER from the Best TEAM in town!
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HAPPY WORLD LAUGHTER DAY
Just How Many Realtors Does It Take…to change a lightbulb?
Just one Realtor is all it takes to screw a handsome, bespoke lightbulb into the crystal and antique brushed brass chandelier in the grand entryway with soaring ceilings and custom crown molding in this classic Georgian-style home located in a gated neighborhood with private lake and golf course – and panoramic views of Mount Kearsarge. Won’t last! Must see!
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NH: THE STATE OF FIRSTS
Whether you're a New Hampshire newbie or a born granite starter, you may not be aware of the number of achievements New Hampshire has come in at #1. Take a look:
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First in the nation to hold a Presidential Primary election.
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First colony to declare independence from England. Live Free or Die!
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First colony to have its own state constitution.
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First private citizen to venture into space.
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First mountain-climbing train, Mount Washington’s Cog Railway.
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First free public library (Peterborough, 1833).
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First integrated baseball team (Nashua).
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First woman editor – Sarah Josepha Buell Hall, a writer and activist from Newport, edited Godey’s Lady’s Book (1830-1878) and Ladies’ Magazine. She wrote Mary Had a Little Lamb (1830), was responsible for making Thanksgiving a national holiday, and was a founder of Vassar College.
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New Hampshire also holds the title for the highest wind speed (over land, 231 miles per hour on Mount Washington in 1934).
If you find any other New Hampshire Firsts, let us know!
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News * News* News
Now is the Time to List Your Home
According to the National Association of REALTORS, job growth and lower home prices resulted in increased contract signings in all four major US regions for two consecutive months (Dec, Jan).
New England contract signings are up 6%.
January was the largest month-to-month gain since June 2020.
This tells us: Now is a great time to list your home.
Here’s why: The inventory remains low – so listing prices are stably high. Stable mortgage rates are inviting more buyers to enter the market.
You will need a savvy real estate agent to set an attractive sale price. And buyers need a savvy real estate agent to find the perfect budget-friendly home.
Call The BHG Milestone Team today and find out why we're The Best Team in Town!
Photo by Towfiqu barbhuiya on Unsplash
Decoding Real Estate Terms: Property Value
What is your home worth?
We’ve been to that yard sale where we offer $5 for the rocking chair and the seller insists it’s an antique worth $50! (Which begs the question: Then why are you selling it out here on the lawn, in the rain?)
The same concepts apply to selling and buying real estate – and the industry has so many terms and ways to value a property, it can get confusing. Home value tools you find on the internet muddy the waters – although these tools are interesting, they are simple calculators that do not know the current, local market trends.
To better understand how to set and evaluate a property price, let’s look at those terms:
Fair Market Value: Arguably the most important valuation term to understand, fair market value is what a willing buyer would pay a willing seller. The definition makes it clear that willingness is inherent in the value: That the parties negotiate the price through an arm’s-length transaction, that the parties are aware of all the facts, that the parties are not pressured in any way.
For example: Mr. Smith offers Mr. Jones $200,000 for his home, and Mr. Jones counteroffers for $250,000, when Mr. Smith agrees, the fair market value is $250,000. Contrast that transaction with Mr. Smith offering his grandmother $50,000 for her house and she accepts (more akin to a gift than a negotiated sale on the market). Or, compare the first example with a short sale – where the buyer merely pays off the mortgage. That transaction does not reflect the market price at all! Fair market value is determined when the buyer freely makes an offer, and the seller freely accepts.
CMA: A CMA, or comparative market analysis, is the procedure real estate agents use to set the listing price for a home (or help a seller decide whether to sell). To perform the CMA, your agent researches the closing price – the fair market value - of similar, recently sold properties in your area. Read that again.
First, the listing price of local properties does not mean that is what a willing buyer will pay. And, often, enthusiastic sellers or agents will over-price a property – causing it to either sit on the market for far too long, not appraise for the listing price, or suffer price reduction after price reduction! Fair market value is only established when the deal closes.
Second, the agent uses properties that have sold recently – not last year! The recency is a good indication of current market conditions.
Third, the agent carefully selects the geographic area. What a house is worth in Manchester is not what it would be worth on Lake Sunapee!
Last, the agent will carefully identify properties as similar to your home’s features as possible: Number of bedrooms and bathrooms, square footage, condition, acreage, location to water, special features and characteristics, and so on. Also note, the agent will avoid using short sales, foreclosures, inherited or gifted properties in her analysis because those values do not reflect fair market value.
Appraisal: An appraisal is an authorized valuation of a property – an educated guess for what the fair market value could be. Similar to a CMA, an appraisal is completed by a licensed appraiser who analyzes the property using factors like location, condition, and resent sales of similar properties. Typically, appraisals are used for real estate, collectibles, or businesses to determine market value.
For example, your insurance company may want your sports cards appraised so it knows how much insurance you need to cover replacing the collection. Or an entrepreneur may need her business appraised so she can sell half to a new partner.
Often hired by the lender, the appraisal assures the lender it is not loaning too much for the property (that the property is enough collateral). For example, if the home appraises at $500,000, the lender will not want to loan $600,000.
Buyers also use appraisals to renegotiate contract terms. For example, if a buyer offered $500,000 and the appraiser determines the home is valued at $450,000, the buyer may attempt to reduce her offer. Whether or not she can do so will be clearly outlined in the sale contract. An expert real estate agent will consider the appraisal process when pricing and marketing your home.
Assessment: Assessed value is the value the tax authority uses to calculate property taxes. To determine that value, the tax assessor uses a type of appraisal which considers the fair market value, improvements, and the characteristics of similar properties.
But realize assessment happens irregularly – maybe every five or ten years. Fair market value can swing over that time. So, although the assessor uses fair market value, the assessment only hints at what fair market value was when the assessment was completed.
Assessed value is also adjusted for the character of the property – whether it is commercial, residential, the zone, and so on. Also, assessors often do not set the assessment at 100% of the estimated fair market value. And homeowners can appeal the regulator’s assessment – altering the assessed value. So, although buyers should investigate the assessment to determine how much property tax will be owed, the assessment does little to set or reflect the fair market value.
We hope this information helps you appreciate the value of your property. When you are ready to list or shop, contact The Best Team in Town to help you!
And, for more expert advice:
Photo by Alexander Grey on Unsplash
Part 2 of Our Two-Part Series:
In our April 3rd post, we gave you 5 ways to save for your home purchase down payment. Here are The Milestone Team’s second five tips to get you on the road to home ownership and your own special place in the world:
6. Make your savings work for you. Invest your down payment nest egg in a high-interest money-market or savings account. Avoid riskier investment (like stocks or crypto) so your principle is safe.
7. Start a side-hustle. Forbes recommends turning hobbies and passions into a side-business to earn additional income. You can also take a part-time job or…
8. Ask for a raise at work. The sooner you ask, the sooner you can save more for your new home.
9. Talk to a mortgage lender. Knowledge is power. Your local lender can offer steps and ideas so you can afford your dream home sooner. And…
10. Talk to your local real estate expert. Sure, you’re not buying your home today. However, you do not need to wait until you are shopping to engage your real estate agent. The Milestone Team members are experts and have the experience to help you save and shop wisely!
Don't forget for more expert advice to:
Did you know?
Songs of New Hampshire
New Hampshire has 9 state songs: One Official – Old New Hampshire -and 8 honorary songs. So, let’s sing-along!
- New Hampshire, My New Hampshire with words by Julius Richelson and music by Walter P. Smith.
- New Hampshire Hills with words by Paul Scott Mowrer and music by Tom Powers.
- Autumn in New Hampshire with words and music by Leo Austin.
- New Hampshire’s Granite State with words and music by Anne B. Currier.
- Oh, New Hampshire (you’re my home) with words and music by Brownie McIntosh.
- The Old Man of the Mountain with words and music by Paul Belanger.
- The New Hampshire State March with words and music by Rene Richards.
- New Hampshire Naturally with words and music by Rick Shaw and Ron Shaw.
- Live Free or Die with words and music by Barry Palmer.
We can also add songs that have not been granted an honorary title, but that capture all that is New Hampshire in a modern way:
- Okay, Alright with words and music by moe.
- Granite State of Mind with words and music by the Super Secret Project.
- White Mountain Fever by Jimmy Lehoux.
- New Hampshire by John Linnell.
And probably the most popular and known New Hampshire tribute: New Hampshire by Sonic Youth!