The Lake Effect
Just about everyone knows what a “Lake Effect” is. Well, maybe some of the people in the Southwest might not know. But certainly, if you have been to Chicago, Buffalo, or Syracuse you know how much more snow and bad weather you can get along the shores of the Great Lakes. Winnipesaukee has a Lake Effect, too. The big lake can have its own weather. It can have a calming effect on most people and it can also cause some people to drink excessively and act foolish. But that is not the Lake Effect I am talking about.
I thought it might be helpful to take a closer look at the Lake Effect with regard to the average sales prices of homes in the communities in this report. This is the Lakes Region and every town in this report has waterfront property and every month there could be any number of waterfront homes sold. It is not unusual to have several sales exceeding a million dollars each month and none the next resulting in some wild swings in the average sales price results from month to month. A different kind of snow, so to speak. These sales also inflate the average sales price numbers over the course of the year and might give some people the impression that the Lakes Region is not very affordable for the average Joe. I was driving to work the other day behind Joe in his old truck and I know he lives here somewhere. I also know that he is cheap, so there must be lots of affordable housing out there somewhere.
As I have reported (just about every month, I think), over 50% of the homes in the area are sold for under $200,000. As a matter of fact, I sold one last week for $24,500, but I’m not saying you could actually live in it. The point is even though you see an average sales price for some months coming it at $350,000 or $475,000 it doesn’t mean that homes are out of reach for old Joe. It is just that in some towns with high end waterfronts the numbers get tweaked a little by blowing snow.
The following chart shows the total number of residential sales in 2011 and the average sales price for each town in the second and third columns. The last two columns show the total number of non-waterfront sales and the average sales price without the waterfronts added in. Some towns, like Meredith and Moultonborough, have a large percentage of their sales coming from lakefront properties and hence there is a huge difference in the average sales price with and without the waterfronts factored in. In Laconia where the average residential sales price in 2011 was $231,222 with waterfronts included, the average sales price drops to $194,189 with waterfront sales backed out. The average residential sales price for all transactions in 2011 was $306,460. With the waterfront sales backed out of the equation, the average sales price dropped to $198,558. So you see, the snow is not as deep as you thought…