We were talking in the office the other day regarding how much the real estate industry has changed over the past 45-years. I look back, and it was 1976 when I entered the real estate profession in the Lakes Region. When I joined the Lakes Region Board of Realtors®, there were 75 Realtors® in the entire membership, and we knew the majority by name. Most of our monthly meetings were at the Pheasant Ridge Country Club, and our MLS system back then was archaic. Basically, every two weeks, the board office would forward each Realtor® member a packet of 5 ½ by 11 ½ sheets with a black and white photo of the new listings and pertinent listing information. A summary sheet would list pending sales, closed sales, withdrawns, and new listings. It was the agents’ obligation to insert the sheets in a 3 ring binder with tabs for waterfront, beach rights, residential, land, and commercial. Pretty simple system back in those days.
Yes, we had control of the listings, and consumers had to contact us for all related information, available properties, and all showings. Back then, you could form a close relationship with your clients. We would spend hours and weekends driving out customers all over the Lakes Region with kids in tow. There were no cellphones, no faxes, no email, no high spend color copiers, no computers, no dot loop or DocuSign, zipforms, toolkit CMAs, and no social media sites. We used basic typewriters, and our best friends were payphones in a few scattered locations. We were always running late in those days because of so many showings, only to be disappointed when the phone booths had a coin jam in the insert slots. I can remember handwriting many offers on the hood of a car and then hand-delivering them. Needless to say, I was always late for supper.
We always treated our fellow Realtors® and clients with utmost professional respect. The majority of offices were small independent real estate companies with lots of for-sale yard signs dotting the countryside. Our advertising programs were basically print media, local papers, the home guide, Boston Globe, and Wall Street Journal classified ads. Realtors® were like poets. They would describe a “babbling brook running through the property” in the Boston Globe, only to learn at the showing that it was actually a stream runoff from the industrial park up the road.
Since those primitive years, I’ve seen the real estate industry undergo a number of substantial changes. The internet has been the most significant impact and has revolutionized the entire industry. The internet basically surpassed the “yard sign” as the most important tool to reach consumers. There was no looking back once Realtor.com, Zillow, and other real estate portals were established. Our industry has experienced the trends like so many others. The travel industry is one good example. There were travel agencies on every corner. Today the big names are Booking.com, Expedia, Tripadvisor.com, Airbnb, VRBO, etc.
The transfer of information onto so many accessible and user-friendly sites has transformed the way we do business. Back in the mid-70s and 80s, the majority of communication was the telephone and letters. In 1995 only 2% of prospective buyers utilized the internet in their home search, according to housewire. By 2005 the number had jumped to 75%, and today a stunning 97% of prospective buyers go to the internet while searching for the perfect home. However, the vast majority of consumers still enlist the services of a Realtor® to help them make an informed real estate decision.
Today there are 920 Realtors® in the Lakes Region Board of Realtors®, compared to 75 when I started, and there are over 6,000 Realtors® in New Hampshire. Nationwide there are over 1.56 million members of the National Association of Realtors®. Today more than 65% are women, the median age is 52, and the median experience level is five years.
During my 45-year career, I’ve experienced many real estate cycles. The 1970s provided two periods of oil shortages, and soaring inflation defined the economy reaching a high of 14.5% in 1980. In 1981 we had to work with record-high interest rates. I was quoting a 30-year variable interest rate at 18% to my clients with a 5 cap over the life of the loan. Prices were so much lower, of course. I remember selling the land to the developer of Samoset Condominium in Gilford. Twenty-two gorgeous acres with 850 feet of shorefront on Winnipesaukee with knock-out views for $250,000. 131 condominiums were built, and today just one condo is selling from $500,000-$800,000!
Fortunately, the Federal Reserve dropped the rates, and the 1980s took off like a rocket. I called it the “go-go 80s.” 45 new condominium developments were started in the Lakes Region during that decade. This speculative frenzy was followed by the stock market crash in October 1987 and led the groundwork for the recession that hit in the 1990s. The real estate bust was the worst I’ve seen. Banks failed, and the foreclosure process that followed was unprecedented. Thousands of auctions took place over a two-year period, and the deceleration of values took a decade to rebalance.
On April 14th, 2000, the Dot-com bubble crashed because of excessive speculation of internet-related companies in the late 1990s. When it burst, it destroyed $6.2 trillion in household wealth over the next two years.
Fast forward to 2008. The housing and stock market crash in 2008 originated because of an unrelenting surge in the subprime mortgage market, which began around 2000. Borrowers were defaulting in huge numbers, which led to the fallout in the financial markets and ultimately the collapse of the stock market, followed by the great recession. From 2007 to 2009, the value of real estate owned by US households fell by nearly the same amount — $6 trillion.
So here we are today in 2022. Home prices have soared in the Lakes Region during the past 13-years. They have risen to new heights and keep on climbing. A new blog post written by researchers & economists at the Federal Reserve in Dallas recently indicated that home prices are becoming “unhinged from fundamentals.” They write, “Our evidence points to abnormal US housing market behavior for the first time since the boom of the early 2000s.” I just saw a recent sale take place in our Lakes Region that sold for $1,300,000 over the listing price. We are seeing multiple bids on numerous properties, and we have the largest undersupply of real estate inventory in my 45-year career here in the Lakes Region. I’ve never seen anything like it.
We sure have seen many changes over the years, and we’re going through one right now!
This article was written by Frank Roche. Frank is president of Roche Realty Group with offices in Meredith and Laconia, NH, and can be reached at (603) 279-7046. Please feel free to visit www.rocherealty.com to learn more about the Lakes Region and its real estate market.