SUNDAY RIVER MARKET UPDATE

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I have been tossing around for weeks about how I want to approach a Market Update that provides insight to the current state of the market, and simultaneously offers an historical perspective gleaned from my nearly 19 years of selling properties in the Sunday River region.

As I sit pondering on another snowy day in Newry thanks to another late season storm, I search for statistics that can offer some perspective and perhaps more important, support my gut instinct. ??

For simplicity I am looking at Newry only as the numbers per se are not as important as the trends.? ?Some stats that paint a picture, taken solely from the Multiple Listing Service and including single-families, land and condominiums:

?2023

Average Days on Market (DOM) – 3

Average List Price - $1,137,304

Average Sale Price - $639,950

Number of Properties Sold January 1 to April 5 - 11

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2024 to April 5

Average Days on Market – 45

Average List Price - $1,149,717

Average Sale Price - $525,000

Number of Properties Sold January 1 to April 5 - 11

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The Days on Market are increasing as the supply of properties has increased.? ?It’s interesting to note that from April 4, 2022, to April 4, 2023 there were a total of 88 properties sold and in the same timeframe this past year, 78 properties were sold.? ?I can’t run a report on how many Active listings were available in the 2022 – 2023 period, but I know anecdotally it was far less than the total of 33 properties currently available, which brings us back to just one of the factors of the longer DOM.? ?Buyers simply have more choices and can be more patient.

Note, too, the average list price is slightly higher.? Despite the increased time to sell properties, Sellers for the most part have not reduced list prices to reflect potentially longer periods on the market.?? Sellers in a second home market also tend to be more patient as there is typically no imperative to sell, and in the case of some of the new construction the costs to build leaves little margin.?? Sometimes, new construction takes longer because Buyers cannot visualize the final product mid-construction.?

On the surface, it would be a simple case of economics:? less supply, more demand.? More supply, less demand and lower prices.? The key to this, however, is that properties are selling below list prices (see the average sale price to date in 2024), but the list prices have not changed and largely have continued to eke. ?

One of the most important stats above is the number of properties sold in identical time periods in 2023 and 2024.? In fact, the exact same number.

So is the market softening, or is that a perception based on the longer DOM? ??I would say the latter.?? And let’s look at the current state of pricing.

I have felt and stated that in the Sunday River market, real estate trends start with the slopeside condos, move then to off-mountain condos and single-family homes and then finally to land.?? This has been evident in recent years.

While the perception is that the pandemic drove the market to its current state, the indicators had started in the prior months to Spring of 2020.? For years, it was not uncommon to show 10 or 12 + condos in an afternoon: Buyers had lots of options and I often counseled them to take notes as we viewed as to the attributes of each because it was difficult to keep track.? But in the 2019-2020 season inventory already was decreasing, and pricing was becoming unprecedented.? I remember selling a one-bedroom at Cascades for $160,000.? And a two -bedroom North Peak for $235,000.?? My clients purchased a South Ridge townhome for $290,000 and feared overspending.? At the time. Wow.? Just wow.? ??

The trend was already starting and then bang.? The pandemic hit.? After the first couple of months of an adjusted way of life, properties in serene places with plenty of elbow room became a real commodity, add to it the ability to recreate and it becomes even more desirable.? The slow brewing trend suddenly came to a boil and our beloved Sunday River suddenly became a magnet from Buyers across the Northeast, outside of our longtime core market.

Here we are today, pricing at Sunday River is different than it was, arguably the “before” pricing was a bargain.? One-bedrooms condos are selling in the high $300s to low $400s, the last two-bedroom at North Peak sold for $650k and South Ridge townhomes are in the high $6s. The high-end pricing for single-families averaged used to be in the $700k range, now that price point is a bargain within the access road and actually a bit tough to find. The stats show the average lists and sale prices. There has been three properties sold in the $4 million and above range since pandemic pricing, two were just late last year.

Up until the “new normal” of pricing, I told my Buyer clients to not view a purchase at Sunday River as a financial investment (unless for the sole purpose of renting); that if they sold and came out whole, they would be doing well.? Instead, I called and still call it a lifestyle investment.? Sounds like a platitude, but I have always tried to be transparent.? Those Buyers all of those years, and the ones that feared paying new threshold pricing in 2019?? Not only do they have great equity, they have years of amazing memories they never could have created if they didn’t buy into the lifestyle investment theory.

So back to the stats, the increase in DOM from three to 45 is the largest indicator.?? We’re beginning to see price reductions.?? Again, on the surface, reductions might tell a story of woe, but what I see is reductions on properties that were probably priced to begin with to hit new thresholds or ones that are not unique enough to the market to justify the list price.? Or too unique, and that right Buyer has not come along because the volume of Buyers this season is less than a “normal” consistent winter.?? ?

Rising interest rates??? To some degree, yes.? I just had an enthusiastic Buyer take a back seat after realizing the rental revenue could not cover the nut with the monthly payments.? A couple of years ago with 2 -3 percent rates, I would likely be writing an offer. ??There are still investment Buyers in the mix, but the investment/and “my own use” Buyers are cooling for now.?

Besides an influx of new inventory this season that has led to increased DOM, the most significant contributing factor is simply that winter has just taken too many twists and turns.? After a strong start to December, we were hit with the devastating flooding that had us questioning recovery.? Kudos to Sunday River for the remarkable work in not only restoring conditions quickly, but in the process created and reinforced a strong community of enthusiasts.? Unfortunately, as quickly as the momentum resumed, winter was fraught with warm temperatures, inconsistent snow, and the wrong precipitation.?

In my years of selling, I have seen Buyers after enjoying a great experience, whether a weekend or vacation week, clamor to get a place to call their own, build their memories.? The calls and emails come on Monday mornings when they return to their work lives and dream about the getaway they just had.? They want to embed the opportunity in their lives moving forward.

This year there have been some great days out there. ?And properties have sold.? They are many happy new homeowners this season.?? It was just different than the prior two years.? Less flurry, less multiple offers. Less zero days on market.

I am always an optimist on real estate in the Sunday River area and with good reason.? ?Sunday River came out of this winter showing it’s a powerhouse among resorts for snowmaking.? The resort keeps plugging toward the future.? It’s still the best choice for skiing and real estate in the Northeast. ???So, if you are hesitant, don’t be.? History and statistics will show a purchase here is a decision you won’t regret.??