Residential real estate prices continued to push into record-high territory during the first half of 2019, propelled by strong demand, low interest rates and inventories and a years-long economic expansion blowing past warnings of a possible downturn. 

Some of the same dynamics also contributed to a spring rush by owners to refinance homes, boosting the mortgage origination market across the state. 

There were indeed some troubling signs this past spring within the market, most notably yet another statewide decline in the number of single-family homes for sale in the state, according to data from the Warren Group, publisher of The Registry Review. 

There were 8,850 single-family homes put up for sale in New Hampshire from January to July, down a hefty 7.7 percent from the same year-to-date period in 2018. 

But buyers were out in droves during the all-important spring months, driving up single-family prices in most submarkets, from a statewide median of $265,500 in 2018 to $281,500 in 2019, for a 6.24 percent gain.  

“The market is fully recovered,” Allison James Estates’ Stephan Morrissey said of activity in the Nashua area, one of the hotter markets in the state this past spring. “It was as crazy as ever.” 

Lack of Affordable Options Shows 

In Nashua, sales fell from 448 year-to-date in 2019 to 439 through July. But single-family home prices soared during the key spring months, rising 8.7 percent to $310,000 compared to the same year-to-date period in 2018. 

One of the main reasons for Nashua’s surge, according to Morrissey, was the strong regional economy, driven by tech companies and workers sometimes moving just across the Massachusetts border. But the primary reason for the price jump was a “complete, absolute shortage of affordable housing” for sale, he said.  

Lower-end housing, in the $250,000 to $300,000 range, was hard to find in the Nashua market, he said. That category shortage led to a stronger market in duplex sales, as some buyers opted to purchase two-family homes, living in one unit while renting out the other to make their financing work, he said. 

In the Manchester area, the spring inventory problem was also evident, with overall sales down 7.9 percent to 541, according to The Warren Group. Yet, due to the combined inventory shortage and strong demand, single-family prices jump by 6.3 percent to $250,000. 

“We had multiple offers on some properties,” said Lisa Boucher, a broker at Hearthside Realty in Manchester. Towns in the general Manchester area also had strong springs, with either rising prices or prices holding steady at previously high levels, Boucher said 

In Bedford, single-family medium prices this spring were actually down by 1.28 percent, but they were down to $477,000, one of the highest median prices in the state. Boucher said one single-family home in Bedford had 14 offers and ultimately sold for $30,000 above asking price. 

Boucher added she’s starting to see many young Millennial couples, who previously opted to rent or own in more hip urban areas, starting to shop around for single-family housing in towns with good schools.  

 Hot Cities’ Neighbors See Bump 

In the red-hot Portsmouth market, numbers of sales defied statewide trends, increasing from 86 year to date in 2018 to 102 in 2019. But single-family prices continued to increase to $484,000, up 6.38 percent from 2018 and up an astounding 25.84 percent since 2017, according to data. 

“Prices have gone up so much, people are spreading out,” said Janet Sylvester, a principal and broker at Great Island Realty in Portsmouth.  

In nearby Newmarket, year-to-date spring prices jumped by 16.8 percent to $375,000, according to The Warren Group. In one instance, a three-bedroom home in Newmarket sold for $1.8 million, after the seller “got offers right out of the starting gate,” Sylvester said. Three other properties sold above or near $1 million before they even formally hit the market, she added. 

Meanwhile, single-family prices were up 11.8 percent to $423,000 this past spring in Hampton, reflecting the general strength of the entire coastal area south of Portsmouth. 

Even in areas of the state not known for their robust real estate activity, prices were rising this past spring, as the state’s overall market improvements relentlessly spread, mostly from south to north. 

Just north of Mount Washington, Berlin has single-family prices that might rival the values of decent-sized garages in trendy areas like Portsmouth. Berlin’s medium single-family home price was only $59,000 in 2017 but rose to $72,000 last year and year-to-date to $78,000 in 2019, for a very impressive two-year gain of 44.4 percent, according to data. 

“They had nowhere to go but up,” said Brenda Leavitt, the general manager at Badger Realty in North Conway, of prices in Berlin. She credits a recovering economy and, mostly importantly, Berlin’s marketing of new ATV parks and trails for adventurous vacationers.  

“They love it,” she said of ATV enthusiasts who decide to buy in Berlin. 

As for the second-half fall market in New Hampshire, most market-watchers are bullish. 

Portmouth’s Sylvester said she’s seeing a strong fall so far – and expects a strong fourth quarter – for all the same reasons that made spring a strong market.  

“The pipeline is already full,” she said.