One thing is clear about the New Hampshire real estate market: It’s obviously immune to the coronavirus. If anything, it seems to thrive on the pandemic. 

A year after the onset of the COVID-19 crisis and a year after record-breaking home prices across New Hampshire, real-estate industry leaders say they’re bracing for yet another hectic year of high demand, low supply and ever–increasing prices for both single-family homes and condominiums, starting this spring.  

“It’s crazy out there,” said Janet Sylvester, the broker-owner of Great Island Realty in Portsmouth. “There’s so little inventory. The competition is fierce. We’re seeing all-cash offers, with no contingencies, no inspections and multiple offers. I can’t see it changing anytime this spring.” 

It’s not just happening in the high-demand coastal, mountain or lake areas. The same phenomenon – high demand, low supply – is happening across the state.  

Last year, sales of single-family and condos were down 11 percent and 4 percent, respectively, and median prices were up 12 percent and 14 percent, respectively, according to data from the Warren Group, publisher of The Registry Review. 

Though the statistical sampling is smaller, data indicates similar trends are already under way in 2021, with year-to-date sales in February falling by 5 percent for single-family homes and median prices increasing by 17 percent to $325,000 when compared to the same month in 2020.  

Sales of condos were actually up by 15 percent year-over-year in February, but prices were still up by 11 percent to $245,000, according to Warren Group data. 

Out-Of-State Surge 

Two factors are driving these record-breaking numbers, observers say: The same high demand/low supply that existed before the pandemic – and a pandemic-era surge in demand on top of that via mostly out-of-state buyers eager to escape more congested areas where the coronavirus rates are higher.  

The buyers are coming from Massachusetts, New York, New Jersey, Connecticut and even as far away as California, said Scott Godzyk, owner-broker of Godzyk Real Estate Services in Manchester. 

Godzyk and others say they are noticing a slight difference in buyers from what they saw last year during the early stages of the pandemic. Last year, it was all about escaping to vacation homes, ideally in the lake, coastal or mountain areas of the state.  

“There was more panic buying last year,” he said. 

But today, as the vaccine rollout slowly tames the pandemic, Godzyk said he’s seeing more “re-location activity,” or people looking to permanently move to New Hampshire, confident they’ll be working remotely full-time in the future, not just during a government ordered lockdown. They’re also attracted to the fact New Hampshire doesn’t have an income tax. 

As a result, they’re paying more attention to the quality of schools and lack of car traffic – and not as much attention on vacationland-type amenities, he said.  

And that means more real-estate activity in places such as Hillsborough County– and single-family homes are the top priority. Median single-family home prices in the area were up 20 percent to $360,000 in February year-over-year, outpacing last year’s median price increase of 15 percent, according to Warren Group data. 

Vacationland Spillover Seen 

Adam Dow, CEO and owner of Dow Realty Group-Keller Williams, emphasized that lake, coastal and mountain regions are still hugely popular.  

He noted that one four-bedroom home on Governor’s Island on Lake Winnipesaukee recently sold within an hour of being listed. The price: $3.8 million. Another Lake Winnipesaukee home, in Tuftonboro, recently sold for $6.9 million after receiving multiple offers, he said. 

But Dow, whose firm has agents in the lakes and coastal areas, says he’s starting to see more activity in towns not traditionally known as vacation spots, such as Dover, in Strafford County, where sales last year were down 12 percent but median single-family prices were up by 9 percent to $338,533. 

“It’s spillover from Portsmouth,” said Dow. “Dover has become very popular. They’ve done a lot of work to the downtown to beautify it. Dover is doing well.” 

Dow said he’s generally seeing three types of new buyers in New Hampshire, usually from out of state: People planning to work remotely here full-time, people who used to travel a lot for vacations but now want to stay in one place, and people who originally retired to cities but now want the perceived public-health safety of less urban areas. 

“They don’t want to be stuck in a crowded [condo] buildings in a city, going up and own in elevators and pressing buttons that were pressed by other people,” he said the third category of buyers.  

How does Dow see the spring and entire 2021 markets unfolding?  

“I see it remaining tight. I don’t see it changing,” he said. 

Is It Sustainable? 

Stephen Morrissey, associate broker at Allison James Estates & Homes, which covers southern New Hampshire with a focus on the Nashua area, said he’s convinced the current red-hot market is on an “unsustainable trajectory.” 

Mortgage interest rates, now hovering between 3 percent and 3.5 percent, will rise sooner or later, especially if there’s a significant uptick in inflation and the Federal Reserve responds with short-term interest rate hikes, he said. Other industry figures say the eventual lifting of the federal government’s pandemic-era foreclosures and evictions ban could lead to a flood of new homes hitting the market. 

But until then, most see the same high demand/low supply dynamics driving the market. 

So, what’s the strongest–performing market? It’s hard to ignore coastal Rockingham County’s 13 percent rise in the median single-family home price last year to $420,000 and its rise by 16 percent year-over-year to $433,000 in February, according to data. Those represent the highest single-family median prices in the state. 

But the highest percentage price increases in the state? The title goes to Coos County, where the median single-family price was up 27 percent to $140,000 last year. And all signs point to another strong year in the area, market-watchers say. 

As for condos, their story is slightly different. Last year, statewide condo sales were down by 4 percent to 5,234 units, with prices up 14 percent to $240,000. But sales were actually up in February by 15 percent year-over-year to 624 units with median prices increasing to $245,000 

Market-watchers say they expect condo prices, if not sales too, to pick up this year as more people flock to the state for remote-working reasons. 

Paul Wheeler, broker-owner at RE/MAX Presidential in North Conway, said the current market is clearly taking its toll on young first-time buyers, who simply can’t compete against older and more affluent buyers who either have the savings to buy homes or can “trade in” their current houses to buy a new one. 

“It’s so hard on those who can’t pay cash and can’t afford to get into bidding wars,” said Wheeler. “It’s gotten worse for them. It’s such a tight market. I don’t think it’s going to change soon.”