The year-to-date median sale price up 30 percent in two years. The total number sales for the year down 18 percent over the same period. 

That’s where New Hampshire’s single-family housing market stood at the end of August, once essentially all of the sales that went under agreement this spring closed, but market-watchers say these dramatic shifts could be closer to stabilizing than may first be apparent. 

“Mid- to high teens appreciation rates in consecutive years is pretty hard to maintain,” said Chris Maisello, CEO of Bedford-based regional brokerage The Maisello Group, affiliated with Better Homes and Gardens. “I think the appreciation rate will slow, but there’s no indication – because of the inventory – that we’re going to see any price adjustments.” 

Indeed, the number of single-family properties for sale is at its lowest level in decades, and while June saw a burst of new home listings, July and August saw fewer listings than typically appeared in the same months in pre-pandemic years, according to statistics from the New Hampshire Association of Realtors. 

According to The Warren Group, publisher of The Registry Review, the year-to-date statewide median single-family sale price sat at $400,000 on Aug. 31, across 8,777 sales so far this year. 

Intense Demand, Little Building 

The spring market opened with a bang, said Jim Lee, a Realtor with RE/MAX Shoreline in Portsmouth. 

“It was nuts,” he said. 

The “scorching-red-hot” market left many buyers with serious fatigue, he said, after losing offer after offer. As a result, Lee said, many dropped out of the market during the spring, some of whom may not return until next year. 

“If that happens about five or six times, the psychological toll has got to be enormous on those people,” he said. “It’s like you go to open your presents at Christmas and all you have are six boxes with nothing in them.” 

Intense levels of competition and low levels of inventory pushed flocks of buyers to head further away from popular communities with good highway access like Derry, Merrimack or Salem. 

“You’re definitely finding people willing to live in secondary and tertiary markets. And the people who are moving here from other states, they’re more open to that, too. The further you get out from a primary market, you find that the pricing gets a little better,” Maisello said. 

The trend helped boost Hillsborough County to the fastest price-growth rate in the state’s populous Southeast, he said. 

At the same time, Maisello said, this spring’s buyers appear to have had a definite preference for more rural settings.  

“Coming here might be something that has been on someone’s mind for a long time and whether it’s COVID or something else that’s given them a reason to do it,” he said. “I think for people coming here, it’s the sense of community. New Hampshire doesn’t have large enough cities where there isn’t a sense of community everywhere you go.” 

Second Homes Become First Homes 

The state’s vacation destinations have been the biggest beneficiaries of this trend. Coos County saw its median year-to-date single-family sale price jump 54 percent to $169,466 in August over August 2019 according to The Warren Group. Carrol County saw similar performance, with the year-to-date median sale price hit $339,000 in August, 36 percent up from the same month in 2019.  

Grafton and Belknap counties saw similar growth, with median year-to-date single-family sale prices of $289,000 and $325,000 in August and growth of 31 percent and 30 percent compared to August 2019. 

The pandemic made buyers more aware of what Northern New Hampshire has to offer, said Randy Parker, broker/owner of Maxfield Real Estate in Wolfboro. The region’s low prices, compared to high-cost metro areas like Boston and New York City, have helped some decide it was time to relocate from cities or simply take advantage of ultra-low interest rates to buy the second home they’d always dreamed of. 

“Up here you can get a gorgeous, gorgeous farmhouse, 10-plus acres and privacy, the works for a million and a half [dollars],” he said.  

The volume of buyer interest is staying strong, he said.  

“The inventory really isn’t that low. We deal with death, divorce, job change [as primary seller motivations]. That hasn’t changed. What’s changed is that There are so many buyers we all have a pile on our desks of files: Find me this this and that. I want this price point,” Parker said. 

With demand so strong, many buyers are having to compromise on classic asks like a water view. But many who have to do this – particularly those same out-of-state buyers – are pouring the profits from selling their previous home into renovations.  

“They take what was a camp kitchen a gourmet kitchen, taking that fourth bedroom and making it an office,” said Matt Mayberry, the executive director of the New Hampshire Homebuilers Association, adding that many contractors who handle these types of projects are booking one to two years out. “Everyone’s running at 100 percent.” 

Will It End? 

The big jumps in prices that characterized the spring market may not continue into the fall or early 2022, market-watchers told The Registry Review. Just enough buyers seem to have been turned off to reduce the frenzy seen this spring and COVID vaccines have removed most sellers’ fears to open their eyes to the big profits they can make on their homes if they are thinking about listing. 

But the underlying conditions fueling the boom haven’t gone away and will clearly buffer the market from any price reductions or bubble conditions. 

“We’re in a moment in time when really the two largest demographic groups are in the housing market at the same time,” Maisello said. You’ve got 55 million Baby Boomers and 62 million Millennials, and the Millennials have become of housing-need age. And they’re all in the housing market with various needs at this time. That’s overlaid on the fact that, in the last 10 years, we’ve had the fewest number of new homes added to the existing housing stock [in decades]. So, you’ve had this perfect storm.” 

The homebuilding industry simply isn’t prepared to meet this level of demand, Maisello said, adding that towns’ and cities’ slow and sometimes drawn-out permitting processes aren’t helping matters. 

Mayberry agreed. As-is, homebuilders are “sprinting,” he said, even as some COVID-induced supply chain disruptions have been ironed out and lumber prices are moderating. Even with the Delta variant growing in concern, building suppliers are adapting to keep workers healthy and safe production lines running, he said. 

Growing the workforce is now key, he said, and the Homebuilders Association is launching outreach campaigns in schools, state prisons, among returning military veterans and among many minority communities, including women and LGBT Granite Staters.  

“We’ve got to educate the American public but we’ve got to educate the American public that a career – not a job, but a career – in the building trades is a good option,” he said.