New Hampshire’s spring real estate market wasn’t a bust by any means. Demand remained strong. Prices continued to modestly increase statewide. Bidding wars frequently broke out over homes priced below $400,000. 

But there’s a palatable sense of disappointment among brokers and Realtors that the spring market has fallen into some sort of rut, caused mainly by a continued decline in the number of homes for sale in New Hampshire and a feeling the market won’t significantly improve this year unless more existing homeowners suddenly decide to put their homes up for sale. 

“People are not buying homes as much because they’re not finding homes to buy,” said Stephan Morrissey, senior associate broker at Allison James Estates & Homes in Nashua. “It’s all about lack of affordable housing in the state. There’s simply not enough housing.” 

As a result of the sometimes-contradictory nature of the spring real estate market – which includes a softening of prices in some submarkets, despite lower inventory – brokers and agents have learned a number of lessons, some of them new, some of them new twists on old adages. 

Another Big Sales Drop 

To better understand the lessons learned, a review of new housing data is in order. 

According to data from The Warren Group, publisher of The Registry Review, only 775 single-family homes were sold in New Hampshire in May, down 27.9 percent compared to a year ago. Meanwhile, year-to-date sales of single-family homes stood at 2,913 at the end of May, down 25.12 percent compared to a year ago. 

Statewide sales of condominiums fell to 296 in May, down 24.8 percent compared to May 2022, while year-to-date sales declined to 1,182, down 19.54 percent compared to the same five-month period in 2022.  

The statewide median price for single-family homes rose by 3.9 percent in May, to $452,133, while the year-to-date price increased by 5 percent, according to The Warren Group. 

In May, condo prices were very solid, increasing to $360,000, or by 14.9 percent. Year-to-date median condo prices increased to $345,000, up 15 percent. 

But last month’s statewide prices hide what’s going on within different geographic areas of the state and within different price categories of homes, especially single-family homes. 

Median single-family prices in Hillsborough County, which includes Manchester and Nashua in southern New Hampshire, rose by only 1 percent in May, to $467,000, while year-to-date prices stood at $435,000, down 1 percent. 

Other counties with negative to no single-family price growth last month include Belknap (down 1 percent in May) and Grafton (0 percent in May).  

Meanwhile, Rockingham County’s, which includes the state’s high-demand coastal area, saw the median price rise by 4 percent in May, to $575,000, with the year-to-date price also up 4 percent. 

But Rockingham’s single-family price increase last month was modest compared to other less densely populated counties, such as Carroll (median price up 11 percent), Cheshire (up 9 percent), Coos (up 20 percent), Strafford (up 10 percent) and Sullivan (up 11 percent). 

All of which leads to the lessons learned this spring. 

Competition Below $400K Remains Fierce 

Morrissey, who mostly covers Hillsborough County and parts of Rockingham and Merrimack counties, said he’s seeing a softening in prices for homes priced at about $600,000 to $1 million, suggesting that many people can’t afford such homes, especially since interest rates started to rise last year. 

But he said competition for homes priced below $400,000 is still fierce, with multiple bids and lots of disappointed potential buyers unable to close deals. 

“If you see a house in the $350,000 to $400,000, you’ll often see a bidding war,” he said. 

‘Cash Is Still King’ 

Dave Smith, owner of Harbor Lights Realty in Sunapee, agrees that units priced at around $350,000 and below are the most sought-after homes on the market. 

Unfortunately, first-time homebuyers usually don’t win today’s bidding wars. Instead, winning bidders often tend to be those who take out equity on their existing homes elsewhere – and then buy second homes for cash in the Granite State. 

And those buyers are often from out of state, usually from Massachusetts, Connecticut, New York and New Jersey.  

“Cash is still king,” said Smith. 

‘It’s Not a Weak Market’ 

Because prices are starting to soften a bit in some parts of the state, such as in Hillsborough County, some real estate brokers and agents have suggested the industry may be transitioning towards a buyer’s market. 

But Adam Dow, CEO and luxury agent for the Dow Group at Keller Williams, disagrees that a buyer’s market is around the corner. 

The laws of supply-and-demand still apply, he said. 

He noted that the months of supply of homes for sale in New Hampshire may have recently increased from just over 1 month to about 1.5 months, suggesting to some that inventory woes might be easing. 

But Adams said 7 months of supply of homes for sale is normally considered a buyer’s market, not a mere 1.5 months. 

“From that perspective, we’re not even close to a buyer’s market,” he said. 

Supply for all types of homes remains low, he said, while demand for many types of homes remains high, roughly the same economic dynamics that have dominated the market for years now. 

“This is not a weak market,” Dow said. 

Homebuyers Need Extra Coaching 

Young homebuyers have always needed a little bit more coaching than others when it comes to buying a property. 

But today’s contradictory and confusing market requires educating all homebuyers a bit more about what they’re facing in their individual submarkets, according to real estate officials. 

The first rule of thumb for buyers: Don’t expect to find many, if any, discounts – or prices falling significantly below asking prices. 

The second rule of thumb: Expect to lose out a minimum of three times before landing a deal. 

The third rule of thumb: Don’t bid too high for properties, particularly in counties where prices have softened. This isn’t a frenzied, pre-pandemic housing market anymore. There’s no need to pay higher than necessary for homes, real estate officials say. 

The fourth rule of thumb: Listen carefully to a real estate agent or broker with knowledge of a specific town or neighborhood. This has always been true. But it’s particularly important when market contradictions and confusion abound, agents say. 

“It’s all a learning curve,” said Harbor Lights Realty’s Smith. 

“Anything on the market today will sell,” adds Dow. “But homes need to be priced right. In this market, prices have to be reasonable.”