Market Puzzle

Southeast NH Sales Underperforming Statewide Trends

Market Activity, Price Increases Lower

Houses in Portsmouth. Both Rockingham and Hillsborough counties are seeing slower price appreciation than the rest of the state. iStock photo

Hillsborough and Rockingham counties may be the biggest and most desirable real estate markets in New Hampshire.

But they’re not necessarily acting like leaders when it comes to single-family sales activity or median price increases of late.

The two southern counties – home to cities such as Manchester, Nashua and Portsmouth – are experiencing the same overall lack of houses for sale in New Hampshire.

For years now, demand for homes has far outstripped supply in New Hampshire, as has been the case throughout most of the U.S. Supply fell to historic lows last year.

But statewide new single-family listings this year have increased through May by 14.4 percent, while closed sales are up 5.5 percent year-to-date through May, according to new data from the New Hampshire Association of Realtors.

Those increases are coming off of last year’s super-low numbers, but they’re enough to raise same hope that maybe the supply side of the market may be loosening up a bit.

Data from The Warren Group, the real estate data analytics firm that owns The Registry Review, shows year-to-date single-family closed sales were actually flat year-to-date through May. That figure is sourced directly from registries of deeds and includes homes not sold via a multiple-listings service.

Slower Price Increases

But whether using NHAR or Warren Group closed-sales data, Hillsborough County’s single-family closed sales were comparatively unimpressive.

According to The Warren Group, Hillsborough’s year-to-date single-family closed sales increased by only 2 percent through May, only slightly above the Warren Group’s statewide closed-sales total.

For Rockingham County, home to Portsmouth and other highly desirable coastal communities, its year-to-date single-family closed sales were actually down by 5 percent through May, according to The Warren Group.

As for prices, statewide the median single-family home price increased by 11 percent year-to-date through May, to $465,000, according to The Warren Group, and the direct result of the current supply-demand imbalance according real estate market observers.

During the same time period, Hillsborough County’s median price for single-family homes rose by 15 percent to $499,500.

But in Rockingham County, year-to-date median single-family home prices rose to $580,000, up 6 percent, below the statewide rate of increase, according to The Warren Group.

Portsmouth Area ‘Still Crazy’

In all, the data doesn’t show that Hillsborough and Rockingham’s performances are completely out of whack compared to other parts of the state. But it does show both markets are underperforming.

Janet Sylvestor, an owner-broker of Great Island Realty in Portsmouth, said it’s hard to draw any conclusions about why Rockingham County’s closed sales are heading in the opposite direction of state trendlines.

But she said the Portsmouth-area market remains fundamentally the same as it’s been for a while now.

“The demand is still greater than supply,” she said. “There are still multiple offers because there’s not enough inventory.”

She noted that a $2.3 million home in her area, considered one of the most desirable and expensive in the entire state, recently sold just in a matter of days, indicating higher-end buyers continue to snap up properties.

“It’s still crazy,” Sylvester said of the strong demand to buy.

As for inventory, she said many potential sellers, particularly those looking to downsize, are still reluctant to sell due to today’s higher mortgage rates and the prices they might have to pay for alternative homes.

Buyer Fatigue Setting In?

Lisa Boucher, co-owner of Hearthside Realty in Manchester, said that most homes put up for sale these day are the being done out of necessity, such as after a homeowner’s death, divorce or the need to move for a new job.

She said higher home prices in the Manchester area may also be discouraging people from selling if they want to live in the same area after a sale.

“The sentiment seems to be, ‘Well, everything is so expensive, I’m staying put. I’m glad I like my current house,’” she said.

As for demand, Boucher thinks “a little fatigue” may be setting in among potential local buyers, many of them discouraged by escalating home prices and the fierce competition to buy.

The result: more affluent out-of-state buyers, mostly from Massachusetts who see New Hampshire as a less expensive housing market, are increasingly taking the properties that do come on the market, Boucher said.

Mark Lynch, a Realtor at RE/MAX Synergy in Bedford, agrees that increasingly higher prices are discouraging both buyers and some sellers.

“Once you get up to that $800,000, $900,000 or more than $1 million for homes, more specific types of buyers are needed,” he said.

Cheaper Homes Hard to Find

And homes for sale in lower price ranges are going fast – and often considerably above asking prices.

Lynch said a small ranch home in the Manchester area recently came on the market listed at $399,000.

His client expressed a willingness to go as high as $450,000 for the home – and without an inspection. It still wasn’t good enough.

The final sale price after multiple bids: more than $500,000, Lynch said.

Another ranch home in Derry was listed at $575,000 – and it ended up selling well in excess of $600,000.

“My [buyer] client was just shocked,” he said. “The price just scared her away. It’s still crazy out there.”

Some real estate market-watchers express guarded optimism that inventory in Rockingham and Hillsborough counties may increase in June and July, often strong housing-market months in New Hampshire.

Great Island Realty’s Sylvester, in Portsmouth, said she’s seen a recent small bump in listings.

“Things have just picked up a bit,” she said. “There seems to be more (inventory) in the pipeline. I know it’s increased for our firm, internally.”

“In the places I work in, I’m seeing a slight increase in listings,” said Lynch, who primarily covers Hillsborough, Merrimack and Rockingham counties. “So I see opportunities for buyers who are still in (the search). If they stick to it and if they’re patient, they could benefit.”