For this report, we are examining Belknap, Cheshire, Hillsborough, and Rockingham counties in New Hampshire; and we are focusing on three property types: single-family homes, condominiums, and multi-family homes.
The New Hampshire housing market experienced a similar outcome as Massachusetts in that sales decreased, and prices increased when compared to the mid-year of 2021.
Sales Decrease by 11.9%
Home sales decreased in all three categories, down by 753 transactions by 11.9% now at 5,598 total sales compared to the first half of 2021 with 6,351 sales.
- Single family sales decreased by 12.3%, condos and multi-families each decreased by 11%.
- Last year’s increase in sales was largely due to the market playing catch up after the pandemic slowed things down for New Hampshire, so that artificial increase plays into this years lower sales numbers.
- The chart below depicts that frenzied market in 2021, and how this year so far has been less active.
- The decrease in sales is largely due to the rise in mortgage rates diminishing buyer affordability, new second mortgage rules for vacation/investment properties, and some buyers not wanting to buy in what they think is the top of the market.
Prices Increase 17.4%
Average prices for homes climbed $78,869 to $517,555 in the first half of 2022, a 17.4% increase over the same time frame in 2021 at $440,686.
- Prices increased in all three categories: singles up by 15.8%, condos up 20.8% and multi-families up by 27.5%.
- 2021 was a frenzied market comprised of buyers consuming active listings almost as soon as they were placed on the market, which drove up competition and bidding wars thereby driving up prices significantly.
- The rising rates will impact prices, but it’s not likely we will see prices fall this year. They may simply not rise at the pace we’ve been seeing, but a drop in prices is highly unlikely.
- The chart below shows how prices over the past four years have all steadily increased significantly year over year and 2022 is no exception.
Predictions for the Rest of the Year:
Like the Massachusetts mid-year performance, Belknap, Cheshire, Hillsborough, and Rockingham counties have exhibited a decrease in sales and an increase in prices. The change in this market feels like growing pains for buyers and sellers, but this change is necessary to achieve a more balanced market- which will be especially helpful for those who are selling and buying at the same time.
Buyers have had to stay strong over the past few years with competition at its highest, but now that competition is starting to diminish, they now have to deal with rising mortgage rates. There is a cost of waiting, as prices clearly have increased over time. Rates aren’t likely to go below 5% and are predicted to continue their ascent barring any unforeseen global event with economic impact. Now is better than later.
For inventory to rise, seller activity will hopefully begin to increase as buyers are either securing homes or deciding to wait another year and postponing their search. Whatever pulls buyers out of the pool, as long as sellers keep listing, there will hopefully be an increase in supply to alleviate the pressure on current buyers.
Sellers need to be realistic about the price they list at now that buyer affordability is tighter than it has been in years. Sales you hear about from the spring are accepted offers closer to the winter when rates were lower, and so was inventory. Buyers had more money to play with and less to choose from, so homes were selling in bidding wars which drove the sale price up. That’s not the market climate now, so sellers who are listing high may experience low buyer interest as there’s more to choose from, so a price adjustment may be necessary to sell faster and for more money.
With prices holding strong, a market crash isn’t on the radar despite the signs of the market decelerating. The market finding balance is a sign that hopefully in the next year or so, normalcy will develop. Buying and selling now is always better than waiting.
Data provided by NEREN then compared to the prior year.