New Hampshire’s hot housing market has the state in crisis mode

Known for its rural communities, quaint towns, scenic lakes and mountain views, New Hampshire probably isn’t where you’d expect to see one of the hottest housing markets in the country, but the data says otherwise.

According to Zillowthe city of Manchester, New Hampshire, was the most popular market on the listing portal in 2024 in terms of page views, home price appreciation and time on market.

Alto’s research Data shows that the Boston-Cambridge-Quincy metro area, which straddles the Massachusetts-New Hampshire line, is the nation’s hottest housing market as of Dec. 18, with a Market Action Index score of 55.77. About New Hampshire as a whole, the Market Action Index score is 47, down from a peak of 61 in May 2024. Altos considers anything above 30 to be indicative of a seller’s market.

“I’m super busy at the moment,” he says Charissa Kennardan agent for Berkshire Hathaway HomeServices Verani Realty. “There is a lot of stock at the moment, which is good because there are now many more options for customers. Instead of looking at one home and immediately making an offer, they can view three to five homes.”

According to Kennard, some of her clients have even been able to negotiate concessions or a lower sales price on some properties. But even with that, she says the market is still hot. And with continued strong demand for housing in the state, it’s no surprise that New Hampshire is currently facing a housing crisis.

“The supply crisis and resulting affordability crisis are issues that have been building for a long time, and have truly reached fever pitch where it is widely recognized as the greatest challenge facing the state,” said Rob Dapice, the executive director and CEO of Housing in New Hampshire.

“We have one of the tightest housing markets and we have an economy that has grown faster than the economies of other New England states, which in many ways reflects that we view ourselves as a business-friendly state.”

The state’s business-friendly regulations and tax laws — which do not include income or sales taxes — have resulted in a significant influx of people in recent years. This was especially true after the COVID-19 pandemic opened up more remote work options.

According to facts of the tax authorities More than 16,000 people moved to the Granite State between 2020 and 2022, according to analysis by a local news station. United Of Lines‘ National Movers Study shows that in 2023, 54% of moves in New Hampshire were inbound. In contrast, 57% of movements in neighboring Massachusetts were classified as outbound.

This massive influx of new residents calling New Hampshire home has put pressure on the state’s housing inventory. According to data from Altos Research, the 90-day average number of active listings for single-family homes in the state was 1,913 in mid-December. While this number has grown over the past three years, it is still well below the 90-day average of 5,319 active listings recorded in December 2019.

“Housing inventory in the state has been declining over the last 12 to 13 years, but during COVID we’ve seen a pretty steep decline. We were already on our way, but COVID made us sprint to our destination,” said Bob Quinn, CEO of the New Hampshire Association of Realtors (NHAR). “We need to get 6,000 to 7,000 homes onto the market every month.”

The long-term situation of low inventory, combined with the continued influx of new residents, has resulted in a current housing shortage of 23,500, the NH Housing report said. 2023 Statewide Housing Needs Assessment.

Based on the state’s estimated population growth, nearly 60,000 additional housing units are needed between 2020 and 2030, while nearly 90,000 additional housing units are needed between 2020 and 2040. This is based on an estimate that approximately 52,500 households will be added between 2020 and 2030. or about 74,400 between 2020 and 2040.

Such a huge need for new housing has resulted in a huge increase in home prices across the state. As of mid-December, New Hampshire’s 90-day average list price was $600,000, up $50,000 from a year earlier and nearly $300,000 higher than in December 2019, according to Altos data.

Additionally, NHAR data shows that only 61% of homes for sale in the state are affordable to people earning the median income.

“It’s no wonder that a significant majority of New Hampshire families can no longer afford a home — and that’s a concern,” Quinn said.

According to Berkshire Hathaway’s Kennard, roughly 30% of the deals she sees with lower prices are full rehabs or teardowns. These are generally not the homes that buyers with a smaller budget or buyers use Federal Housing Administration (FHA) loans, she said.

“If you list something that costs $250,000 or less, it’s not going to be on the market very long unless it’s not really worth $250,000,” Kennard said.

For many, these challenges raise questions about whether the state is truly ready for further economic growth and development.

“A lack of necessary housing absolutely limits an area’s growth potential,” said Janel Lawton, director of the Office of Outdoor Recreation and Industrial Development for the State of New Hampshire.

“People want the economy to be even stronger, and it would be if we had more homes for sale. We have hospitals and employers telling us they can’t hire people because we don’t have houses to sell them,” said Andy Smith, the broker-owner of Badger Peabody & Smith Real Estateadded.

Editor’s note: Look for extra HousingWire will soon report on the New Hampshire housing market.