The real estate market in the Lakes Region and the state of New Hampshire is still on a sizzling path, according to an article published in March by Realtor.com. All of us in the local real estate industry see what’s going on, fueled by record low inventories and a significant demand for Lakes Region and New Hampshire properties. The article indicated Manchester — Nashua, New Hampshire was the country’s hottest market in February of 2023, and in March 2023, Manchester — Nashua, New Hampshire was the second hottest market in the USA.
What’s remarkable is that Manchester—Nashua has been crowned as the hottest US market for the 20th time, yes #1 in the USA. When Realtor.com compiles the national rankings, they consider market demand, as measured by unique views per property on Realtor.com, and the pace of the market as measured by the number of days a listing remains active on Realtor.com.
It’s even more interesting that of the top 10 housing markets in the USA, 7 of them are located in New Hampshire, Massachusetts, Connecticut, and Rhode Island. These markets surround the Boston Metro Area, emphasizing the demand to be near the Northeast hub — Boston. When you see the red hot demand for Southern New Hampshire property, this demand has pushed up to Concord, New Hampshire, which showed up in the top 20 hottest markets and even hit the #1 spot in June of 2022. So it’s no wonder the Lakes Region experienced a very strong market. People love the Lakes Region; it has become their recreation haven with many quality lakes and mountains. The second home/vacation market has been exceptional. All of us Realtors® out there need product, yet the inventory levels are at record lows.
I’ve pulled up some current statistics for closed sales for the first quarter ending 3/31/2023 compared to the same period in 2022 and stats on the current number of single-family homes for sale:
- Closed sales in New Hampshire dropped -19.7%, with 1,905 closed sales over 2,373 closed in 2022.
- Closed sales in Belknap County dropped -34.5%, with 108 closed sales over 165 closed in 2022.
- Closed sales in Carroll County dropped -21.7%, with 119 closed sales over 152 closed in 2022.
- Closed sales in Grafton County dropped -2.7%, with 142 closed sales over 146 closed in 2022.
- There are currently 160 single-family homes for sale in the Lakes Region (consisting of 25 towns and cities) with a median asking price of $699,900. The lowest asking price is $35,000, and the highest is $14,900,000.
- There are currently 814 single-family homes for sale in New Hampshire, with a median asking price of $548,950. The lowest asking price is $29,000, and the highest is $19,395,000.
- As of Thursday, April 20th, the current average interest rate for a 30-year fixed rate was 6.94%, increasing 13 basis points from a week ago. According to the Bankrate National Survey of Large Lenders, the average fixed rate at the start of April was 6.32%. So yes, we have seen an increase. However, if you compare loan offers from a few mortgage lenders in the Lakes Region, you’ll have a much better chance of securing a more competitive rate than the 6.94% national average. The rates have gone up and down because treasury yields have fluctuated wildly since the collapse of two mid-size banks last month. Yes, the Federal Reserve rate hikes have impacted the national rates for borrowing; however, rates on 30-year fixed-rate mortgages usually track the moves in the 10-year treasury yield. In any case, don’t expect interest rates to retreat back to the good old days of 1-2 years ago. We were spoiled with record-low rates for quite some time, and the Fed still has to conquer the inflation game, which will take an extended period of time. The average 30-year mortgage rate hit 7.08% in the fall, the highest we have seen in two decades. Hopefully, the rates will experience a bit of a drop for the remainder of the spring and summer season.
- In 2022, national home sales fell 17.8% below 2021, the slowest year for home sales since 2014 and the largest annual decline since the housing crisis began in 2008, according to the National Association of Realtors.
- Nationally after decades of strong growth accelerated by low-interest rates and easy credit, commercial real estate is throwing up some red flags. More economists, business leaders, and bankers are concerned office space and retail property valuations have been falling after the COVID pandemic resulted in lower occupancy rates and changes in where people work and how they shop. Rising interest rates have also played a major part as well. I’ve noticed numerous recent articles raising concerns about the $1.5 trillion huge debt load coming due for the end of 2025. This mortgage debt is held mainly by small and medium-sized banks, and there are not a lot of banks anxious to lend money on office space because of the large vacancy factors. Many articles indicate that almost a quarter of office building loans need to be refinanced in the next year at obviously higher rates. With vacancy rates high at this time, it becomes very problematic and risky. A recent news report indicated the national vacancy rate for office buildings increased to a record high of 18.2% at the end of 2022. The vacancies in some markets like Silicon Valley, Manhattan, and Atlanta were over 20%. On the other side of commercial warehouses, industrial and hotels are performing well with much fewer vacancies. When you look at multi-family real estate, that sector has very strong fundamentals. The market is healthy, and there are low vacancy rates nationally.
The number of unit sales have decreased considerably during the first quarter; this is entirely due to the fact that the inventory levels around the Lakes Region and throughout New Hampshire are extremely low. The number of available properties has stayed at this level for some time, and we need to see more product coming on the market quickly; otherwise, it will continue to be a challenging time for the large number of buyers out there looking to buy property in our area.
This article was written by Frank Roche. Frank is president of Roche Realty Group with offices in Meredith and Laconia, NH, and can be reached at (603) 279-7046. Sales data was compiled by a NEREN search and is subject to change. Please feel free to visit www.rocherealty.com to learn more about the Lakes Region and its real estate market.