Market Trends – Spring 2024

As a Realtor®, I’m always paying attention to the real estate market. I’m often asked about housing trends, what’s the market going to look like in the next year, etc… The last couple of years have been pretty wild. Through the pandemic, we saw inventory “fly off the shelf,” and prices climbed as demand was very high and nothing seemed to stay on the market for more than a week.

In 2022 and throughout 2023, interest rates started to climb, which many thought would cause prices to stagnate if not fall due to affordability. At that time, demand had also fallen off as those needing to finance began to pull out of the market, and homes that were already unaffordable became even more so with the rise of interest rates. However, due to a lack of inventory, this had little effect on the market.

This year, many, including myself, predicted rates would start to fall off by as early as March, but certainly by mid-year. The hope that inflation would lower to a more manageable level, however, has so far been dashed. In fact, we’re actually seeing a potential for rates to rise again as inflationary pressures have not only remained steady, they’ve actually intensified in some segments of the economy.

So why are home prices still steady, and in some cases, climbing in New Hampshire? According to Redfin.com, the median home sale price for all types of homes rose 10.3% from March 2023 to March 2024, while the national average was +4.7% for the same period. For just single-family homes, the median sale price rose to an all-time high of $496,800!

Across the country, most states are still seeing increases in median home sale prices, but here in New Hampshire, we’re seeing double-digit increases, even while inflation is eating away at savings and making day-to-day living less affordable. But why?

It’s worth considering that a significant number of homeowners have mortgages with exceptionally low interest rates, making them hesitant to sell and purchase a new home at much higher rates. This reluctance should naturally contribute to stabilizing the housing market and has shown that to be the case nationally. However, New Hampshire is an exception, witnessing home sale prices surging by more than twice the average percentage increase over the past year.

In my opinion, this has everything to do with what makes New Hampshire such a highly desirable state. The fact remains that people want to come to the Granite State. Whether it’s for recreation or to live full-time, there is no doubt that New Hampshire is one of the most attractive places to live in America.

Our state boasts a strong economy, low unemployment rates, and high-quality education systems. It’s these features that contribute to its attractiveness as a place to settle down. Moreover, New Hampshire offers a lifestyle that balances rural living with easy access to urban centers like Boston, providing the perfect blend for many.

With its natural beauty and relaxed pace, the Granite State has become a haven for those who can work from anywhere. Many see New Hampshire as an opportunity for a better quality of life. With New Hampshire’s lack of a state income tax and sales tax coupled with the state’s outdoor recreational opportunities, including its lakes, rivers,  mountains, hiking and snowmobile trails, and coastline, it becomes even more apparent why demand remains high.

Interestingly, while other markets begin to cool off, New Hampshire’s unique characteristics shield it from the downturns seen elsewhere. The limited inventory is just one piece of the puzzle. Demand is still being driven by out-of-state buyers who view New Hampshire not just as a place to own property but as a long-term investment in their lifestyle.

Looking back to the 2008 housing crash, New Hampshire fared far better than the majority of the country. This was in part due to policy that discouraged subprime lending but also the overall resistance to over-development. This has been a constant trend in New Hampshire.

As we look towards the future, it’s essential to consider the sustainability of such trends. While New Hampshire’s allure is not likely to fade, the state must address the housing inventory to ensure that it can continue to welcome new residents without compromising what makes it special. Initiatives to responsibly increase housing development, improve infrastructure, and enhance community resources are crucial to managing growth.

For now, the real estate market in New Hampshire reflects the state’s standing as a prized destination in the hearts of many Americans. It’s a complex market, but one that shows the resilience and continued appeal of the Granite State, even in the face of broader economic pressures. As a Realtor®, I remain watchful and optimistic, understanding that the trends we see today are a testament to New Hampshire’s lasting desirability.