New Hampshire Real Estate Inventory Crisis

New Hampshire Real Estate Lacks Inventory

A Multifaceted Analysis of Rising Interest Rates and Beyond

New Hampshire is currently facing a significant real estate challenge: a glaring lack of inventory. This shortage of available properties on the market is not merely a localized concern but reflects a broader phenomenon that’s sending ripples across the state’s entire real estate landscape.

This intricate issue, shaped by various factors such as demand and supply dynamics, demographic shifts, construction constraints, and more, has been further complicated by the trend of rising interest rates. This week, we will take a comprehensive look at the current inventory crisis in New Hampshire, delve into the profound impact of rising interest rates, and explore potential strategies to navigate this complex situation.

Currently, for the entire state, there are 1986 active listings with an average of 31 days on the market. In the 7 towns that surround Lake Winnipesaukee, there are 150 active listings with an average of 41 days on the market. It’s important to note that this includes some properties that have been on the market for over a year. Also of note is the current trend of “price improvements,” with an average price reduction of just over 8%.

Understanding the Inventory Shortage: A Closer Look at New Hampshire

Why is Inventory Shrinking?

  1. Demand Outstripping Supply: A combination of native residents looking to purchase homes and newcomers drawn to New Hampshire’s appeal is driving demand. We especially saw this during the Covid pandemic, where working remotely gave greater flexibility regarding location. The trend has continued, however, and doesn’t seem to be slowing down. After all, we generally rank in the top 3 in the Best Places to Live category. 
  2. Limited New Construction: Stringent zoning laws in towns with high demand, high costs of land and materials, and labor shortages are slowing down the pace of new home construction. According to one source, the average cost to build a new home in New Hampshire is $350,000, which doesn’t include the land. Additionally, many towns are reluctant to allow accessory dwelling units, or (ADUs) which furth adds to the lack of development. 
  3. Investor Activity: Investment in real estate as rental properties or vacation homes, can reduce the inventory available for regular homebuyers. Short-term rentals are generally allowed, with the exception of a few towns. This trend has had a significant impact on inventory, causing many towns to consider town-level ordinances to limit the number of units being used for short-term rentals. 

Interest Rates: From Historical Lows to Rising Concerns

Interest rates act as a vital lever in the real estate market, influencing everything from buyer affordability to investor activity.

The Low-Interest Era

Historically low-interest rates have played a part in stimulating home buying in New Hampshire. The ability to secure affordable mortgage loans encouraged more people to enter the market, inadvertently contributing to inventory depletion. While interest rates have significantly increased, it hasn’t had the expected result of lowering home values and increased inventory.

As US monetary policy focuses on slowing inflation, here’s how this shift impacts the New Hampshire real estate market:

  1. Cooling Demand: Higher interest rates mean more expensive mortgages. This could potentially cool demand, but the lack of inventory may persist as sellers hesitate and construction lags.
  2. Seller Dilemma: Higher rates discourage current homeowners from selling, as their next mortgage could be more costly, further reducing available inventory.
  3. Impact on Prices: While some expect rising rates to stabilize or even reduce home prices, the persistent lack of inventory is counteracting this effect, maintaining upward pressure on prices. However, as noted at the beginning of the article, there are some signs this trend is potentially changing.

Crafting a Path Forward: Customized Solutions for New Hampshire's Inventory Crisis

To effectively address the intricate real estate inventory issue in New Hampshire, a set of tailored, forward-thinking strategies are necessary. Given the complex blend of factors at play — demand, supply, construction limitations, demographic changes, and the new reality of rising interest rates — the solutions should embrace a multi-pronged approach.

Encouraging Construction and Development

One of the primary drivers of the inventory crisis is the shortfall in new housing construction. To tackle this, state and local governments could work collaboratively to streamline the construction permitting process and relax stringent zoning regulations where applicable.

Furthermore, incentives could be provided to developers to encourage the building of both single-family and multi-family homes. Addressing labor shortages in the construction industry — perhaps through vocational training initiatives or partnerships with technical schools — could also stimulate the rate of new housing creation.

Strengthening Affordable Housing Efforts

As house prices soar amidst the inventory crisis, affordable housing becomes even more crucial. Developing a strategic plan to bolster affordable housing projects can ensure that everyone, irrespective of their income bracket, has access to suitable homes.

Local governments could consider partnerships with non-profit organizations or private sector entities to increase investment in affordable housing. Public policies could also be crafted to encourage the construction of affordable units in new developments.

Supporting First-Time Homebuyers

Aspiring homeowners, especially first-time buyers, are often most impacted by shrinking inventory and escalating prices. Expanding support programs that assist these buyers can be an effective strategy.

This could include enhancing education about the home-buying process, increasing awareness of available resources, and possibly expanding down payment assistance programs. By easing the path to homeownership, more individuals could feasibly transition from renters to owners, helping to stabilize the market over time.

The impact of low inventory and the rise of short-term rentals is having an impact on long-term rental prices as well, making the state nearly unaffordable to low and even middle-income families.

A Path Forward for New Hampshire

The real estate inventory crisis in New Hampshire is a multifaceted challenge intertwined with rising interest rates, demand and supply dynamics, demographic shifts, and broader economic factors.

To navigate this complex landscape, a concerted effort involving policymakers, real estate professionals, community leaders, and residents is essential. Tailored solutions, rooted in a deep understanding of New Hampshire’s unique context, can guide the way forward.

The journey may be fraught with uncertainty, and there are no quick fixes. But through collaboration, innovation, empathy, and perseverance, New Hampshire can forge a sustainable path toward a more balanced and resilient real estate market. The goal is clear: a thriving, inclusive, and stable housing landscape that resonates with the core values of the Granite State and serves the best interests of all its people.

Randy Miller is a Sales Associate with Roche Realty Group in Meredith, NH

This article was written by Randy Miller. Randy is a Realtor® at Roche Realty Group with offices in Meredith and Laconia, NH, and can be reached at (603) 279-7046. Data was compiled by a NEREN  search on 08/03/2023 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

Waldron Bay on Lake Winnisquam with 3,482 feet of shorefront.

Exclusive Waldron Bay Market Report: Is It Time to Cash In?

There are so many water-access communities in the Lakes Region to consider when looking for ...
Read More →
Winter Wonders in New Hampshire’s Lakes Region: A Season of Adventure and Tradition

Winter Wonders in New Hampshire’s Lakes Region: A Season of Adventure and Tradition

As snow covers the Lakes Region of New Hampshire, the area becomes a winter destination ...
Read More →
Balmoral – One of Winnipesaukee’s Original Water Access Communities

Balmoral – One of Winnipesaukee’s Original Water Access Communities

There are so many water-access communities in the Lakes Region that provide great memories. Let’s ...
Read More →
Four Years of Sales Activity at the Village of Winnipesaukee

Four Years of Sales Activity at the Village at Winnipesaukee

The Lakes Region of New Hampshire is known for its rural communities, quaint towns, scenic ...
Read More →
Suissevale on Lake Winnipesaukee – a Popular Community in Moultonborough

Suissevale on Lake Winnipesaukee – a Popular Community in Moultonborough

When you navigate the shores of Lake Winnipesaukee, there are 71 square miles of water ...
Read More →
Gunstock Acres in Gilford: 7 Years of Sales Activity

Gunstock Acres in Gilford: 7 Years of Sales Activity

We have so many interesting communities in the Lakes Region. Let’s take a look at ...
Read More →
Lakeside Setting at Long Bay and South Down Shores

Four Years of Sales Activity at South Down Shores and Long Bay

South Down Shores and Long Bay on Lake Winnipesaukee are two very popular water access ...
Read More →
Real Estate Goals: From Dream to Reality in 2025

Real Estate Goals: From Dream to Reality in 2025

As we approach the new year, it’s the perfect time to turn your real estate ...
Read More →
Wolfeboro New Hampshire Community Bandstand

New Hampshire’s Real Estate Data to Date

The excitement of the holiday season and Christmas approaching this week often comes from the ...
Read More →
Why Home Inspection by Licensed Home Inspectors are Critical

Why Home Inspections Are Critical

We have a competitive market here in the Lakes Region due to the lack of ...
Read More →
Lakes Region's Future: Balancing Natural Beauty and Urban Growth

Lakes Region’s Future: Balancing Natural Beauty and Urban Growth

When you drive around the Lakes Region, you will see a considerable amount of new ...
Read More →
12 Essential Winter Home Maintenance Tips for New Hampshire Homeowners

12 Winter Home Maintenance Must-Dos for New Hampshire

Winter in New Hampshire brings its unique set of challenges for homeowners. From freezing temperatures, ...
Read More →
Roche Realty Group Launches Toys for Tots Drive in Meredith

Roche Realty Group Launches Toys for Tots Drive in Meredith

Spreading Holiday Cheer in the Lakes Region! Roche Realty Group is happy to announce its ...
Read More →
Shop Local at Small Business Saturday in NH’s Lakes Region

Shop Local at Small Business Saturday in New Hampshire’s Lakes Region

We have so many things to be thankful for here in New Hampshire: plenty of ...
Read More →
Emily Brock Joins Roche Realty Group

Emily Brock Joins Roche Realty Group

MEREDITH – Frank Roche, President of Roche Realty Group, Inc, is pleased to announce that ...
Read More →
Inflated Asset Classes and the National Debt

Inflated Asset Classes and the National Debt

A question all of us get asked is have we gotten ahead of ourselves in ...
Read More →
Waterfront Home Sales Activity on 10 of our Lakes Region Area Lakes

Waterfront Home Sales Activity on 10 of our Area Lakes

Most of the leaves have fallen, and political signs are disappearing in the Lakes Region. ...
Read More →
Woman hiking at Artist's Bluff in autumn. View of Echo Lake. Fall colours in Franconia Notch State Park. White Mountain National Forest, New Hampshire, USA

New Hampshire Named Second Safest State in America

In recent years, the country has faced increasing public safety challenges and severe climate events. ...
Read More →
Lots Of Activities Left in The Lake’s Region heading towards the end of fall

Lots Of Activities Left in The Lake’s Region Before Winter Arrives

A burst of warm weather & the crisp air of autumn has extended our fall ...
Read More →
join us for a festive celebration at Twin Barns in Meredith on Sunday, October 20th starting at noon as we raise a glass to the release of the Official Beer of the NH Pumpkin Festival!

NH Pumpkin Festival’s Beer Release Party at Twin Barn in Meredith

The peak foliage and perfect fall weather is as good as it gets in the ...
Read More →
Wolfeboro Waterfront New Hampshire Lakes Region Market Update for 9 Months

Lakes Region Market Update for 9 Months

It’s Columbus Day weekend, with lots of visitors enjoying the fall spectacle of color. I ...
Read More →
The Evolution of the Lakes Region: Balancing Growth and Tranquility

The Evolution of the Lakes Region: Balancing Growth and Tranquility

The Lakes Region of New Hampshire, known for its picturesque landscapes, serene waters, and small-town ...
Read More →
Mountain Bliss: Hiking the Peaks of New Hampshire in Autumn

Mountain Bliss: Hiking the Peaks of New Hampshire in Autumn

This past Tuesday was a bright, sunny autumn day, and I had no appointments scheduled, ...
Read More →
Why Fall is the Perfect Time to Sell Your Home in the Lakes Region

Why Fall is the Perfect Time to Sell Your Home in the Lakes Region

The fall season in New Hampshire’s Lakes Region offers a unique and strategic opportunity for ...
Read More →
Important Fed Decision and The Fall Market in The Lakes Region

Important Fed Decision and The Fall Market in The Lakes Region

On Wednesday, we received the much-anticipated Federal Reserve decision to slash its key overnight borrowing ...
Read More →
New Hampshire Housing Market Trends Broadview Condos in Gilford, New Hampshire

New Hampshire Housing Market Trends

New Hampshire’s housing market has been hitting the national airwaves and the Granite State has ...
Read More →
Second Home Market in The Lakes Region

Second Home Market in The Lakes Region

While practicing real estate in the Lakes Region during the past 48 years, I’ve always ...
Read More →
Meredith, New Hampshire. As summer fades into fall, the Lakes Region bids farewell to another season of sun-soaked days and bustling activity.

Goodbye Summer, Hello Fall

This summer has been one for the books in the Lakes Region. The area saw ...
Read More →
Disadvantages of Lockboxes and Unassisted Showings

Disadvantages of Lockboxes and Unassisted Showings

I was talking with one of our agents the other day, and she showed a ...
Read More →
Price Drops and Hot Sales: Inside New Hampshire’s Housing Market

Price Drops and Hot Sales: Inside New Hampshire’s Housing Market

On August 10th, I was reading an article on SmartNews called “If you live in ...
Read More →
Lakes Region Market Update for 7 Months

Lakes Region Market Update for 7 Months

Summer has been flying by, so I researched the closed real estate market activity for ...
Read More →
New Restaurant Hotspots You Need to Visit in the Lakes Region

New Must-visit Restaurants in the Lakes Region

The restaurant industry is a driver of economic growth and an integral part of the ...
Read More →
New Hampshire Housing Trends and Forecast

New Hampshire Housing Trends and Forecast

The New Hampshire housing market in 2024 is marked by increasing home prices and a ...
Read More →
Significant Land Sales in New Hampshire

Significant Land Sales in New Hampshire

As the summer of 2024 unfolds, the New Hampshire real estate market has seen a ...
Read More →

Inventory Shortage Impacts New Hampshire Housing Affordability

Real estate prices have continued to accelerate in New Hampshire after we saw a historic ...
Read More →
New Hampshire Advantage and Lakes Region Accolades

The New Hampshire and Lakes Region Advantage

We had a great Fourth of July in the Lakes Region, where we celebrated our ...
Read More →
New Hampshire's Fourth of July and Real Estate Boom

New Hampshire’s Fourth of July and Real Estate Boom

The Summer season is off and running, and it’s time to break out those fireworks! ...
Read More →
Summer in the Lakes Region on Little Squam

Ready, Set, Summer in the Lakes Region!

As the rumble of motorcycle engines fades into the background, the Lakes Region of New ...
Read More →
Manchester, New Hampshire, USA Skyline on the Merrimack River at dusk.

New Hampshire Cities in Top Hottest Housing Markets

New Hampshire keeps showing up on the radar as one of the hottest housing markets ...
Read More →
South Down Shores & Long Bay: Real Estate Market Analysis

South Down Shores and Long Bay: Market Trends

South Down Shores and Long Bay on Lake Winnipesaukee are two very popular water access ...
Read More →
Lake House Dreaming: Steps to Make It a Reality

Lake House Dreaming: Make It a Reality

Owning a waterfront home in New Hampshire’s Lakes Region is a treasured experience. For many ...
Read More →
Memorial Day

Beyond the BBQ: A Symphony of Remembrance and Summer Joy in the NH Lakes Region

Memorial Day serves as the official kick-off to summer in the Lakes Region. Towns ready ...
Read More →
Welcome to New Hampshire's Lakes Region

Welcome to New Hampshire’s Lakes Region

New Hampshire’s Lakes Region is one of the most stunningly beautiful places in the United ...
Read More →
The Granite State: Top Spot for Relocation in 2024

The Granite State: Top Spot for Relocation in 2024

New Hampshire just garnered major recognition as the best state to relocate to in 2024 ...
Read More →
Real Estate Sales Insights: Lakes Region Market Update

Real Estate Sales Insights: Lakes Region Market Update

It’s hard to believe we’ve already churned through 4 months of 2024. I researched the ...
Read More →
Market Trends – Spring 2024

Market Trends – Spring 2024

As a Realtor®, I’m always paying attention to the real estate market. I’m often asked ...
Read More →
Temperance Tavern in Gilmanton Sold

The Historic Temperance Tavern in Gilmanton Sold

Gilmanton—According to Frank Roche of Roche Realty Group in Meredith, the historic Temperance Tavern in ...
Read More →
Needs and Wants When Buying a Home Balanced

Balancing Needs and Wants When Buying a Home

In the current housing market, where choices are often limited, and demand frequently outstrips supply, ...
Read More →
Only two homes for sale at South Down Shores and Long Bay on Lake Winnipesaukee pictured above

Spotlight on Homes: New Hampshire Market Analysis

At present time, there are 1,007 single-family homes for sale in New Hampshire. The median ...
Read More →
New Hampshire Ranks High in Recent Studies

New Hampshire Ranks High in Recent Studies

Every day in our industry, we see how rising home prices have made it more ...
Read More →

Leave a Comment