NHAR president expects an increase in listings, but not enough to ease demand
As the residential real estate season begins to transition to spring, when activity in the market typically blooms, supply of available properties continues as the biggest challenge.
“We are likely to see an increase in listings as we move into the spring months, however not enough to ease demand,” said Joanie McIntire, president of the New Hampshire Association of Realtors (NHAR).
“Months’ supply” is the term brokers use to gauge the availability of single-family homes and residential condominiums/townhouses. It reflects the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Four to five months of supply is average, according to Redfin. A lower number means a sellers’ market, while a higher number means that buyers typically have the market advantage.
The last time New Hampshire was in that 4-5 month sweet spot was 2014 and 2015. It’s been gradually slipping ever since, hovering in the 1-2 month range since 2020.
The NHAR’s January real estate trends report shows a supply of houses at 1.3 months, while the months’ supply for condos is 1.4. The supply for both houses and condos has been dropping since October.
“As expected, the inventory in January continued to fall. This is in line with the seasonality of the housing market,” said McIntire, an associate broker at Coldwell Banker J. Hampe Associates in Concord. “NHAR continues to work with elected officials to loosen zoning, which will allow for expanded development. This is our best hope for a more balanced market.”
That effort to facilitate more housing through the easing of some local zoning restrictions continues on the legislative front, as New Hampshire representatives and senators consider several bills related to the housing industry in the current session.
But efforts to ease those restrictions has some communities, such as the town of Durham, wary.
A ‘bad bill’
HB 1281, for instance, prohibits a local zoning ordinance or regulation from restricting the number of occupants in a residential rental property to less than two occupants per bedroom. That would effectively strike down a Durham zoning restriction of no more than three unrelated occupants.
Durham Town Administrator Todd Selig wrote to a legislative committee reviewing the bill that “our collective goal in 2024 as a state is to foster the creation of additional workforce housing and more reasonably priced housing of different types in appropriate locations.
One community should not be sacrificed for another to find solutions. HB 1281 will do nothing to advance that goal and will harm the quality of life for ordinary citizens who live in our many Durham neighborhoods impacted by student housing.
HB 1281 is a cautionary reminder of the reality that not all bills dealing with housing in this legislative session are good bills. HB 1281 is a bad bill.”
One technique to increase housing is more ADUs (accessory dwelling units) that can be built on a property already accommodating a single-family house. New Hampshire law already allows ADUs; HB 1291 increases the number of accessory dwelling units allowed by right from one to two and increases the allowable maximum square footage.
“This proposal is somewhat controversial, but there are a few built-in provisions that could give towns flexibility in implementing the requirement. The town is watching this proposal carefully,” Selig said in a weekly newsletter to residents.
Meanwhile, the New Hampshire Housing and Finance Authority has a 2024 Homeownership Conference scheduled for March 26 at the Grappone Center in Concord. According to the authority, the conference will delve into the current housing landscape, solutions for increasing inventory, as well as ideas on affordability, availability and access.
Granite State benefits from ‘increased housing supply’
According to a new report cited by Gov. Chris Sununu, the state is now on track to bring 25,000 new units online by 2024 due to the $100 million InvestNH state housing program. His office said a new report from the NH Department of Business and Economic Affairs (BEA) finds that the total number of permits issued for residential construction has increased by 18%, with the highest number of actual permits issued in 2022 since 2011. Of those new permits, 41% are for multifamily housing projects.
InvestNH projects have been completed in Concord, Conway, Manchester, Lebanon and Littleton, bringing 129 new units to market — 88% of which are affordable housing.
“After launching InvestNH — the most transformative and historic housing fund this state has ever seen — Granite Staters are benefiting from increased housing supply,” Sununu said in a statement. “By focusing our efforts on delivering affordable housing to communities across New Hampshire, this program has a real impact for Granite State families and allows employers additional opportunity to attract new workers from beyond the 603.”
According to the governor’s office, the InvestNH program has two components: a capital grant program for multifamily rental development, and municipal grants to promote the construction of affordable housing in towns and cities. The program attracted more than 100 developers who applied for the funding for projects in several communities. BEA is administering the program statewide.
The NHAR January report shows that the median price for a house was $445,000, an 8.5% increase over January 2023. The median price of a condo was $425,000, up 25%.
Of the 10 counties in the state, Rockingham remains the priciest for a single-family home at $560,000. At $630,000, Carroll County has the highest condo median.
The Seacoast Board of Realtors, which draws data from within Rockingham County, reports a January median price of $683,750 for a single-family home, up 12% from the previous January. The 32 residential sales were the fewest in 14 years.
The board reported 36 condominium sales, up 71.4% from last year, with a median price of $670,450, an increase of 1.2% from last year.
“January volume — and for that matter February — is traditionally among the lowest for the selling year,” said Lynn Lagasse, president of the Seacoast Board of Realtors and a broker with Keller Williams Coastal Realty in Portsmouth. “We continue to see the law of supply and demand push sale prices upward.”
The board draws its stats from Exeter, Greenland, Hampton, Hampton Falls, New Castle, Newfields, Newington, North Hampton, Newmarket, Portsmouth, Rye, Seabrook and Stratham.
John Rice, longtime statistician for the board and a broker with Tate & Foss Sotheby’s International Realty in Rye, notes that sales are being hurt by a record shortage of properties.
“Maybe folks are holding back to see what the Fed does,” he said in reference to mortgage interest rates. “In the meantime, big sales rule, and we are seeing some strong numbers out there. For those who can pay cash or have no financial restrictions, the sky appears to be the limit. I suspect we’ll continue to see record-high prices in the months ahead.”
