Home prices notch record high while supply remains low | What’s Working

A median-priced home on the Seacoast hit a record $615,000 last month, helping to fuel a statewide price milestone as well.

“It already has created an affordability issue,” said John Rice, chief statistician for the Seacoast Board of Realtors, which represents 13 cities and towns, including Portsmouth and oceanfront communities.

“The median price of a single-family home in Portsmouth is probably roughly $300,000 more than Dover and Rochester,” said Rice, an associate broker at Tate & Foss Sotheby’s International Realty in Rye.

“Every night, you see a sea of traffic going from Portsmouth to Dover and Rochester,” Rice said of workers commuting home.

Statewide, a tight inventory of homes for sale helped boost prices to a record $350,500 for a median priced home last month — 14.9% higher than a year earlier.

“It’s a great time to be selling and a lousy time to be buying,” said Russ Thibeault, a Laconia economist.

“We desperately need more housing in the state, but it takes a long time to get approvals and the housing construction industry has downsized,” Thibeault said.

Near-record low interest rates are taking some of the price sting away for buyers.

Interest rates for a 30-year fixed-rate mortgage dipped to a U.S. weekly average of 2.87% last week. Rates peaked at 4.94% in November 2018, according to Freddie Mac, a company that buys mortgages and repackages them to investors.

Houses even at the top end of the market often don’t remain available for long.

This month, a Cape with 5,488 square feet and 145 feet of direct water frontage in New Castle was listed for $5.85 million.

Someone scooped it up in three days, said Rice, whose firm listed the property.

For the first nine months of 2020, condominium prices rose faster than home prices compared to the same time last year.

“The condominium market is even hotter than the single-family market, probably because people are priced out of the single-family market and buying a condo instead,” Thibeault said.

Last month’s 1,901 closed home deals were the most for any September in state history, according to Dave Cummings, spokesman for the New Hampshire Association of Realtors. The month also featured 2,235 pending sales, a 39.1% spike from September 2019.

“Consider that we’ve had as many as 14,000 homes on the market at this time of year in the past, as recently as 10 years ago, and now we’ve got fewer than 2,300,” Cummings said.

“They say a balanced market is six-seven months’ supply,” he said in an email. “More than that is a buyers’ market, less is a sellers’ market. We’ve seen it as high as 16 months, and now it’s 1.4 months, or 43 days.

“Eventually, it would stand to reason that either inventory will increase or sales will decrease, but based on the continuing climb of both closed and pending sales, we’re clearly not there yet,” Cummings said.

What’s Working, a series exploring solutions for New Hampshire’s workforce needs, is sponsored by the New Hampshire Solutions Journalism Lab at the Nackey S. Loeb School of Communications and is funded by Eversource, the New Hampshire Charitable Foundation, Dartmouth-Hitchcock Medical Center, the New Hampshire College & University Council, Northeast Delta Dental and the New Hampshire Coalition for Business and Education.

Contact reporter Michael Cousineau at mcousineau@unionleader.com. To read stories in the series, visit unionleader.com/whatsworking.

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