COVID-19, Mortgage Rates Create N.H. Housing Market 'Feeding Frenzy'
A few weeks ago, Liza Widdop and her kids visited Concord.
Arriving from out of state, they walked around the neighborhoods, trying to find their next home. But with no ‘For Sale’ signs in sight, they tried something unusual: They left letters at potential new homes, instead.
“The letter says, ‘Hello, I’m writing on behalf of my family of five. We are hoping to relocate to Concord, particularly this neighborhood, within the next couple of months,’” explains Liza.
Liza and her family have been attempting to relocate to New Hampshire for a new job for months. The real estate market, though, has kept them at a distance.
“We are pretty desperate here,” Liza’s letter to potential sellers concludes.
Desperate is not a good position to be in when buying a house.
But it’s the current emotional state for many potential buyers right now. After the pandemic essentially froze the local housing market this spring, demand for homes has surged, while the supply of homes on the market--inventory, in realtor speak--has remained low.
In short, it’s a mismatched market.
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“I got over the price that we were asking, and it was literally on the market for a day,” says Kathy Corson, a realtor on the Seacoast, of her own recent experience selling a second home.
Corson says houses across price ranges are selling within days--sometimes within hours--of hitting the market, with buyers receiving multiple offers, sometimes well above asking price.
Statewide, the median home price in August reached $350,000, up 15% from last year, according data from New Hampshire Realtors.
Signs of a COVID bubble?
“I don’t know if it is a bubble, I wouldn’t say it is,” Corson says. “I think the next 6 to 8 months will tell.”
The buyers market isn’t just limited to the state’s southern tier or coast. Even the North Country, which has seen a tepid housing market persist for decades, is seeing strong demand.
“People are just like in this feeding frenzy,” says Brenda Leavitt with Badger Realty.
Twice as many homes sold in Coos County this August than compared to last year.
Leavitt says some of her clients are attracted to the scenic vistas where they can ride out the pandemic in relative safety. Even homes needing some work are moving.
“My husband is a builder, and he is right now booked for the next year and a half,” she says.
The market is good for contractors, good for sellers, and of course, good for realtors.
But the tight market isn’t good for everyone.
Lower and moderate income families, especially those trying to buy their first homes, are getting squeezed. The pressure is even greater on Black and hispanic households, where median income is historically lower in the state.
“One of the major reasons is cash,” explains Ignatius MacLellan with New Hampshire Housing Finance Authority.
Buyers who have equity from their first home, or who can access family money, can offer to pay more in cash. In a bidding war, that can be appealing to a seller.
Many first time buyers, though, are limited to mortgages, which can slow down a transaction.
“That makes them less attractive to a seller who is often entertaining offers that are more cash down or all cash,” says MacLellan.
He says the current market isn’t just a result of the global pandemic or historically low mortgage rates. High building costs have stalled new home construction in the state for years, leading to a shortage that is made more pronounced by current conditions.
For Liza Widdop, who left the letters around Concord, homes have moved too quickly for her to even put in an offer.
After months with no success, her family decided to rent instead of buy.
“So it is not 100 percent ideal, but we are lucky we found it,” she says.
She’s hoping by the spring, the market balances a bit more in her favor.