A 2-tiered market reality of real estate in the Lakes Region

All of us in the real estate industry were shocked to see the median sales price for a single-family home in New Hampshire hit a record breaking $580,000 back in July. It was hard to accept the continued price increase considering the Granite State has been bucking the national price drops seen in states like Florida, Texas, California, Colorado, and Arizona. New Hampshire is such a small state in the price surge was likely driven by persistent low inventory (2.7 to 2.8 months of supply) and ongoing demand from out of state buyers from Massachusetts and other metro markets.

During the summer months, we started to see the active inventory levels rising slightly to around 3,000 homes for sale. However, this increase pales in comparison to what we experienced in 2015 with peaks of over 10,000 homes for sale. On a positive note, New Hampshire statewide active inventory has jumped nearly 19% year-over-year. That’s a good thing because the market is no longer a blind seller's frenzy. What we're seeing: buyers are negotiating harder and homes are sitting on the market longer (averaging about 32 days) statewide and increasing.

Sadly, New Hampshire’s problem and the Lakes Regions problem is affordability. According to New Hampshire housing it estimates $189,000 in family income to afford a $575,000 single-family home. In Rockingham County along the seacoast, it is even higher. It is estimated that between 1998 and 2025, when you adjust for inflation, the median sales price of single-family homes in New Hampshire went up by 129% while household income grows by only 19%. In New Hampshire it's estimated that only 15% of New Hampshire households fall into the $189,000 bracket or higher. So, you can see why we have an affordability crunch.

It appears that popular Southern New Hampshire hubs like Manchester (my hometown) and Nashua have dropped sharply in national “hottest market” rankings by Realtor.com. I have written previous articles where that region has ranked number one in the country a record 35 times. In fact, Manchester logged a streak of 10 consecutive months at the number one in 2024. This was driven by its affordability relative to Boston. It’s interesting to see that Manchester and Nashua region has dipped sharply over the past two months, falling to 30th in August and 38th in September. Does this signal something for the state in general? I believe it does. We now have a record price reality, creating a sticker shock for local buyers. At the same time, we have an income gap with only 15% of state households that can comfortably qualify for a $575,000 home. The market has also shifted, signaling a transition from a frenzy to a more cautious posture. Another squeeze is the current high-rate environment. With mortgage rates lingering at 7.5% for a 30-year fixed-rate mortgage.

The Lakes Region paradox

Our local market in the Lakes Region has split into two very distinct segments:

1. Highly competitive luxury waterfronts
2. A more disciplined, price-sensitive market for standard residential homes and condominiums

If you look at the 25 towns and cities in the Lakes Region, the median single-family sales price hovered around $554,500. However, the median asking price for active inventory sits higher at $699,000. We are noticing that buyers are pushing back against “fantasy pricing,” and properties that aren’t pristine are sitting on the market longer and experiencing price reductions.

The waterfront sector boom

When you contrast the above with true waterfront properties, the demand becomes slightly untethered from mortgage rates, with many cash purchases.

Look at the difference from standard residential homes.

Lake Winnipesaukee: Reaching a jaw-dropping record median price of $2,8 million for the year-to-date median sales price.

Squam Lake: A peak median sales price of $5.1 million year-to-date.

Newfound Lake: Saw a staggering 70% spike in its median sales price to $2.3 million year-to-date.

Yes, the luxury waterfront market has been rewriting the record books, proving the demand for the “Granite State lifestyle” has been accelerating.

Looking at the overall Lakes Region market, there are roughly 591 active single-family homes for sale and 132 active condominiums listed, totaling 723 residential properties across the 25 municipalities. However, the condominium number is way understated because of the huge number of new condominium projects under construction and many other projects approved. Not all of the future units have been placed on the market.

For buyers, there's an opportunity to leverage the inventory rise. If a home or condo has been sitting past the 40-day listing mark, there might be room to negotiate on price, closing cost, or repair credits. The average days on market has tipped past 39 days.

For sellers, the market certainly is not crashing — it’s simply correcting itself into a healthier, more intelligent space. The Lakes Region remains a premier legacy destination, where inventory will always be fundamentally constrained by the shorelines themselves.

While entry-level and mid-tier residential buyers are carefully calculating every dollar against 7.5% interest rates and record high prices, high net worth cash buyers are actively competing for a finite number of waterfront properties with pristine views, solid docking/amenities, and architectural highlights. Essentially, that’s the Lakes Region paradox that has evolved in my 50 years of practicing real estate in New Hampshire's Lakes Region. As the saying goes, “if you’re lucky enough to live at the lake, you’re lucky enough.”

•••

This article was written by Frank Roche, the president of Roche Realty Group, located in Meredith, and can be reached at 603-279-7046. Data was compiled from PrimeMLS and is subject to change. Visit rocherealty.com to learn more about the Lakes Region and its real estate market.