There's a lot of moving parts in the housing market right now. Everyone I've been talking with has the same comments "it's a crazy market out there," "properties are moving quickly," "there are more buyers than sellers," "lots of cash offers with fewer contingencies." So, the saying goes for markets throughout the country.
Why is this surge occurring while we're in the midst of a national pandemic?
First, let's look at some of the recent stats:
• According to the Nation Association of Realtors, nationally single-family home prices increased year over year in 96% of the markets.
• The national median existing single-family home price in the second quarter was $291,900 — up 4.2% annually. Fifteen metro areas showed double-digit increases. The most expensive metro area was San Jose, California, at $1.38 million.
• Total housing inventory at the end of June was 1.57 million units…down 18.2% from one year ago with a 4-month supply of inventory at the current sales rate.
• In New Hampshire, single-family homes sale prices rose by 7.1% to $300,000 during the first half of the year compared to the sales period in 2019, according to the Warren Group.
• According to their data, the median sale price for condominiums shot up by an astounding 16.3% to $235,000 during the same period.
Let's look at some of the reasons we're seeing a "frenzy" of activity in the Lakes Region:
• Available inventory is well below where it needs to be to satisfy buyer interest.
• Houses are selling faster than they're coming on the market.
• After constant gradual improvements since mid-April, seller confidence has home increased, leading to a temporary boost in new listings coming on as the summer season replaces the typically active spring home-buying season, which was impacted by the COVID-19 onslaught.
• After being hard hit in March and April, new coronavirus cases remain stable in New England, and we're seeing buyers return to the market in force.
• Boston is up 12.5% at $675,050. Providence is up 11.4% to $434,500. This optimism leads to buyer interest for second homes in New Hampshire's Lakes Region.
• Mortgage rates are at historic lows in the 2.72% range, allowing so many consumers to qualify for attractive mortgages. This has added fuel to the fire as homeownership is now more affordable for buyers. It has also caused a refinancing boom allowing buyers to leverage for second home purchase in the Lakes Region.
• Part of the big surge in demand was due to stay-at-home orders being lifted. The pent-up demand was deferred to the summer months.
• The growth of working from home, homeschooling, etc. makes a "home" more important than ever…creating more demand for purchasing a bigger house or a second "escape home." People want land, outdoor recreation, lakes, mountains, and a "less dense" relaxing atmosphere, and the Lakes Region provides that natural environment.
• New Hampshire offers access to quality broadband and internet service, which is critical in the home buying process, particularly during the COVID-19 crisis, where so many families rely on excellent internet service well doing projects from home.
• New Hampshire ranks 14th in the country where more "rich" millennials are moving into the state than leaving, according to Smart Asset, a tech company. This was a good trend to hear considering New Hampshire, Maine, and Vermont have the county's oldest population. COVID-19 has also accelerated a gradual movement of out of state homebuyers escaping the densely populated cities south of New Hampshire's Lakes Region.
When the pandemic pushed the U.S. economy into a recession earlier this year, the majority of homeowners and buyers braced for falling home prices. Naturally, we saw that in the Lakes Region during the last recession. However, what we're experiencing today is the exact opposite. All of us in the Real Estate community here in the Lakes Region knew we had a housing shortage prior to the pandemic starting. The onset of COVID-19 clearly accelerated the movement of buyers to purchase property in our region. The pandemic simply created conditions that have led to the crazy busy market we are all experiencing.
This article was written by Frank Roche. Frank is president of Roche Realty Group with offices in Meredith and Laconia, NH, and can be reached at (603) 279-7046. Please feel free to visit www.rocherealty.com to learn more about the Lakes Region and its real estate market.