Tight Inventory Drives Fewer Sales, Higher Prices

It's all about supply and demand in economics and in the real estate market, this theory holds true now. Low supply of inventory and buyer demand has real estate prices in New Hampshire up with a median sales price in August of $490,000. Home prices have continued to sit at record high levels nationally and locally thanks to a limited supply of homes for sale.

Higher mortgage rates, along with elevated sales prices and a lack of housing inventory, have continued to impact market activity during the summer homebuying season. According to Freddie Mac, the average 30-year fixed-rate mortgage has remained above 6.5% since May. As a result, existing home sales have continued to slow nationwide, but this has done little to cool home prices. These prices are not expected to fall in the near future, if at all.

When we consider the inventory, all indications appear to show the single family inventory is not going to increase anytime soon. In terms of new listings coming on the market in August in the state of NH, those decreased 8.8 percent for single family homes but has a slight increase of 1.5 percent for townhouse-condo properties. This may indicate sellers moving from condo living to a multigenerational living situation, or the selling of properties that may be considered secondary homes.

As for days on market for a property in NH, these increased slightly in August to 20 days on market for a single family home and 26 days on market for townhouse-condo properties. While up a bit, these days are still historically low.

In terms of "months of supply", currently there are only 1.8 months of supply for single family homes. Meaning, if nothing else came on the market, all inventory would be sold out in less than 2 months. Months of supply is a key indicator of the market - a "seller's market" is 4 months or under, a balanced market is 5-6 months and a "buyer's market" is considered 6 months or more. This is still a "seller's market" and all market indicators show that.

It is important to note, while pending sales are down over the same time last year, in part due to higher mortgage rates and low inventory, if you are considering selling, this is still a strong market. If you are considering buying – prices are not expected to go down and mortgage rates should level out – consider your personal situation - if you are ready to buy, this is a good time. Either way, reach out to one of our agents today, they can inform you about the market in your neighborhood and more.