Sales Down 16.4% and Prices Up by 14.9%
This report covers Cheshire, Hillsborough, Rockingham and Belknap counties. In this area, there were 2,452 fewer sales in 2022 than there were in 2021, a 16.4% decrease to 12,494. Prices rose by 14.9%, up $67,879 to $524,116. This includes all singles, condos, and multi-families and is consistent with national trends.
Sales decreased in all three categories. Multifamily sales decreased the most, by 25.7% and ended up with 658 sales, single families decreased by 17.3% to 8,500 and condos decreased by 11.7% to 3,308. Prices increased in all three categories with condo prices increasing the most, by 20% to $411,451. Multifamily prices increased by 18.6% to $543,583- and single-family prices increased by 13.9% to $566,391.
2019 – 2022 Home Sales by Month
Home sales were down every month in 2022 when compared to 2021, but that isn’t surprising given that 2021 as well as the second half of 2020 exhibited a frenzied post-Covid market. Normal seasonality along with tight inventory and rising prices kicked 2022 off slow and just as spring hit, a time when the market usually starts to heat up, rates began their ascent which decreased buyer affordability and kept sales down. Rates continued to climb as did prices and so sales didn’t have the chance to compete with last year.
2022 was the beginning of the very necessary market adjustment that’s happening right now. Market activity needed to slow down a bit so that inventory would have the chance to rise and there’d be more of a balance between supply and demand. That balance will eventually and hopefully make prices stop rising at the rate that they are currently so that the new normal mortgage rates don’t prohibit buyers from being able to afford the homes they want. Anthony explains how this market adjustment is predicted to impact the 2023 real estate market here.
Home Prices by Month
Prices went in the opposite direction and were up every month year over year. We haven’t seen prices fall in years and 2022 was no exception, but the only difference is that mortgage rates began their ascent in April making it more expensive to borrow, and yet prices still held on and climbed. Rising prices are a sign of strong demand despite the click-bait headlines trying to scare people into thinking that the market is going to soon crash– something they’ve been saying since the onset of Covid and yet something that hasn’t happened in the typical terms that is understood.
Sold Homes 2019 – 2022 by County
Sales decreased in all four counties with Belknap decreasing by 13.8% to 1,285 sales, Cheshire decreasing by 14.9% to 1,044 sales, Hillsborough by 17.5% to 5,494 sales and in Rockingham by 16.2% to 4,671 sales.
Average Selling Price of Homes 2019-2021 by County
Prices by county increased across the board with Belknap increasing by 12.5% to $573,694, Cheshire increased by 15.8% to $348,835, Hillsborough increase the most by 17.8% to $466,288 and Rockingham increased by 13.9% to $617,670.
Homes Listed – All of NH
In the chart below, you can see 2022 with the least amount of homes listed since 2014.
Listings overall for the state were down by 11.1% when compared to 2021. There were 22,949 listings in 2022 and 25,825 in 2021. Fewer listings coming off the hypermarket in 2021 retrospectively isn’t shocking, fewer sellers needed to sell as many took care of that in 2021, and those who would consider selling got stuck on the fence when the cost of borrowing increased and therefore made them want to hold on to their low rates.
Homes Pending (contract accepted) – All of NH
There wasn’t a chance of pendings keeping up with 2021. Fewer pending sales were one of the signs of the market adjusting in that inventory is going to begin to creep up a bit as there are more homes that last on the market longer than a day or two. Buyers experienced hesitation to make offers on homes whose prices have risen so much and with the mortgage rates making borrowing more expensive.
Pending sales decreased by 15.5% year over year as 2022 had 21,267 offers accepted and 2021 had 25,064. You can see in the chart below how 2022 was the lowest number of pending sales since 2014.
2022 and Beyond
New Hampshire performed similarly to national trends with rising prices and decreased sales. In many regards, 2021 was the largest year for real estate, but it wasn’t a sustainable pace for a healthy market. Therefore, seeing any decreases in activity during 2022 should actually be welcome signs of a much-needed market adjustment that is now unfolding. 2023 will continue down the path of this adjustment and Anthony clearly explained what that means in his 2023 predictions.
Adjustments can be tricky for a while until the balance comes and this next year may have a few rocky roads. Sellers will continue to hesitate to list even though they want to because most sellers become buyers and they know they’ll have to contend with high prices and rates that are higher than the historic lows that spoiled us all. The fact is that rates will likely never drop back down to the 2’s or 3% range, and that isn’t the end of the world! Furthermore, there are buying options such as mortgage assumptions or Buydowns or where the first few year’s payments reflect a lower rate to help ease into an eventual higher rate.
Buyers may hesitate to make offers due to sticker shock of the prices and the rates and if those buyers need to sell in order to buy like most people, that hesitation is what is creating the lull in activity we are seeing right now. Prices aren’t climbing at the rate they have been and may level out by the rest of the year, homes are on the market a little longer and buyers are starting to have some leverage with sellers, so now is a great time to get in the market before the spring rush. Get in and get out before the competition heats up and multiple offers become prevalent again.
The benefits of homeownership shouldn’t be ignored. The fixed payment of a mortgage, knowing you’re paying your own mortgage instead of the landlord’s, the tax benefits, seeing your equity rise as time goes on, and the ability to control your domain are all key benefits among many. Life happens and the need to move based on job relocation, family size, retirement, and other events will arise regardless of rate so being prepared with an expert REALTOR is the best way to get started off on the right foot.
*Data provided by NEREN