Houses are selling the same week they’re listed. Buyers are offering $10,000 above the asking price – and still losing out.
It’s a seller’s market in New Hampshire as home-buying season heats up, local real estate agents said.
A historically small inventory of homes for sale in the state means that houses, listed at the right price, are being snapped up quickly as sellers sift through multiple offers, brokers said. Housing data reinforce that the improving economy has occasioned demand from buyers.
The supply side of the equation, on the other hand, has lagged behind. New construction starts are at a level one-fifth of what’s needed, said Rachel Eames, the president of the New Hampshire Association of Realtors, in part because easily developable lots and contractors are hard to come by.
The result has been a drastically declining stock of homes on the market in New Hampshire in recent years. At the end of March 2012, there were 12,807 single-family houses for sale statewide, according to data kept by the New Hampshire Association of Realtors.
By the end of last month, that figure had shrunk by nearly 62 percent. The change from 2016 to 2017 alone was a decrease of 32 percent, from 7,226 to 4,902 homes.
What does that mean for buyers?
“There’s some bidding wars taking place,” said Stephen Marder, a Concord-area real estate agent for The Masiello Group. “If the house is priced correctly for the market … you’ll end up with multiple offers for the same property. This is completely different than three years ago.”
Eames, who is also the owner and broker of the Concord-based agency Eames Realty Services, said the “inventory crunch” is a continuing trend in New Hampshire over recent years.
“That’s going to be the name of the game again this year,” she said. “Inventory.”
Young people who were once resigned to living with their families during the recession are ready to stake out on their own, she said, and when that happens, their parents may want to make a move themselves to downsize.
But the type of houses they’re looking for might not be easy to find on the market. Eames said modern buyers are educated and somewhat more picky, looking for houses with smaller footprints and Earth-friendly characteristics.
“We haven’t really built enough of those in New Hampshire yet,” she said.
For developers who would seek to meet that demand, the available land in desirable areas isn’t as easy to work with as it once was, Eames added. The “slice and dice” parcels with hundreds of feet of road frontage that can be divvied up into a number of lots “are not gone, but by and large, a lot of the easier ones have been developed,” she said.
That means builders have more engineering to do and roads to build if they’re left developing cul-de-sacs, which can come with their own set of potential snags at municipal land-use boards.
What’s more is that contractors can be difficult to find, even if a developer clears all the other hurdles in his or her way, Eames said.
“We lost a lot of contractors back in the recession days. They either moved out of state where they could continue building or they literally went into another vocation or they have just retired,” she said. “You try to get one, and they’re very busy.”
To compete for the homes that are available, buyers in some cases have been willing to act quickly and pay thousands of dollars more than the asking price, especially if they’ve already lost out on their first dream home.
Aaron Phinney, a real estate agent working in the Concord area for the agency Keller Williams, said he put five properties on the market in the past week and two are under contract. One listing in Concord had multiple full-price offers, he said.
“Obviously that gives the sellers a ton of leverage because they’re put in the power position,” he said.
The meaning of a full-price offer has also become more favorable for sellers in recent years. The median sales price statewide through March for a single-family home, compared with the same figure five years ago, was nearly 30 percent higher, according to New Hampshire Association of Realtors data.
In Merrimack County, the market is even stronger than the state average. While year-over-year closed sales and pending sales stayed relatively flat in March statewide, the numbers for Merrimack County were up 4 percent and 21 percent, respectively. The median sales price and time on market were also favorable in the county as compared with the state.
Phinney recalled another case recently in which he said his clients placed an offer $10,000 more than the asking price on a house in Bow.
“My buyers’ over-asking offer didn’t get accepted, which I thought was pretty wild,” he said.
Phinney said it’s situations like this that have caused him to get creative on behalf of his buyers.
“I’ve been having all my buyers write a personal letter and attaching a picture to the letter. That kind of humanizes our offer,” he said. “They’re not just buyers who are trying to take advantage of the sellers, they’re a younger couple trying to grow a family.” He added: “That can make the difference.”