New Hampshire Real Estate Market Trends & Analysis


New Hampshire’s economy has improved dramatically in a relatively short period of time.  For the better part of a decade, the entire state has seen encouraging growth in both its labor force and available jobs.  Few states, for that matter, have a better unemployment rate than New Hampshire. Improvements in the local economy have translated into a healthier housing industry, too.  Pending sales have increased year-over-year and homes are selling faster. It is worth noting, however, that wages haven’t been able to maintain the same pace as appreciation rates within the New Hampshire real estate market

After nearly seven consecutive years of appreciation, real estate in New Hampshire has become less and less affordable.  Rents, in particular, have increased dramatically in as little as five year’s time, and vacancies are almost nonexistent.  As a result, a great deal of people are left with no other option than to buy, which places sellers and investors in a great position.

The Top New Hampshire Real Estate Markets


While the best real estate market in New Hampshire is up for debate, here’s a list of the cities investors may want to pay special considerations to:

New Hampshire Real Estate Fees & Regulations

Real Estate

Closing Conducted by: Attorneys
Conveyance: Warranty or Quitclaim Deed

Foreclosure Procedure

Primary Foreclosure Method: Non-Judicial
Process Period: 2 - 3 Months
Notice of Sale: Trustee
Redemption Period: None

Taxes

Income Tax: 5.00%
Corporate Tax: 8.50%
Sales Tax: None
Estate Tax: No
Inheritance Tax: No
Median Property Tax: 1.86%
Property Taxes by County: http://www.tax-rates.org/new_hampshire/property-tax#Counties

Average Transactional Costs

Closing Cost: $2,641.00
Transfer Fee: 1.50%
Origination Fee: $1,975.00

Overview


  • Median Home Value: $291,293

  • 1-Year Appreciation Rate: +3.9%

  • Median Home Value (1-Year Forecast): +2.9%

  • Median Rent Price: $1,700

  • Price-To-Rent Ratio: 14.27

  • Average Days On Market: 72

  • Unemployment Rate: 2.6% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 1,356,458 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $74,057 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 15.46%

  • Foreclosure Rate: 1 in every 3,736 (2.6%)

Median Home Prices In New Hampshire


The median home value in New Hampshire is $291,293, which serves as a testament to the strength of the state’s housing sector. If for nothing else, real estate in New Hampshire has come a very long way in a relatively short period of time. No more than eight years ago, in fact, New Hampshire home prices bottomed out in the first quarter of 2012. At the time, New Hampshire’s median home value was around $207,000, which marked one of the state’s lowest points of the recession. Shortly after the first quarter of 2012, however, real estate in New Hampshire started appreciating, and the state hasn’t looked back since.

Thanks, in large part, to a strengthening economy, improving optimism, and a distinct lack of available inventory, home prices in New Hampshire started to move in a positive direction. Over the course of a few years, nearly all of the equity that had been lost as a result of The Great Recession was returned, and then some. For eight consecutive years, however, prices appreciated at a historical rate, to the tune of 40.7%.

To put things into perspective, the median home value in the United States was around $160,000 when the recession was at its lowest point (February 2012). Since then, the median home value in the United States appreciated 52.5% to get to where it is today: $244,054.

Appreciation rates in New Hampshire trailed the national average for the better part of a decade. That said, slightly more modest gains aren’t necessarily an indictment on the state of New Hampshire, but are rather more indicative of a slightly more expensive market. Home values in The Granite State were simply higher than that of the national average, which left slightly less room for price growth.

Despite exhibiting different appreciation rates over the last eight years, it appears as if the market is leveling off. In the last year (from December 2018 to January 2020), the median home value in New Hampshire managed to slightly outpace the national average—3.9% and 3.7%, respectively. Moving forward, the differences are expected to become even less pronounced. The experts at Zillow are forecasting a 2.9% increase across New Hampshire and a 2.8% increase across the country.

Median Rent Prices In New Hampshire


Rental prices across the country are influenced by home values, and are—therefore—subject to market fluctuations of varying degrees. It is worth noting, however, that there is a direct correlation between increases in home values and subsequent jumps in rental prices—and vice-versa. When home prices increase, for example, it’s safe to assume more prospective buyers will be priced out of the market, ultimately relegating them to renters. Consequently, the more people who are forced to rent, the more landlords will be able to charge in rent. The resulting rental demand from increased home prices will simultaneously drive up competition and prices. Markets in the midst of historical appreciation rates have also seen their rental prices increase, and New Hampshire is no exception.

Just as home prices in New Hampshire have increased 52.5% for the better part of a decade, local rental rates have responded in similar fashion. While not quite as bullish as home prices, rental rates in the state of New Hampshire have increased 13.3% over the same time (February 2012 to January 2020). For a better perspective, the median rent price in the United States increased at nearly twice the rate of New Hampshire. Over the last eight years, the median rent price across the whole country increased 26.0%, and is now $1,650.

Following the prolonged rental rate increase, it’s typically more affordable to buy a home in New Hampshire than to rent one. With a price-to-rent ratio of 14.27, however, the scale is starting to tip in the other direction. While buying should remain more affordable for the foreseeable future, it’s only a matter of time until the pendulum swings in the other direction.

For now, however, it’s relatively expensive to rent in New Hampshire. While tenants may not like the sound of higher rental rates, the New Hampshire real estate investing community is more than pleased with the way things are going. Cash flowing rental properties in the state of New Hampshire are one of the most preferred investment vehicles in today’s high-priced market. If for nothing else, years of attractive cash flow are able to offset historically high acquisition costs.

New Hampshire Foreclosure Trends & Statistics


The New Hampshire real estate market has a relatively low foreclosure rate. According to RealtyTrac, in fact, only one in every 3,736 homes in New Hampshire is considered to be distressed (default, auction or bank owned). At that ratio, the state currently boasts a foreclosure rate of 2.6%, which is below the national average. One in every 2,253 homes in the United States is considered distressed, or a total of 4.4% of the housing inventory. That said, New Hampshire’s foreclosure rate is nearly half that of the national market.

While the New Hampshire housing market has a relatively low foreclosure rate, it’s important to note that foreclosure filings have increased in the last year. Much like the rest of the country, the New Hampshire real estate market has seen foreclosure filings increase year-over-year. As recently as December, “the number of properties that received a foreclosure filing in NH was 6% lower than the previous month and 5% higher than the same time last year,” according to RealtyTrac. The national average, on the other hand, increased 7.0% over the course of last year.

While the New Hampshire housing market may have a lower-than-average foreclosure rate, there are still pockets of distressed inventory spread across the state. That’s not to say the following counties have high foreclosure rates themselves, only that they have high foreclosure rates compared to the rest of New Hampshire:

  • Cheshire: (1 in every 1,961)

  • Sullivan: (1 in every 2,051)

  • Rockingham: (1 in every 3,255)

  • Hillsborough: (1 in every 3,386)

  • Strafford: (1 in every 3,541)


Tax Lien Investing


  • Tax Lien or Deed:Tax Deed state

  • Interest Rate: Property owner must pay the state 18% to redeem lien or risk loosing property to foreclosure

  • Redemption Period: Total of 5 years

Real Estate Investing In New Hampshire


Real estate investors and homeowners across the country have enjoyed several years of seller gains and attractive ROI (return on investment). According to Attom Data Solutions’ most recent Home Sales Report, in fact, the average home seller in 2019 “realized a home price gain of $65,500 on the typical sale, up from $58,100 last year and up from $50,027 two years ago.” Profits were calculated using median purchase and resale prices, and currently represent a 13-year high.

The report went on to say that profits “represented a 34 percent return on investment compared to the original purchase price, up from 31.4 percent last year and up from 27.4 percent in 2017, to the highest average home-seller ROI since 2006.” Simply put, average U.S. home seller profits are higher than they have been in a really long time, and New Hampshire is no exception. Following years of historic appreciation, homes are selling for more in New Hampshire than they have in years past, which bodes well for local investors.

While home values are reaching new highs with each passing month, the New Hampshire real estate investing community is more than aware that attractive price margins can just as easily be found at the time of acquisition. The cost of acquiring a home plays just as much of a role in calculating one’s return on investment as the sales price. As a result, real estate investors in New Hampshire have made a habit out of dealing in the state’s distressed property market. Distressed properties award savvy investors the opportunity to simultaneously capitalize on attractive profit margins and motivated sellers.

Real estate investors in New Hampshire looking for their next deal should turn to one source before any other: local auctions. According to RealtyTrac, auction homes make up the majority of the state’s distressed inventory. Constituting 56.5% of New Hampshire’s distressed inventory, auction homes are the most abundant source of foreclosures, and the most likely place investors will find deals with the profit margins they desire. Therefore, investors who want to give themselves the best odds of finding a viable deal should look no further than auctions.

Once the deals are acquired, real estate investors in New Hampshire have the luxury of exercising one of any number of exit strategies. Today’s three most popular exit strategies, in fact, are in play: rehabbing, wholesaling and renting. There’s no reason investors couldn’t consider implementing any one of these strategies. However, thanks—in large part—to today’s high acquisition costs, investing in New Hampshire in 2020 may better be suited to those who wish to build a passive income portfolio. Years of cash flow could easily help offset today’s higher purchase prices.

New Hampshire Housing Market Predictions


The New Hampshire housing market has had a great run, much like the rest of the country. For the better part of a decade, in fact, real estate in New Hampshire has exhibited many of the same characteristics as its national counterpart. Price increases, confidence in the market and several other indicators are in line with national trends, but what does that mean moving forward? What can the New Hampshire real estate investing community expect moving forward?

  • Rochester may receive added attention: As one of the largest cities in the New Hampshire real estate market, Rochester already has a fair amount of demand. However, as the cheaper alternative to large cities like Dover, Nashua and the state’s capital (Concord), Rochester could easily see an influx of buyers in search of lower home prices. Priced nearly $65,000 less the median home value in New Hampshire, the median home value in Rochester is a welcome sight to budget-conscious buyers. As a result, it’s reasonable to assume more buyers will turn to Rochester in the coming year.

  • Inventory will drive appreciation: Prices in the New Hampshire real estate market have increased for eight consecutive years. While the driving force behind the latest bought of appreciation may be attributed to several factors, a distinct lack of inventory is perhaps the most prominent reason prices have risen so much. The lack of available housing has stirred up competition; so much so, in fact, that prices have risen to new highs. Not only that, but the lack of available inventory will continue to increase prices for the foreseeable future.

  • Optimism will support an active market: Despite the state’s lack of available housing and historically high prices, the local real estate market has seen optimism flourish. Thanks to a strengthening economy, New Hampshire now has more people who are ready and willing to participate in the market, and it’s their presence that will serve as a positive catalyst moving forward.

New Hampshire Real Estate Market Summary


In the wake of a vastly improved economy and growing optimism, the New Hampshire real estate market has flourished. To that end, nearly every economic indicator is better off today than in years past. Perhaps even more importantly, however, is the momentum the state appears to be carrying over into the new decade. Things are moving in a positive direction, and should continue to do so for the time being. As a result, buyers, sellers, and real estate investors in New Hampshire can take solace in the fact that their state boasts a promising future.

Sources:



https://www.census.gov/quickfacts/fact/table/NH/PST045218
https://www.bls.gov/regions/new-england/new_hampshire.htm#eag
https://www.realtytrac.com/statsandtrends/foreclosuretrends/nh/
https://www.realtytrac.com/statsandtrends/nh/
https://www.realtytrac.com/statsandtrends/
https://www.zillow.com/nh/home-values/
https://www.zillow.com/home-values/
https://www.zillow.com/rochester-nh/home-values/
http://www.nhar.org/assets/pdf/marketdata/NHAR_MMI_2019-08.pdf
https://www.attomdata.com/news/market-trends/home-sales-prices/attom-data-solutions-year-end-2019-u-s-home-sales-report/

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