New Hampshire home sales declined in 2018, but market healthy
The number of home sales in New Hampshire in 2018 hit a three-year low, echoing a nationwide slump, but local Realtors are confident the housing market remains healthy.
There were 17,525 sales of single-family homes last year, a 1.5% drop compared to 2017, according to the New Hampshire Association of Realtors. But the median sale price of $282,500 was the highest the association has recorded in the last 20 years and the average number of days on the market for a house, 61, was the lowest.
"It's still the third-highest number we've ever had in terms of home sales," said Dave Cummings, director of communications for NHAR. "There haven't been a whole lot of years when we've had more than 16,000 sales ... the last four years we've had more than 16,000. Big-picture scenario, it speaks still to a fairly vibrant market by objective standards."
Nationwide, contract closings decreased 6.4 percent from the prior month to an annual rate of 4.99 million in December, the National Association of Realtors said Tuesday. The median sales price rose 2.9 percent from a year earlier, the least since February 2012, to $253,600, while inventory increased.
The latest results brought the 2018 tally to 5.34 million, the weakest pace since 2015.
Declines in both single-family and condominium sales indicate the residential real estate industry was struggling to gain traction as elevated property values and a lack of affordable listings discouraged buyers, though more inventory has become available compared with past years.
While home-price growth is cooling, it's been outpacing gains in worker pay for several years. That's kept buying out of reach for many Americans, especially young people who are also saddled with student loans. Nonetheless, a tight labor market is underpinning demand.
The NAR report is likely to be more closely monitored than usual as the government shutdown has delayed the release of key official data on housing and residential construction.
Existing-home sales account for about 90% of U.S. housing and are calculated when a contract closes. New home sales make up the remainder of the market and are seen as timelier, because they're counted when contracts are signed. Those figures are currently being delayed, however, because of the shutdown.
Home purchases fell in all four regions, according to NAR, led by a 11.2% decline in the Midwest and a 6.8% drop in the Northeast.
Economists surveyed by Bloomberg had projected a 1.5% decline in sales to a 5.24 million pace.
New Hampshire's market reflected that prediction. Local lenders and Realtors said fears about rising interest rates may have tempered sales and inventory remains tight.
But they also described strong interest from younger buyers who might have been wary of purchasing a home after the financial crash in 2008.
"We've had one, two generations of people who haven't bought homes because they were afraid of what happened to their parents," said Rick Herrick, a Bedford loan originator. "We have a generation of people that are now realizing that home ownership is more affordable in the long run than renting."
Pat Clancey, a Nashua Realtor, said 2018 was her best year ever and that intelligently priced homes flew off the market.
Herrick said the slight drop in 2018 is more likely a correction from an unreasonably hot market than a sign of deeper issues for New Hampshire's residential real estate industry.
"The last three years have been incredibly hot real estate markets, like unhealthily hot real estate markets," he said. "If you had a home to sell you were selling the home sometimes in a matter of hours."