When Joshua Greenwald, a broker associate and sales manager at Greenwald Realty Associates, listed a Keene house on the market Sept. 12, he had 10 showings for the property the same day. He had six showings the following day.
Greenwald said the property received six offers from interested buyers as of that evening, including three above the initial asking price.
New Hampshire real estate experts say an historically low number of available homes, combined with increasing demand in recent months, has created what Greenwald called a “feeding frenzy” among potential buyers.
“There’s just not enough supply to satisfy the demand,” Greenwald said.
Data collected by the N.H. Association of Realtors, a Concord nonprofit group that advises and advocates for real estate professionals, suggests the COVID-19 pandemic may be sharpening that dynamic.
There were 2,012 single-family residences sold across the state in July, according to NHAR. Those transactions represented a 6.4 percent increase from the number of closed sales in July 2019, the data show — the first such positive trend after five consecutive months of decline, compared to the same months last year.
NHAR Communications Director Dave Cummings said “uncertainty” among would-be buyers following the COVID-19 outbreak this spring contributed to the slowdown. He added, however, that the declining volume of sales was also influenced by factors that predate the pandemic.
“There was a little bit of paralysis [among potential buyers] for a couple months, but it wasn’t dramatic enough to impact the direction of the leverage, [which] belonged to the sellers,” he said.
Cummings attributed the favorable selling conditions to a significant reduction in the number of homes available for purchase, a pattern he said emerged before this spring. Indeed, 2,383 single-family homes were for sale last month — a 57.9 decline from August 2019 — according to NHAR.
That figure has declined for four straight months, even though the number of homes for sale each year has typically peaked in the late summer, the data show. It has also continued to fall even as Cummings said the recent volume of sales suggests demand for single-family homes is rebounding, particularly among urbanites.
“You have workers in and around the cities that are starting to realize they’re not necessarily tethered to their desks … and they don’t necessarily want to be in the city,” he said. “The whole market is definitely being shaped, in some way, by these outside buyers.”
Cummings explained that historically low supply and increasing demand have created a seller’s market that is “as dramatic as I’ve seen.”
In Cheshire County, where NHAR data show single-family home sales dipped from 116 in August 2019 to 104 last month, several indicators suggest the real estate market heavily favors sellers.
Among closed sales in August, the median sales price, $273,500, increased 28.1 percent from the same month last year. In addition, those homes were on the market for an average of two weeks less than they were in August 2019.
Greenwald said the novel coronavirus has exacerbated the favorable conditions for sellers in the Monadnock Region after causing a “temporary hibernation” of the real estate market in February and March.
He explained that would-be sellers have appeared hesitant to disrupt their lives with a housing change, despite the possibility of windfall revenue. At the same time, he said, an influx of buyers eager to settle down has increased competition for available homes.
“We have plenty of things to worry about, as it is, so the last thing they want to be thinking about is where they are going to live,” Greenwald said. “When they see something that they want, they are being decisive.”
Gov. Chris Sununu’s emergency order temporarily prohibiting real estate open houses expired this summer, although Greenwald said participants must still wear masks and adhere to social distancing guidelines. He noted, however, that he has not conducted any open houses since then because his properties are already drawing enough interest.
Much of that demand is being driven by people interested in leaving cities for the Monadnock Region, where the pandemic has not caused as much upheaval, he said.
Greenwald said it is difficult to predict whether the lack of available single-family homes, which he and Cummings believe is largely responsible for the seller’s market, will endure. He added that it partially depends on COVID-related factors.
“There’s a big question mark looming over this entire thing because we have no end date [for the pandemic],” he said.
Despite similarly high activity among potential buyers, Greenwald said the current real estate market differs from the one that preceded the Great Recession.
The housing bubble built in those years was a product of speculation that property values would continue to rise, leading people to purchase them with loans, he said. But competition for relatively few available properties is driving the hot market today, he said, with some buyers paying fully in cash to increase the attractiveness of their offer.
Greenwald said the real estate market may return to an equilibrium in the winter, when demand typically wanes. In the meantime, he worries that would-be buyers may become discouraged by the robust competition for available properties and abandon their search.
Returning to that equilibrium may simply require more homes on the market, according to Cummings.
“The big question is when does the comfort of sellers begin to come back to the point that inventory keeps up with demand,” he said. “We don’t have the answer to that question.”