The No. 1 reason people move to or stay in New Hampshire is not jobs or low taxes or the environment. It’s family, according to University of New Hampshire Granite State Poll results summarized in the New Hampshire Housing Finance Authority’s October Housing Market Report.
New Hampshire’s strong economy gives our extended family members plenty of options for employment should they decide to stay or return home. Maintaining a vibrant economy is a way of keeping our families connected and close. But the other essential part of this equation is missing — where are they going to live?
The coronavirus pandemic has made New Hampshire’s acute housing shortage even worse, data from the New Hampshire Housing Finance Authority (NHFA) show.
Multiple news organizations have documented the run on houses in New Hampshire, Vermont and Maine as people flee cities for the safety of rural and suburban spaces with low infection rates. That surge in purchasers has spiked New Hampshire’s already high demand, driving prices to record levels.
New Hampshire’s median home price reached a new peak of $335,000 in August, a 14% increase since last August, NHFA tracking shows. Sales are down 6% since January. Those numbers “reflect extremely low inventory levels, not a lack of demand,” the NHFA concludes.
“September 2020 listings in total have dropped 27% when compared to September 2019. As prices continue to rise, listings under $300,000 become scarcer; the number of homes below this price have decreased 37% from last year,” the authority’s October report details.
In September, there was less than a month’s supply of homes priced under $300,000 in the entire state.
To put it another way, your child who wants to move home from Boston or Raleigh or Silicon Valley might have to keep that big-city salary just to afford a house in New Hampshire.
The housing shortage is tighter this fall even though building permits for single-family homes rose by 24% from January through August. New Hampshire’s housing stock is so low that it will be years before we come close to building enough homes to satisfy demand.
For rentals, the picture is even worse. Building permits for multi-family homes fell by 61% from January through August. As demand has surged, communities have clamped down on new apartment construction (or builders have given up even applying).
For example, Bedford’s planning board in September rejected a proposal to build 200 market-rate luxury apartments in the town’s commercial zone on South River Road. Though the apartments would have brought more tax revenue and less traffic than a commercial development previously approved for the same lot, and would have made the town a profit after school and public safety costs were deducted, the board rejected it. Board members didn’t want more apartments, even though the data showed that apartments would have left the town financially better off than commercial development.
Because local regulators continue to artificially restrict the supply of rental housing, rents keep rising. The median monthly rent for a two-bedroom apartment in New Hampshire rose 4.9% in the past year, to $1,413, NHFA data show. The state’s rental vacancy rate has risen a bit but remains below 2%.
All of this means that if your children and parents want to move back to town, they will struggle to find a home.
The NHFA’s report shows that almost three-fourths (73%) of New Hampshire home buyers are Granite Staters moving to another home within the state. High prices inflated by a severe shortage of new construction do not primarily hurt out-of-staters who want to move here for jobs. They primarily hurt Granite Staters.
They also hurt New Hampshire employers. Fidelity and Sig Sauer this week announced expansions that would create more than 700 new jobs in the state. The shortage of housing in Southern New Hampshire will make it harder for those companies to fill those positions.
New Hampshire’s families, workers and employers are in desperate need of new home construction, both owner-occupied and rentals. The situation has been worsening for years. At what point do all three go to their local boards and demand that they get out of the way and let builders build?