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‘Crushing disappointment’: New Hampshire home prices push out young people

‘Crushing disappointment’: New Hampshire home prices push out young people

Brandon Zalinsky and his girlfriend Briana made 25 offers on homes before finally landing this one in Pembroke. Courtesy Brandon Zalinsky

By Katy Savage

December 14, 2023

At 23 years old, Brandon Zalinsky had just graduated from Clemson University in South Carolina with an engineering degree.  

It was late 2019 and he had just returned to his home state of New Hampshire with a new job with his girlfriend (also an engineer). They were renting an apartment in Manchester and were ready to take the next step—buy their first house.  

Zalinsky, who grew up in Londonderry, and his girlfriend started looking for homes in the $250,000 range in the Manchester area. But the houses for that price were few and far between. Then, everything got worse. 

Once the pandemic hit in March 2020, house prices surged, pushing young homebuyers out of the market.

“The issue is that for somebody who is looking for our first house, in the 200 to $350,000 range, that price point is just completely vacant,” Zalinsky said. 

Zalinsky made 25 offers on homes over three years, only to be rejected again and again. The only one not ultimately fell through. 

“It was definitely not a fun experience,” he said. “It wasn’t for lack of trying. We were putting in competitive offers on these houses. There was my worry that I’d stop and then we’d miss something.”

Though Zalinsky and his girlfriend had stable jobs, they were competing with buyers making cash offers and waiving inspections. 

“It’s crushing disappointment over and over again, as houses that you really want, somebody else buys for $100,000 more than you can afford,” he said. 

After three years, at 26 years old, Zalinsky finally got lucky. He and his girlfriend bought a 1,400 square-foot, two-bedroom, two-bathroom house in Pembroke for around $320,000.

He believes he only got the house, which he purchased out of an estate sale, because he waived inspections—something he was initially hesitant to do as a first-time homebuyer. 

“The fact of the matter is, it all comes down to really one thing—that the inventory is historically low. There’s nothing for sale and that is where all of the problems kind of circle back to,” he said. 

Zalinksy’s struggle isn’t unique.

The Current State of New Hampshire’s Housing Market

In November, there were about 1,400 single family homes for sale in New Hampshire, according to the New Hampshire Association of Realtors. 

“Comparatively, in 2014, there were 10,000 units for sale,” said Joanie McIntire, Zalinksky’s aunt and a real estate agent with Coldwell Banker J. Hampe Associates. “That’s a sad thing when those first-time buyers are looking at not being able to live where they grew up.” 

The lack of inventory doesn’t seem to be getting better. 

The New Hampshire Coalition to End Homelessness‘ annual report, released in December, showed the annual income needed to afford the average two-bedroom apartment in the state is $63,400, which is 131% higher than the median renter household income. The report also found New Hampshire’s statewide housing vacancy rate for 2022 was 0.5%, which is a tenth the optimal vacancy rate. Meanwhile, the average home price in November was $450,000 in the state, up 3.4% from November 2022, and beyond what most people can afford. 

The lack of inventory has caused a ripple effect, making the state unaffordable to some workers.

“If I go out to my favorite restaurant, and there’s not enough waitstaff for me to get a table, that’s one thing,” McIntire said. “But if I try to go to the hospital and I’m in the emergency room and I sit for eight hours because there’s nobody to sweep the floors, or make the beds, or take my blood, that’s another story. We need people to be able to live here, so they can work here.” 

Local Real Estate Market Follows National Trends

Nationwide, the inventory of homes for sale was historically low, with only 1.15 million homes available in November, a 5.7% decrease compared to the same period last year.

“You’re not seeing as many offers substantially over asking price because we’re really pushing maximum density for affordability,” said Greg McCarthy, an associate broker for Keller Williams McCarthy Group in Bedford. “I couldn’t live in my house today if I had to buy it. I just couldn’t do it. My mortgage would be twice as much as it is.”  

Nearly a third of all homes that sold nationally were all cash, while the average 30-year fixed mortgage interest rate was about 7.8%. Mortgage rates fell to an average 6.8% in December for the first time since mid-August, according to data from Freddie Mac. Some experts predict mortgage rates may decrease in early 2024. 

“We’ve got to get rates back down to a place somewhere between 5 and 6%, where it makes it worthwhile for people to make the move,” McCarthy said.

But he said lower interest rates could drive home prices up even further. 

“At the end of the day, all people care about is, ‘is my rate locked and what is my monthly mortgage payment?’”  

Rethinking the Path to Homeownership 

Mary Strathern, an associate broker for Berkshire Hathaway HomeServices Verani Realty in Exeter, said parents have gotten creative. Some are helping their 20- and 30-year-old children purchase homes in New Hampshire as an early inheritance.

“Parents are gifting money for the downpayment because otherwise the young people are really having a hard time getting into property here because it’s competitive,” she said. “A lot of times, they don’t have that downpayment to be able to move forward because they still have school loans or car payments.”

Other homebuyers who have to move are taking out mortgages now, hoping rates will drop and they’ll be able to refinance.

While Strathern is predicting the next quarter will be similar, McIntire is hopeful the New Hampshire appetite for affordable housing will increase. 

“It feels like the people of New Hampshire are hearing this, that we do need more housing that we’re starting to hear people say, ‘yes in my backyard’ rather than ‘not in my backyard,’” she said. “I’m hopeful that things will turn around a little bit and we’ll make homes for people who are teachers, who are our policemen, or firemen.”

 

Author

  • Katy Savage

    Katy Savage is an award-winning reporter with more than 10 years of experience working in daily, weekly and digital news organizations as both an editor and reporter. Katy is a New England native and has a passion for telling stories about where she grew up.

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