As we approach the end of 2021, the biggest real estate headline for the year is clearly the rapid rise of home prices. The rise that began in 2020 in the early months of the COVID-19 pandemic has continued through 2021, as people seek more space and a slower pace in smaller cities, suburban towns, and rural areas across Northern New England. The combination of high demand, tight inventory, and low-interest rates pushed prices higher not only in traditionally hot markets but also spurred a rapid rise in outlying communities that had traditionally been affordable enclaves for young families and new home buyers.
At Better Homes and Gardens Real Estate The Masiello Group, we saw an extremely competitive real estate market emerge in 2021. The inventory levels went from a six-month supply to a one-month supply over the course of the year. In addition, the number of homes that sold at or above asking prices spiked as well.
This climate went far beyond what we in the real estate business call a "seller's market"; home buyers from away were placing offers sight unseen, home sellers were struggling to find their next home within their budgets, and new home buyers were often sidelined with few affordable options available in their desired locations.
Despite the upheaval of 2021, there are signs that 2022 will offer more options for homebuyers in Northern New England. More homeowners are indicating they want to sell and are likely to do so earlier in the year. Projected interest rate increases and added inventory may stabilize prices in certain areas. It is yet to be seen how the pandemic will continue to affect the market and draw people from other regions who were considering relocation to Northern New England.
The Better Homes and Gardens The Masiello Group 2022 Real Estate Market Outlook for Northern New England seeks to put in context the factors at play and highlight market trends the Masiello team sees emerging for 2022.
Where the Market Stands in 2021
Throughout 2021, median home prices rose throughout Maine and New Hampshire, and these homes are selling quickly. In New Hampshire, days on the market steadily declined statewide, from 40 days in the first quarter of 2021 to just 19 in the third quarter. In Maine, homes were selling quickly as well, and fewer were available to buy. In October 2021, for example, Maine had a 1.8-month supply of homes, compared to a 4.5-month supply in pre-COVID 2019.
While sales were down slightly year-over-year at the end of 2021 compared to the previous year, early data from all of 2021 indicate that total sales for both Maine and New Hampshire will be higher than 2020.
This aligns with national trends, according to the National Association of Realtors. Homes listed between July 2020 and June 2021 typically sold within a week, which was a record low. These homes are also typically sold at or above the asking price. For those which sold above asking price, the median price was $85,000 more than the purchase price.
The hottest markets in New Hampshire continued to be in and around Manchester, NH, and along the New Hampshire Seacoast, with a statewide median single-family home price of $400,000 at the end of November, according to the New Hampshire Association of Realtors. In Maine, the hottest markets center around high-population centers of York County, Portland, Augusta, and Bangor, Maine, with a statewide median cost for a single-family home coming in at $308,000 in October. Agents reported that low inventory and increased demand expanded into suburban and rural areas in both states, from lakeside towns in New Hampshire to farming communities in Maine.
So, where are these buyers coming from? While there is always demand-driven by people moving within Northern New England, demand has increased as people from other parts of the country move to the region.
"People from the New York metro area and the West Coast are opting to relocate to here, where home prices are comparatively lower," said Chris Masiello, President, and CEO of the Masiello Group. "H...
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