Home-buying frenzy easing, but more housing needed
Nov. 7—Summer’s home-buying frenzy is showing signs of easing, but long-term solutions to the housing crunch will need to bank on looser zoning and density restrictions, experts say.
Exeter is considering allowing multi-family housing in commercial areas to produce “de facto workforce housing,” said Exeter’s economic director, Darren Winham, at a housing summit last week.
“You can’t build any larger units than this (square footage) and that will keep the cost down,” Winham said Friday.
Another idea Exeter is exploring is business owners guaranteeing rent for a certain number of units in affordable housing projects, so “businesses can use that to recruit employees,” Winham said.
Although New Hampshire had 37% fewer homes on the market in October than a year ago, the median sales price of $380,000 dropped for a second straight month and was down $30,000 from its record August milestone, according to preliminary numbers from the New Hampshire Association of Realtors.
Realtor Rachel Eames said prices are “plateauing” with fewer bidders on a given property.
“Still multiple offers, but not not multiples of multiples,” said Eames, owner/broker at Eames Realty Services, based in Concord.
The Seacoast area also saw a market downshift in October.
“Record inventory shortages of both single-family and condominium units helped cool October real estate sales” in 13 Seacoast communities, including Portsmouth, according to John Rice, chief statistician for the Seacoast Board of Realtors.
October sales for single-family homes were off 14.5% from October 2020, with the monthly median price dropping to $532,000, the lowest since May 2020, Rice said.
“The playing field seems to be leveling a little bit when it comes to prices, but the trick is finding something for sale,” Rice said.
Housing developer John Randolph said he put on a one-bedroom apartment in Newmarket on the market for $850 a month a while back.
“I got over 100 applications with people making over $100,000 asking for the place,” he said during the summit. “I was blown away.”
Housing is directly affecting the availability of workers.
Employers say, “We can’t find workers. We can’t recruit workers and oftentimes we can’t keep workers,” Winham said.
“While there are other mitigating factors, the lack of affordable housing for our region’s workforce is the No. 1 driver for our workforce woes,” Winham said. “So make no mistake, lack of affordable housing, particularly on the Seacoast, is at a crisis point.”
Bedford real estate agent Greg Powers said people shouldn’t focus on the median price, because a three-bedroom Cape Cod on the market listed somewhere for $300,000 hasn’t dropped by $30,000 in recent months.
“The median price means nothing” to bidders, Powers said in an interview. “They still have to compete and go over list price to get what they want.”
Randolph and his wife, Maggie, developed housing for several workers in Durham and plan to do the same in Dover with a community of 44 small cottages.
Maggie Randolph praised Dover officials for working with the couple on density and zoning issues.
John Randolph said he encountered a delay in receiving an alteration-of-terrain permit after Fish and Game started investigating whether the New England cottontail rabbit, once feared close to extinction, liked traveling through the eight-acre site planned for the cottages.
He said each month of delay costs him between $12,000 and $15,000 in additional costs.
“If you’re going to have roadblocks like this, it really just doesn’t make sense” for builders financially to wait out delays, he said, adding later he didn’t know how much of a delay the rabbit issue caused.
After the summit, Randolph said he heard from Fish and Game, who asked him to block off a portion of the property where he did not plan to build. Randolph praised a Fish and Game employee who searched on the ground for signs of rabbits on the cottage property and probably walked away with 10 to 15 ticks.
Randolph said he hopes to break ground as soon as next week, once he gets the last approval. Waiting until spring could be a “crushing blow to the project,” he said.
Tax-credit help
Finding people a place to live is important to the state’s economy.
“Sustained economic growth in the future depends on businesses being able to recruit and retain talent, and an inaccessible or unaffordable housing market will unquestionably hurt the ability of a business, across different industry sectors and sizes, to do just that,” said Mike Skelton, president and CEO of the Greater Manchester Chamber.
In Goffstown, Dakota Partners is clearing a site to build 74 townhouse units with 61 tied to income restrictions.
The project received federal low-income tax credits from the New Hampshire Housing Finance Authority, which will help the group pay for construction to build the project, according to the authority’s Rob Dapice.
“They are just limited in how much rent they can charge, and they are required to rent to low- and middle-income tenants,” Dapice said by email.
“As a result, they can’t carry as much debt as a market-rate development, which means they wouldn’t have enough money to build the project without some kind of subsidy or other intervention.”
Jeremy Vieira, development director at Dakota Partners, said he hopes the first tenants can move into the units in late 2022.
“You can almost never have too much affordable housing, especially around the Boston corridor,” he said.
Solutions to building more affordable housing include more funding, such as through the housing finance authority, he said.
Making the permitting process more predictable also would help a lot.
“Trying to devise a standardized permitting process and regulatory process for this would be hugely helpful,” said Vieira, whose company has other housing projects in Bedford, Hudson and Milford.
Wait ’til next year
Some potential buyers have had enough searching for this year.
“They decided to wait until spring until the market calmed down,” said Powers, a Realtor with Keller Williams Realty Metropolitan in Bedford.
“I’ve had some buyers drop out of the market just because they got burned out,” Powers said.
But procrastinators may not see the savings they hoped for.
“If interest rates go up, then your monthly payment is going to be about the same,” he said.
What’s Working, a series exploring solutions for New Hampshire’s workforce needs, is sponsored by the New Hampshire Solutions Journalism Lab at the Nackey S. Loeb School of Communications and is funded by Eversource, the New Hampshire Charitable Foundation, Dartmouth-Hitchcock Medical Center, the New Hampshire College & University Council, Northeast Delta Dental and the New Hampshire Coalition for Business and Education.
Contact reporter Michael Cousineau at [email protected]. To read stories in the series, visit unionleader.com/whatsworking.
