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To Buy or Not to Buy; A Southern NH Broker’s Opinion on the Current Market Part I & II

Tim Caloggero

May 25, 2021

In a mental tug o'war with yourself, you’re considering moving. With labeling our small corner of the world the hottest market in the country, you think that settles it. Further research presents an opinion that this is a bubble and that with patience it will burst and buyers will have the upper hand again. So which is it? Do you ride out the storm or join the fray?

I am firmly of the opinion that this is not a bubble, but there will likely be a small adjustment soon. The whole country has an elevated market, but what is unique to Southern NH is that single family new construction has been outpaced by population growth for far too long and that has finally caught up with us. It is a simple supply and demand issue.

The situation has been exasperated by the pandemic though. There has been an increase in MA to NH migration, virus conscious people are reluctant to list, and historically low mortgage rates. As covid restrictions continue to be lifted and mortgage rates rise, there should be some small corrections from either end of the market scale, but not enough to be considered a bubble burst.

The conclusion: This market is here to stay until the underlying situation is corrected. The market has only had a significant decline once in the last 40 years, which has since been more than overcome. Hard statistics led us here and are not going away, but waiting for some fluid situations to change before entering the market is left to the individuals.

If part I was a macro look at the Southern NH buyer’s market, part II is a micro look at how the market affects different types of buyers, specifically current homeowners and current renters/first time buyers.

For current homeowners, the best news is that you can benefit from the best seller’s market in history before you buy your new home. Even if you just purchased a few years ago and put in only minor upgrades, there are very strong signs that you will walk away with a significant amount of profit. If you use that profit towards the purchase of another property or a strong performing asset, you can minimize the hardest pill to swallow about this market; the price.

Using that newfound small fortune as the down payment on your next purchase is a great way to strengthen your offer. On the other hand, trying to put in offers before your current home is sold and making that offer contingent on your sale could severely hamper your offer. Terms can be nearly as influential to sway a seller as the dollar amount because they affect the likelihood of the deal happening on time, for the stated price, or even at all.

For the first time buyers, you will only be seeing one side of the market, so there won’t be the luxury of home sale proceeds, but you can minimize the required contingencies on your offer. Just make sure that, if you are a renter, that you give your landlord appropriate notice and review the terms of your rental agreement. Many landlords will incentivise their exiting tenants for making the process as easy as possible for them.

An offer pitfall unique to first time buyers is the type of financing. The Federal Housing Authority (FHA) first time buyer loans are a common option, but require additional inspection requirements for the property that could create headaches for the seller. Options for conventional first time buyer loans offer similar terms to assist buyers, but without causing any additional problems for the seller. A conventional option may require a higher credit score though.

These strategies are only scratching the surface of tips and strategies we use to help buyers are Merrimack Valley Realty, LLC. If you’d like to talk more about these methods, you can reach us at 603-489-6111 or use the “how can we help?” button on the home page of our website.