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Cash was king in the purchase of at least 50 percent of residential real estate properties in the New Hampshire towns of Hancock and Lyndeborough during 2022.
And in several other Granite State communities, at least 40 percent of the real estate transactions were in cash, according to data compiled by Redfin and mapped by the Washington Post.
According to Redfin, the national real estate brokerage, 31.9 percent of all home purchases nationwide in 2022 were done with cash. An all-cash purchase is one in which there is no mortgage loan information on the deed.
“We’re still seeing cash offers to this day. We’re still seeing multiple offers on property to this day,” said Ben Cushing, a New London Realtor and president of the NH Association of Realtors.
In most of the cash transactions, the offers were above the asking price – a trend that helped push the median price of residential properties to record highs in 2022, according to Cushing. The other helping factor on the high prices was a lack of inventory, which still remains squeezed.
Cushing said a recent check showed there were some 975 houses for sale in the entirety of the state. With a more balanced market that number should be in the thousands, according to Cushing, who noted, “It’s still a seller’s market.”
Redfin said high mortgage rates are motivating affluent buyers to avoid loans and pay in cash.
The Washington Post analyzed the ZIP code-level data from Redfin and created an interactive map.
The map shows ZIP code 03449 – Hancock – had the highest percentage of purchases in New Hampshire in cash, 53 percent. Just behind was Lyndeborough (ZIP code 03082), at 50 percent cash transactions. Both towns are in southwestern New Hampshire.
In a number of New Hampshire ZIP codes, cash transactions ran between 40 percent and 50 percent of the total. They included: New Durham and Mont Vernon, 48 percent; New Ipswich, 43 percent; and Hampton and Seabrook 41 percent.
As for some of the larger New Hampshire communities, Nashua had the highest rate of all-cash real estate transactions, at 39 percent, Portsmouth was 36 percent, Manchester, 31 percent, and Dover, 28 percent. Bo data was offered for Concord.
According to both Redfin and the Post, the number of homes bought with cash is at levels not seen since 2014, when the housing market was on the rebound after the foreclosure crisis and the Great Recession.
“Today’s affluent homebuyers are motivated to pay in cash because the surge in mortgage rates makes them want to avoid loans – and the high monthly interest payments that come with them – altogether. Mortgage rates have declined in recent weeks but are still hovering above 6 percent,” Redfin Economics research lead Chen Zhao said in the December 2022 report.
“During the pandemic housing boom, buyers were incentivized to pay in cash because of low rates, which drove up competition and made all-cash offers an effective bargaining chip for those who could afford them,” Zhao added.
Year-end data from the NHAR shows there were a total of 19,005 closed residential real estate sales in 2022 – 14,456 single-family homes and 4,549 residential condominiums. Given the Redfin average of all-cash transactions in Bew Hampshire is 32 percent, that could mean about around 6,080 of the transactions were in cash.
“Because they had the cash, they were making offers that were higher than asking, knowing that the potential other buyer that was interested in the property that was looking to get a mortgage couldn’t go much higher than asking. If they’re going to get a loan, that property has to appraise,” said Cushing. “People that were looking to buy a home and they made an offer and they had a financing contingency, they were almost just set aside versus all the cash offers.”
January sales data
According to NHAR’s January real estate report, the current median selling price for a single-family home in New Hampshire is $415,000. That’s an increase of 4 percent from January 2023, but down significantly from the historic high $460,000 recorded both in May and June of 2022.
The median price of a condo in January was $340,000, up 13.3 percent from the year before.
Both Hancock and Lyndeborough are in Hillsborough County. The county, according to NHAR data, recorded a median sales price of a single-family home of $405,000 in January, up from $440,000 in January 2022. The median asking price was $475,000.
The most expensive county in which to buy a house remains Rockingham, as it has for many months. The NHAR reported the January median sale price was $540,000.
In addition New Hampshire was among the states with the lowest rate of foreclosures in January.
The state had a foreclosure rate of 0.01 percent, 41st among states ranked higher to lower. The highest was Delaware at 0.05 percent. The lowest was South Dakota at 0.00 percent, according to a report supplied by ATTOM, a curator of land, property and real estate data.
Nationally, according to ATTOM, default notices, scheduled auctions or bank repossessions were up 36 percent in January from a year ago, and up 2 percent from the prior month.
New Hampshire had a total of 62 filings in January, up almost 41 percent from January 2022, but down 21.5 percent from December.
Cushing said he doesn’t expect much to change in 2023 from what the market has experienced the last couple of years: high buyer demand and limited inventory.
“At least in my 30 years (as a Realtor) I have never seen a time when there’s less than 1,000 houses for sale in the state of New Hampshire,” said Cushing. Winter is a normal slow time for real estate sales here, but, he added, “It’s never been that slow.”
Cushing added: “My hope is that once we get closer to spring, we’re going to see some listings start to tick up a little bit. Once that happens, we’re going to pick it up a little bit. Interest rates have come down and relaxed. There’s still plenty of buyers out there, so I have all the faith that 2023 will be very similar to 2022.”
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