Fall 2023 Market Observations – A Change of Pace

Sunburst shining through trees during autumn season in New Hampshire

Last night, I got my seller clients’ house under contract. With a beautiful property presented as best as possible to the market, we ended up with two showings the first weekend (one of them was actually Monday), and one offer. This is a very different experience than the twelve showings per day on Saturday and Sunday with three-to-eight offers in hand by Monday evening. That’s how it was in 2021 and the first half of 2022. Even this spring was busy. But things are quieting again.

So what? Well, it’s been a somewhat strained marketplace for a while. People have wanted to buy since the low interest rates of 2020, but the lack of inventory and competitive out-of-state buyers made it a challenge for people without substantial means.

Still, the desire was there, and for many, it hasn’t subsided. The consensus is that people wait until the market crashesthe bubble bursts, or until the economy goes into recession.

These situations may occur in the short term. Still, the people I follow who earn their livelihood in speculating and predicting the real estate market and the national economy (using technology and mathematics that I can’t begin to fathom) suggest those scenarios are unlikely—mainly the first two.

Nonetheless, many buyers are holding out, and most sellers are buyers too. What I’ve seen more than that isn’t a decisive waiting so much as a passive observance of homes. People I’m dealing with seem to be waiting, but not without engagement. They’re convinced that when the right thing comes up, they’ll move on it.

This confused me earlier in the year because I would find the “right thing” according to what they were looking for, and in more than a couple of instances with different people, they still didn’t move on them—they didn’t even view them in person. I respect their perspective and trust they know what’s best for them more than I do. But the observation remains.

On the other end of the spectrum, I see sellers thinking about selling, and those ready to sell are people moving out of state—in most cases. The number of sellers leaving compared to those moving locally is significant. Similar to the buyers as mentioned earlier, who are thinking about buying but believe they’re active buyers merely awaiting the right home, these sellers are moving “for work” or “because they need to be closer to someone” or “because it’s time,” but I believe it relates more to the cost of living, maximizing returns, and the arbitrage inherent in moving to different places.

Many people I’ve spoken with are or have considered leaving the area because it’s expensive. Between high property taxes, increased cost of living, relatively limited amenities, and the peak price their homes can now fetch, they can move somewhere else to get much more (house, location, convenience, cash flow) for much less. This is especially true of those who can move and pay cash, where high-interest rates aren’t a consideration.

New Hampshire has benefitted from the cost of living and home price perspective, with buyers moving here from Austin, DC, and various cities in California, Atlanta, and always New York, Connecticut, and Massachusetts. This has been especially prevalent over the last two or three years, with remote work agreements freeing people to live where they choose. This has put New Hampshire on the map as a very desirable place to live. However, it’s curious to see sellers doing the same thing and moving elsewhere.

This isn’t a warning call but an observation of the market. People with cash still buy and sell because they’re somewhat indifferent to the rates. People who need to move and those who believe they need to still do and always will. But the greater population seems stuck in a holding pattern. It’s business as usual for us, but generally less of it.