Boston homebuyers willing to drive to southern New Hampshire or to Rhode Island have traditionally been able to find bargains. But with prices rising there, too, how long will that continue?
For years now, New Hampshire and Rhode Island have acted as safety valves for the Bay State’s ever-more insanely-priced housing market.
Middle- and working-class buyers unable to crack the Boston market have been able to find far more affordable, single-family alternatives in Southern New Hampshire and the suburbs of Providence.
But those days appear to be numbered now.
The revolution in work wrought by the pandemic – which amply demonstrated to workers and companies alike that, yes, you can work for anywhere – has turned the housing market upside down.
Tech-savvy, higher-earning professionals from around the country are using this newfound freedom to buy homes literally anywhere and everywhere, and they have cash to spend after a year of sitting at home.
Unfettered from grueling commutes, they have been scooping up homes in hitherto too-remote-to-commute from locations like Western Massachusetts and New Hampshire’s White Mountains, sending prices there soaring.
Now the same pattern could be repeating itself in Southern New Hampshire and Rhode Island.
‘The Suburbs’ Is Expanding
Closer in than remote vacation destinations, these areas have effectively become the outer edge of the Boston suburbs as home prices have gotten out of hand here.
The median sale price of a single-family home in the Granite State hit $345,000 year-to-date through the end of May, up 27 percent from the same period in 2019, when it was hovering just under $300,000, according to The Warren Group, publisher of Banker & Tradesman.
Rockingham County, home of fast-growing suburbs along the Massachusetts border, led the way. Its median single-family sale price is now a very Boston-area-like $445,000 through the first five months of 2021, up nearly a quarter from the same period two years ago.
Hillsborough County, just to the west, saw its median home price shoot up 31 percent over the past two years, hitting $379,000. Two years ago, it was a much more affordable $290,000.
Of New Hampshire’s 10 counties, six now sport median single-family prices above $300,000. In 2019, only one did – Rockingham – while the median in Canada-adjacent Coos County was just under $100,000, Warren Group stats show.
While not as steep, the median sale price in Rhode Island has also increased substantially over the past two years, rising 27 percent to $320,000 by the end of April, the most recent month for which Warren Group data was available.
NH, RI Soon Out of Reach
So, have Boston’s high-paid, newly-mobile weekday warriors discovered the virtues of bargains close to home as well?
That’s certainly a possibility – the relative proximity of Southern New Hampshire or Providence to the Boston area would certainly be attractive to families whose breadwinners are working a semi-remote schedule, say a day or two in the office and the rest at home.
Still, as prices have escalated to even more precarious heights – rising by double digits over the past year – it may be redoubling the pressure as well on middle-class families just hanging on in the Boston area, adding to the outflow of Boston’s housing market refugees.
Most likely it’s a combination of the two.
Whatever the cause, the consequences could be far-reaching for Greater Boston.
Scott Van Voorhis
As median prices push towards the $400,000 mark and beyond in New Hampshire and Rhode Island, they are already getting beyond the means of middle-class families, requiring a combined income of well over $100,000.
That, in turn, could start to have real consequences for Greater Boston, the economic engine of New England.
Companies are already struggling to find workers, especially for the large range of jobs that don’t carry six-figure salaries. Just imagine what happens when the cost of buying a home in Salem or Derry, New Hampshire starts to look not all that much different than in many Boston suburbs.
Look out, because these last bastions of middle-class affordability are starting to crumble, and fast.
Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
