New Hampshire’s economy, which came to a screeching halt last spring, is not only revealing this year, but at least is running on full four cylinders.
The unemployment rate is 2.5%, and there are more jobs available than before the pandemic.
The average single-family home price, which rose 25% in May, topped $400,000, and homes are selling for 25 days on average, 4% above the asking price.
Bankruptcies are at an all-time low, and when it comes to business startups, there are 25% more new business filings to date than before the pandemic. Business tax revenue is 29% higher than expected.
Page views on the state’s website, visit.nh.gov, have increased by a quarter this summer, not from last year but from 2019. The number of hotel stays has almost become normal.
Yet, in the midst of abundance, there is scarcity. There are more than 20,000 fewer workers than before the pandemic. More than half is single-home inventory. And there is an acute shortage of supplies and materials. Exports have increased, but so far imports have fallen by 17% – one of the sharpest declines in the country, reflecting serious supply chain problems.
There’s Plymouth Ski & Sports, for example, which sells bicycles, among its products, but won’t be able to get one until the summer of 2023, said Daniel Massera, owner for the past 26 years. Nor does it have so many that it can sell to customers. He once had 15 people working with him but now only three can be found.
During the summer of the pandemic, “we were crowded here to buy what we had.” They are still coming, but so much of their cargo has run out. It’s like “rain soup and all you have is a fork in your hand,” he said.
People are driving again, so manufacturers are making cars again. They need those rubber seals for auto doors. But Paul McDonald, general manager of Hutchinson N.A., a Newfield manufacturer that makes them, didn’t get people to work at $14.50 an hour or $580 per week during the pandemic, when they could get $727 on increased unemployment. Were. So he did the math, took a deep breath, and raised the hourly wage to $17.50. This is on top of paying about 20% more for supplies. But it has worked – she now employs 225, about 25 more workers than before the pandemic.
It is the employees who will ultimately decide the economic future of the state. For over a year now, the government has encouraged them to stay home. Now the emphasis is on getting them back to work.
“This is our overwhelming issue,” said Brian Gottlob, director of the Bureau of Economic and Labor Market Information at New Hampshire Employment Security. “It all depends on how we get people to work again, because there are more jobs out there than before the pandemic.”
The unemployment rate fell from 2.8% in April to 2.5% in May, falling below pre-pandemic levels of 2.6% in February, and a decrease in the number of weekly unemployment claims indicates there is a good chance that the official rate will be even less. June.
But focusing just on the unemployment rate “would be misleading,” Gottlob said, because many workers have taken themselves off the market and won’t be counted until they join.
In March 2020, before the pandemic completely slammed the state’s economy, there were 24,000 more workers than in March 2021, of whom 9,000 were in the leisure and hospitality sector, where one in eight workers have gone missing.
Labor shortage has become a labor crisis. Concerned, business organizations called for an early end to the federal unemployment benefit enhancements that once enabled people to stay at home. Gov. Chris Sununu obliged, along with about 20 other Republican governors across the country. He rolled back job search requirements in May and announced that on June 19, the state would raise $300-a-week as well as unemployment benefits for gig workers, along with COVID-related sick days and family leave. , and will put an end to the collectors. for more than 26 weeks. They offered a signing bonus — $1,000 — after eight weeks for newly signed full-time workers.
Gottlob thinks it will have an impact, especially for those at the lower end of the pay scale, who saw the greatest benefit in not returning.
But not everyone agrees. “The early closure of federally expanded unemployment benefits in New Hampshire could further limit “the ability of low-wage earners” to seek and achieve economic stability, and could slow the overall economic recovery, “The New Hampshire Fiscal Policy Institute wrote shortly after Sununu.
Time will tell, Gottlob said. “We have a natural experiment. As a data nerd, I’m very much looking forward to it.”
When Concorde Realtor Adam Gaudet of 603 Birch Realty noticed that the average single-family home price exceeded $400,000 for the first time in May, he said he was “shocked.”
That figure was not. Eventually, he sold a house for $752,000, some $92,000 more than the asking price. The price hike surprised Gaudette.
The median home value — $402,000, to be precise — was $20,000 above April, up $17,000 from March. Homeowners have seen a $50,000 increase in equity since January.
There is no secret behind the jump in prices. There is hardly any supply, combined with stagnant demand and an increase in out-of-state buyers.
There were 1,517 homes for sale across the state in May, less than half the number a year earlier. Some 2,000 hit the market in May, but they were closed in an average of 25 days, which was half the time it took to sell them a year ago. And they’re going for over 4% off the asking price.
While the increase in the number of outside buyers is small (a little over 30% by some points), they often come with big city salaries and inflated stock portfolios, allowing many to pay in cash.
Nowhere has the prices increased as compared to the northern part of the state.
Homes in Coos County have more than doubled in price to $245,000, and this is the low end of the market. In Carroll County, they rose 38.6% to $395,000, and in Belknap County, 36.7%, to $410,000.
“I’ve never seen anything like this. All I know is that everyone wants to be here,” said Adam Dow of Dow Realty Group in Wolfboro.
The Dow recently sold an asset for $6 million that was sold for $4 million two years ago. About 200 families come to an open house on a weekend.
“Sellers are upset if it doesn’t sell on the first day,” Dow said, and buyers “are sick of not accepting their written offers.”
However things can slow down.
Sales have increased, but only increased by 6.1%. And pending sales are up only 4.4%.
“Twenty percent year to year is not sustainable,” said Bill Weidecker of KW Metropolitan in Bedford. “Wages are not increasing 20% year on year. We are going to see a stall in the market at the end of 2021.
Not many homes are for sale anyway. In Goofstown, there were five in the market. “You can see that whole list in the afternoon,” Vidakar said.
But you can’t build much inventory if you can’t buy land to build a house or wood on it.
“The cost of the land is too high,” said Dehan Desharnais, owner of Spruce Building & Development in Candia. “And some materials are more than three times the price six months ago—steel, and sheet-rock soils are going to be hard to find in anything. That’s insane. The cost of the materials is going through the roof. At some point, some give up.” He is going. “
You’d think loggers are benefiting from all this, but that’s not the way it works, said Jason Stock, executive director of the New Hampshire Timberland Owners Association.
Sawmills are bringing in a pretty penny for the wood they process, but they can’t get the logs. That’s because loggers are reluctant to cut because most biomass plants have closed, resulting in “the worst low-grade market I’ve ever seen. If they can’t sell two-thirds of everything that’s a lot.” is growing, so is it worth cutting the second third?” Stock said.
Work from home (and shop) has made residential space more valuable. The opposite can be said for non-residential space. But, said Chris Norwood of commercial real estate firm The Norwood Group, “it’s unfair to say that office space is dead.” Although he admitted, “It’s soft.”
There isn’t much demand for retail space either, but long leases have calmed a gloomy market, and some relocation is underway. Some former retail sites are being converted into apartments, others into grocery stores.
Warehouse space, however, is another category entirely.
“It’s more cubic feet than square feet,” Norwood said. There is a lot of demand for that space, just not much supply.
Ed Butler, the co-owner of The Notchland in Hearts location, resigned as the Democratic Party leadership in the House of Representatives to keep his business alive. Now he is finding it difficult to do all the work.
“Advance reservations are better in five years, and I am hearing the same from other people in the region,” he said. “Things started in mid-April, and the phone didn’t stop ringing.”
Having trouble finding employees. “There are no people,” he said, adding that even with pitching in the family, he has two less staff.
Tourism is back, but how far back remains to be seen, especially after a bleak start over Memorial Day weekend. But from March to June 7, the New Hampshire Division of Travel and Tourism Development website was visited by about 935,000 people, compared to 438,000 last year and 648,000 in 2019. And what they’re seeing is a lot different than it was a year ago. Last year, it was the campground. A year ago it was mainly day trippers who looked at the event calendar and swimming holes. This year, it’s road trips and cabins and cottages.
Website traffic doesn’t translate into actual auto traffic, of course, although it has increased. The tourism agency, generally very optimistic, is cautious in forecasting 2019 levels, which weren’t bad – there were 3.45 million visitors that summer who spent $1.8 billion.
At the Hilton Garden Inn in Portsmouth, which opened its bar/lobby for the first time since the pandemic, things are returning to normal.
“Getting there,” told General Manager Troy Bergeron. “Weekend sold out, weekdays at 50% off.”
Statewide, weekday hotel stays were 53% in April 2019. Last April, when hotels were closed to all essential staff, it dropped to 19%, but so far this year it has returned to 44.2%.
But Steve Dupre, whose Concorde Hotels primarily handles business travel, will tell you things are still slow.
“The hotel business is a tale of two markets,” he said.
Their Grapon Convention Center in the Courtyard by Marriott – which opened on April 16 – is doing a quarter of the business it was doing before closing in March 2020. The hotel catches up with some people stopping by on the north side and attending local events. NASCAR Racing is coming in July.
“We’re grateful that the business has picked up since last year,” Dupre said. “But we have a long way to go.”
Bob Sanders can be contacted at email@example.com.
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