Real Estate in the
Greater Portsmouth Area

Whether you are looking to buy a home or relocate a business, the New Hampshire Seacoast provides diverse opportunities to settle into an area of breathtaking beauty, rich history, and unparalleled quality of life. While high-tech bubbles build and burst and interest rates rise and fall, New Hampshire's 23-mile coastline remains one of the most prized areas in the nation.

Few cities are as perfectly situated as Portsmouth, which lies on the ocean between Boston and Portland, Maine, and a short drive from Manchester, the New Hampshire Lakes region, and the mountains. The Seacoast boasts the thriving Pease International Tradeport, commuter railway service, and proximity to three expanding airports, as well as exquisite architecture, and nearly 400 years of history that you can feel in the landscape-a mixture of charming red brick buildings fused with entrepreneurial vigor.

There are few cities where one can point to a modern, nuclear-capable naval shipyard housed in 200-year-old facilities and a house where John Paul Jones once stayed during the American Revolution. That's Portsmouth-a place awash in aesthetics, infrastructure, and community.

And a place where, despite a seeming dearth of land to develop, new buildings are going up, and new people are moving in. The market is maturing: there are no steals left. A new one-bedroom condo near downtown Portsmouth can easily go for $500,000.

Keeping the market hot are a growing number of high-paying jobs being created at the Pease Tradeport, the growth of the Manchester Airport (giving residents a major airport 40 minutes away) and a sense shared by most realtors that Seacoast property values can only go up.

"We have great history, a dynamic arts community, many restaurants, and the sea," says Jeff Marple of Marple & James Real Estate. "There's limited space, and endless demand, so this market will continue to expand." Housing prices, however, are still reasonable when compared to Boston, Marple says.

"The worst case scenario might be that values go up by percentage points, rather than doubling every few years," says Jill Jarvis of Gateway Funding in Portsmouth.

"The Seacoast has a talented, vibrant workforce of well-educated people," says Kathy Kane, CCIM, SIOR of the Kane Company. "Our community is willing to sacrifice on salary in order to live where they want to live."

The Home Market

The variety of housing along New Hampshire's Seacoast runs the gamut from one-bedroom condominiums in restored mill and factory buildings, 18th and 19th century farmhouses, single-family homes in Portsmouth's historic Strawbery Banke and the red-brick duplexes in Atlantic Heights that served as shipyard worker housing during World War I, to modern townhouses, apartments and condos converted from Victorian mansions, and new single family and luxury condominiums and homes. 

The variety is there, but the market has changed, according to Carolyn McGee, of Hall-McGee Buyers Brokers of the Seacoast. "We are returning to more seasonal fluctuation, which was the norm before the heated market of the past few years kept inventory scarce, prices bordering on unrealistic, and buyers with few options."

According to McGee, the housing inventory is beginning to stabilize: buyers are beginning to see more options and opportunities for more rigorous negotiation with sellers. It is still challenging to find housing under $300,000 in the Seacoast, but not impossible. Two areas of growth, McGee says, are new and converted condominiums (which range in price from under $140,000 to well over $1 million), and housing designed for retirees and empty nesters.

Kathy Rush of Prudential Rush Real Estate says that many people continue to relocate in the Seacoast, including the "snowbird" population
(two-home families who spend winters in the south), retirees (often downsizing out of large homes into condos), and young people with more disposable income wishing to buy rather than rent.

Over the past 18 months, Rush says the number of days properties spend on the market has gone up. "The days of sellers reaching for over-market value are gone." However, Jeff Marple says there were 20 fewer Portsmouth listings for July 2005 than in July 2004, so the inventory remains low.

McGee advises buyers to first get their financing in place, after which they can "preview" the market at online sites such as www.realtor.com. "When buyers are ready to "go inside," they should contract a real estate agent who can work for them," McGee says. "In a changing market, this becomes extremely important."

Despite nine interest rate hikes between 2004 and 2005, a spike in oil prices, and the ongoing
war on terror, mortgage rates are still low compared to decades past. "Considering what's going on the in world, the rates are very low," says Jill Jarvis of Gateway Funding in Portsmouth. "Rates for a
30-year fixed mortgage may have crept back up over 6 percent, but few new buyers remember that back in the 1980s, when they were more than double that figure."

McGee says the market is still active and strong. "The present adjustment in pricing is healthy and should result in a continuance of both growth and activity," McGee says.

New Units, New Buyers

"New construction is going well," says Kathy Rush. "The Hilton and Gateway condominium developments in Portsmouth are over 60 percent sold out, as are the Thatcher units in Exeter, so that part is strong." The Hilton project is a new six-story hotel on Hanover Street in Portsmouth that includes 21 condos priced between $500,000 (for one bedroom) and $1.3 million (two and three bedrooms).

Most realtors advise buyers seeking the most house for their money to head north and west, the rule of thumb being $1,000 a mile. If you head 20 miles north, the same-sized house should cost $20,000 less. However, even cities and towns outside the Seacoast (Rochester, Rollinsford, and Barrington) have strong markets.

The Business Sector

Companies relocating to the Seacoast continue to have many options for space, according to Kathy Kane of The Kane Company, a leading commercial developer based in Portsmouth whose recent constructions include a building for Southern New Hampshire University at Pease and a new medical building on Borthwick Avenue.

"The Seacoast offers many options for relocating to an office or flex space," says Kane. "The downtown area and Pease are filling in, but there are still a number of great spaces available." An exception, says Jeff Marple, is marquee space in downtown Portsmouth. "If a business wants a storefront in downtown Portsmouth, they should contact a real estate agent and get on a list," Marple says.

The exiting of manufacturing companies from New Hampshire has freed up larger facilities in the region, though many don't easily convert to smaller operations or office space due to their scale. Kane thinks rezoning at places such as Pease, which lost electronics giants Celestica and Flextronics, might be needed down the road.

The attractiveness of the Seacoast has had its effect on business development as well. Companies are seeing that the Portsmouth region attracts skilled workers looking to build lives as well as careers.

"The office market is full of demand for companies who want to own their own space, rather than lease," says Kane. "Companies want to take advantage of tax benefits and the long-term appreciation of a market they already feel good about." 

Pease Continues to Grow

Much of the business development of the past decade has happened at the Pease International Tradeport, the former air force base site that now has 218 businesses that employ about 5,200 people, with approved projects that could add an additional 2,000 jobs in the next two years. "There is a healthy demand for space that continues to draw businesses to Pease," says David Mullen, executive director for the Pease Development Authority.

Even during the recession and high-tech bust of 2001, Pease saw no construction cancellations and has developed over 3.7 million square feet of space with 500,000 approved for future development.

Pease now has six educational institutions, including New Hampshire Community Technical College and Southern New Hampshire University, a vital resource for maintaining a competitive, well-trained workforce.

In April 2005, International Marketplace opened on Manchester Square, a 42,000-square-foot facility on two floors that houses a food court, dry cleaner, barbershop, dentist, and cell phone store. "It's designed to be a meeting place for workers that also offers time-saving amenities," says Mullen. The Marketplace, which is of red brick with a pitched roof and clock tower, was also the site for four outdoor concerts at midday in the summer of 2005.

The long-range goals for Pease include increased air service, a challenge right now in an extremely competitive industry, Mullen says. PanAm offers flights to New England destinations and will reactivate its 727 fleet for service to Florida by year's end. "We continue to talk to other airlines, for both passenger and cargo flights, and see airport development as a key area for growth," Mullen says.

What has emerged in the Seacoast is a real estate market that is challenging to enter, but still too enticing to overlook.