The New Normal: Remote Work's Lasting Impact
Post-COVID, remote work has firmly established itself as a permanent fixture in New Hampshire's economy, leading to significant shifts in the commercial real estate landscape and beyond.
Office Real Estate in Transition
Kristie Russell, research manager at Colliers, describes the office building market as "a market in transition" in her third-quarter report on commercial real estate trends. Vacancy rates across the state stand at 13.3%, still elevated compared to pre-pandemic levels.
Russell notes, "Tenant movement remains mixed as companies right-size their footprints — some downsizing while others expand." The market is currently driven by two key factors: a flight to quality acceleration and sustained small block demand.
- Class A vacancy dropped 1.7% year-over-year, reflecting tenant preference for higher-quality buildings
- Offices around 2,000 square feet continue to see steady activity, particularly from medical and financial services users
Remote Work Becomes Permanent
Data from the New Hampshire Fiscal Policy Institute (NHFPI) confirms that remote work is no longer an exception but a lasting norm. Phil Sletten, NHFPI’s research director, reports that about 16% of workers (approximately 121,000 people) worked from home in 2024. While down from the pandemic peak of 19.3% in 2021, this remains more than double the pre-pandemic rate of 7.3% in 2019.
Sletten emphasizes that this continued reliance on at-home work is fundamentally reshaping the regional economy across multiple dimensions: "Remote jobs, commuting habits and even housing markets look different than they did just a few years ago, and those shifts have reshaped the state's economy."
Regional Variations in Office Markets
The impact varies across different submarkets:
- Manchester submarket is seeing office vacancy tighten
- Portsmouth submarket, particularly the Pease International Tradeport, "continues to face higher vacancy"
- Landlords in struggling areas are offering incentives for larger blocks they're having difficulty leasing
Industrial Market Adjustments
On the industrial side, lessees are also taking a right-sizing approach. Manufacturing/warehouse vacancy in New Hampshire rose slightly to 5.8%, while average rents declined 4.6%.
Russell notes, "New construction has slowed, with speculative projects largely paused. This limited pipeline should help vacancies tighten as existing space is absorbed. Overall, the market is stabilizing after rapid growth, creating better negotiating conditions before fundamentals strengthen again."
Housing Market Pressures
The residential real estate market continues to face significant challenges. In October, the median price of a single-family home declined to $526,000, though prices have still risen by 4.5% compared to October 2023.
Susan Cole, president of NHAR, highlights the persistent affordability crisis: "Until those gains begin to flatten, housing affordability will continue to challenge many families, retirees and workers across the state."
Key housing market indicators:
- 69 consecutive months of year-over-year price increases
- State housing supply remains exceptionally tight at just 2.5 months
- Far below the six months considered a balanced market
- Well under the national average of 4.6 months
County-by-County Housing Data
Single-Family Home Median Prices (October)
- Belknap: $554,900
- Carroll: $500,000
- Cheshire: $399,500
- Coos: $249,500
- Grafton: $522,000
- Hillsborough: $525,000
- Merrimack: $525,000
- Rockingham: $668,000
- Strafford: $520,000
- Sullivan: $363,500
Townhouse/Condominium Median Prices (October)
- Belknap: $330,000
- Carroll: $386,900
- Cheshire: $284,000
- Coos: $742,000
- Grafton: $348,500
- Hillsborough: $390,000
- Merrimack: $400,000
- Rockingham: $497,000
- Strafford: $377,500
- Sullivan: $268,750
Regional variations persist, with counties like Rockingham and Carroll experiencing strong upward pressure on median prices, while Belknap and Cheshire have seen more stable conditions.
Looking Forward: Housing Solutions
Registration is open for a major housing forum scheduled for December 12, hosted by Saint Anselm College's Initiative for Housing Policy and Practice and the Center for Ethics in Society. The theme "Supply Unlocked: Levers for Housing Growth" will focus on tools for housing creation, featuring Mike Kingsella, CEO of Up for Growth, a national coalition advancing pro-housing policy solutions.
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