Seacoast houses costly and few

PORTSMOUTH, N.H. – When Mark Constance decided he wanted to come home to New Hampshire, he drove around the Seacoast area searching for a home to replace the $360,000 one he now owns in Los Angeles. He kept driving.

“I thought if I was to spend $360,000, I’d be living in the biggest house in Portsmouth,” he said. “Driving around, my jaw just hit the floor. Everything I saw was $50,000 more than I thought, everything.”

Constance is learning what residents and real estate agents have known for some time: Seacoast houses are hard to find and expensive to buy.

Rockingham County’s population has grown by 27,000 people and York County, Maine, has seen an influx of more than 11,000 new residents since 1994.

“The demand is great,” said real estate agent John Rice. “We’ve seen people coming from Silicon Valley and a lot of young multimillionaires. These are people who are well paid and are looking for suitable properties, for which there is a limited supply.”

A couple driving through New Castle recently called Rice and asked about a quaint, little house they passed.

“I explained that was $1.2 million, and you could hear the shock at the other end of the line,” he said.

One real estate database recently showed more than a quarter of the homes for sale in the area had price tags of at least $300,000. The average cost of those properties was more than $550,000.

Just 13 percent were priced at less than $100,000, and most of them were mobile homes or condominiums.

Prices were highest in New Castle, where the average cost was $907,000. York, Maine, was second, with an average price of $875,000.

Only five out of 44 greater Seacoast towns had average home prices under $150,000 – Northwood, Raymond, Rochester, Farmington and Berwick, Maine.

While the high prices are good news for real estate agencies, one analyst said the rising housing costs threaten to reduce the attractiveness of the area for potential new employers.

“If you can’t attract the work supply, over the long run, that’s going to make the area less attractive,” said Ross Gittell, an associated professor of management at the University of New Hampshire.

“In a way, the recession of 1988 and the closing of Pease (Air Force Base), made housing affordable and the area attractive to start-up communities,” he said.

Gittell said the greatest cost may be incalculable.

“People may move up to Dover or into Maine because they aren’t as expensive, and some people in Dover and Rochester are going to be priced out of those areas,” he said.

That would create traffic problems that would leave New Hampshire looking more like Boston, he said.

“Which works against some of the reasons why people move to New Hampshire in the first place,” Gittell said.

Robin Comstock, chief executive officer of the Greater Portsmouth Chamber of Commerce, said her group is organizing a summit on the area’s affordable housing and labor supply to be held next spring.