NH office market continues remote work adjustment post-COVID

Residential market sees fourth month of price decline, but no long-term relief in sight

Post COVID, working remotely has settled in as a norm in New Hampshire, and as a result, the state’s commercial real estate is in an unsettling period.

Kristie Russell, research manager at Colliers, described office buildings as “a market in transition,” in a third-quarter report on commercial real estate trends in New Hampshire.

Vacancy rates in office buildings across the state were 13.3% for the quarter, still high compared to pre-COVID rates.

“Tenant movement remains mixed as companies right-size their footprints — some downsizing while others expand,” said Russell in her analysis.

The two elements driving the market right now are the need for higher-quality accommodations (in Class A office buildings) and the need for small versus large space, what Russell describes in her report as “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, even as Class A asking rents declined,” said Russell, adding, “Offices around 2,000 square feet continue to see steady activity, particularly from medical and financial services users.”

Data from the New Hampshire Fiscal Policy Institute (NHFPI) bears out this notion that the remote work forced upon companies by COVID pandemic-era lockdowns (March 2020 to May 2023) is still a norm rather than an exception.

Remote work is now a permanent part of New Hampshire’s economy, according to Phil Sletten, NHFPI’s research director.

“About 16% of workers age 16 or older, or about 121,000 people, worked from home in 2024. That’s down from the pandemic peak of 19.3% in 2021, but still more than double the pre-pandemic rate of 7.3% in 2019,” said Sletten in a report.

He noted the continued reliance on at-home work is shaping the regional economy — in hiring, transportation and child care to name a few.

“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,” said Sletten in an analysis written for NH Business Review.

The Colliers report on office space is one of two quarterly reports released by the local office of the commercial real estate services company that has locations in Portsmouth and Manchester. The other report looks at the industrial market that includes manufacturing and warehouse space.

Office vacancy is tightening in the Manchester submarket, according to Russell, while the Portsmouth submarket, particularly the Pease International Tradeport there, “continues to face higher vacancy.” Landlords there, she said, are offering incentives for the larger blocks they’re struggling to lease.

On the industrial side of the commercial property ledger, lessees there are also taking a right-sizing approach, according to Russell’s third quarter report.

The report shows manufacturing/warehouse vacancy in the New Hampshire market rose slightly to 5.8%, while average rents declined 4.6%.

“New construction has slowed, with speculative projects largely paused,” said Russell. “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.”

Meanwhile in the month of October, the median price of a single-family home declined to $526,000.

Prices have been trending lower since June when they reached a record $569,000. The median went to $549,500 in July, rose slightly to $550,500 in August, then dropped again in September to $535,000, according to New Hampshire Association of Realtors (NHAR) data.

To put that in some context, in January 2022 the median price for a single-family was $399,900.

Susan Cole, president of NHAR, said we’re far from being out of the woods just yet when it comes to housing supply, prices and affordability.

“Comparing October 2024 to October 2025, prices have still risen by 4.5%. That marks 69 consecutive months of year-over-year price increases,” said Cole, owner/broker of Susan Cole Realty in Lebanon. “Until those gains begin to flatten, housing affordability will continue to challenge many families, retirees and workers across the state.”

Cole noted that, typically, median sales prices tend to decline from their summer peaks as we move into the winter months and that prices vary by region. “Counties such as Rockingham and Carroll continue to experience strong upward pressure on median prices, while others — including Belknap and Cheshire — have seen more stable conditions in recent months,” she said.

The pressure on supply continues.

“The state’s housing supply remains exceptionally tight at just 2.5 months, far below the six months considered a balanced market and well under the national average of 4.6 months,” said Cole, citing the latest NHAR data. “Reaching a healthier level of inventory would help relieve price pressure. But for now, pent-up demand and more attractive mortgage rates are keeping competition strong.”

Here, by county, are the median prices for a single-family home as of 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

Here are the October median prices for townhouses/condominiums in each county:

• 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

Registration is open for a major forum on housing scheduled for Dec. 12 and hosted by Saint Anselm College’s Initiative for Housing Policy and Practice and the Center for Ethics in Society.

The theme is entitled “Supply Unlocked: Levers for Housing Growth” and will focus on tools for creation of housing.

A featured speaker will be Mike Kingsella, the CEO of Up for Growth, a national coalition advancing pro-housing policy solutions.