Welcome to fall in northwest Vermont, and to our Fall 2019 Market Report through the 3rd quarter (Q3), January – September 2019.
Each quarter, we combine the Multiple Listing Service (MLS) data with the expertise of our Agents to offer a recap of real estate activity and trends in the 4 counties of northwest Vermont: Addison, Chittenden, Franklin and Grand Isle.
Traditionally, the “height of the market” is the 3rd quarter, late spring through summer; however, we have seen this heightened activity continue into fall in recent years. While the ongoing story in the national and regional market has been the contraction of inventory for sale, we did see some relief during the 3rd quarter, with new properties coming on the market increasing slightly over last year. This resulted in an increase in single-family home sales. Still buyer demand exceeds supply – pushing median and average sale prices higher.
With interest rates lower than last year, sellers and buyers would be wise to stay in the market during the 4th quarter of 2019 and 1st quarter of 2020, while properties are still in demand and at their most affordable.
Our skilled REALTORS® can help you with more specific price points in certain cities and towns. Given our market leading position, we are committed to providing unparalleled service and results for our clients.
The number of newly listed single-family homes has increased over 2018, resulting in an increase of 13% in units sold. Still, demand remains strong with homes being on the market for only 6 weeks from list to close.
Condominiums remain a popular choice among buyers interested in ease of maintenance and more affordable prices as compared to single-family homes. The decline in newly listed condos is likely affected by new construction projects that came on the market during 2018.
If you are considering selling your home – do not wait until spring! Demand and pricing are strong now. Serious buyers are in the market and may be flexible with closing dates in order to secure the home of their dreams.
The prices of homes sold continue to increase over 2018. Homeowners, considering the sale of their property may want to act now in order to optimize their gains.
Franklin County offers a variety of housing options and price points from city homes in St. Albans, suburban developments in Fairfax, country homes in Georgia and Swanton – or mountain living in Montgomery. Buyers may have a bit more breathing room when deciding to purchase in Franklin County – but don’t wait too long – homes and investment properties are selling on average in only 3 months on the market.
Single-family home sales continued to increase through the 3rd quarter of the year during what is typically Grand Isle’s peak season. Homes are selling more quickly as well – only 4 months from list to close – down from nearly 6 months a year ago.
With a median sale price of $258,750 across the county, prices become more affordable as you travel north. Sellers should take advantage of strong demand and limited inventory by keeping their properties on the market during the holidays and winter season – which may be counterintuitive to the traditional trends of an island community.
Sales of luxury properties (defined as closed price of $850,000 for this report) remain strong so far this year. This has created favorable conditions for sellers and buyers alike. Well-designed homes, with proximity to downtown, access to the lake, or with views and acreage are what today’s buyers are searching for.
The mid-year point is an important milestone for real estate trends, especially in northwest Vermont. We are in the midst of the traditional “height of the market.” Closings on real estate sales surge in June, July, and August in between the school year, vacations, holidays and other life events that typically drive the market. In addition to single family and condominium sales – this report looks at results and trends in luxury & multi-family sales – as well as land sales throughout the region.
Low inventory continues to be the story in the national and local housing market. Properties coming on the market have been in short supply for a few years resulting in less sales, while demand remains strong. Steadfast price growth for homes in northwest Vermont is good news for sellers but has challenged some buyers trying to get into the market. Competition for properties under $400,000 may not let up for quite some time.
So far in 2019, first-time buyers only accounted for 31% of home sales – well below the historic market share of 40% according to the National Association of REALTORS. There remain several reasons first time buyers are struggling to get in the market: student debt, starter home inventory in short supply, and credit score requirements are tighter than historic norms.
Nationally & locally, new construction levels have failed to keep pace with population growth, shifting demographic preferences and the aging housing stock. Vermont has the second oldest housing stock in the country. Builders face challenges in land, permit and material costs, as well as shortages in labor. In some communities, neighbors are raising concerns about the loss of green space and wildlife habitats. Strong voices are needed for zoning and regulatory changes that many local governments are weighing as a way to increase housing density and improve affordability.
At a recent Burlington Housing Summit, the topic of Accessory Dwelling Units (ADU’s) added to existing homes was presented as an innovative way to tackle housing shortages. Fannie Mae is funding a pilot program in Denver to add ADU’s to low and middle income housing which will also generate extra income for homeowners. This type of infill housing helps support multi-generational living and allows aging homeowners to stay put longer since they can rent the ADU or primary residence to earn extra income and help with home maintenance. Zoning and permitting restrictions along with the cost of adding ADU’s needs to be considered if this to be a viable solution.
Homeowners are staying put longer. On average, homeowner tenure is 8-10 years vs. 5-7 years less than a decade ago. With rising home prices and tenure increasing, real estate wealth of homeowners is growing (total asset value minus outstanding mortgage). In many cases, the wealth held by older generations is transferring to first-time buyers. According to a recent NAR survey, first time savings counts (measured in 10 states) allowed “grandma” to make deposits, and 1/3 of first-time buyers had help from family members.
Throughout this report, you may see the terms “affordable or more affordable” used when describing a particular housing type or a particular city or town. Affordability is a relative term since Vermont – particularly northwest Vermont – is not, on average, as affordable as other parts of the country such as the midwest or south. The median price of homes in northwest Vermont, at $300,000, surpasses the national median price of $261,600. Coupled with high property taxes, the cost of living in Vermont may not be “affordable” for some. Having said that, for the purposes of this report we are comparing our markets and identifying properties and towns that may have a median price below other counties or the regional average.
Demographically, millennials have overtaken baby boomers as the largest US adult population – and they’re starting to buy homes. Statistically, they make up 45% of the home buying population. When the full buying potential of this population is realized – and the housing supply issue has been addressed, solid home sales growth should follow.
Buyers who are at a point in their life where they are ready and able to buy will find today’s prices coupled with low interest rates are an advantage over long term rentals.
The number of single-family homes coming on the market has increased over the same period last year for the second consecutive quarter. While this is good news, the increase in supply still cannot meet the demand from buyers. Median and average sale prices, once again, posted increases pushing the levels to record highs.
Condominiums offer a lower maintenance lifestyle than single family homes. In most towns in Chittenden County, the median condo price increased as inventory declined sharply. However, the prices are typically less than a single-family home of similar age and condition. New developments in Williston, Essex and South Burlington, over the past couple of years, increased the number of condos available for sale during those periods. As these new communities near the build out of existing phases, inventory numbers have fluctuated.
Hot spots – areas with increased median price and number of units sold include Burlington, Colchester, Jericho, Shelburne, and Williston. Winooski is still the “most affordable” town in Chittenden County with a median price of $281,500. However, continued demand from buyers, attracted to the vibrant downtown, has resulted in multiple offers on newly listed homes – many of them cash sales with few contingencies. The “Days On Market” (DOM) in Winooski is just over one month.
Adjustments reported in the number of sales and new listings in South Burlington is a result of a shift in inventory available in new developments such as Hillside at O’Brien Farm which launched in 2018 and has closed nearly 25 units – and the near completion of Phase 2 to permitting Phase 3 at South Village.
With few exceptions – homes are closing in less than 2 months from list date. Sellers must be prepared to act quickly when their property hits the market and offers come in. Working with your agent in advance to identify where you want to live and what your budget will allow is important in managing expectations. To realize the most value from the sale of your home, now is the time to start cleaning out your garage, basement and closets; and to complete deferred maintenance items while the weather is on your side.
Although the median price of single-family homes dropped by nearly 7%, this was compared to a 9% increase last year. The bright spot may be the slight increase in newly listed homes after months of sharp declines. With few condominium complexes throughout the county and therefore few sales, the increases in units and prices of sold properties need to be taken in context.
Fueled by robust increases in the price of homes sold in St. Albans, Georgia and Fairfax – the median sale price for Franklin County rose to $225,000. Homeowners, considering the sale of their property may want to act now in order to optimize their gains.
The decline in the number of homes sold year to date may be more a factor of decreased inventory rather than a lack of demand. Countywide, sales take little more than 3 months from listing to closing.
Fairfax, within a comfortable commuting distance to employers to the north or south, has the highest median price in the county and remains a popular option among buyers. The lack of new homes coming to market affected the total number of sales. With “DOM – days on market” at only 70 days – homes were quickly purchased by ready and able buyers.
St. Albans and Swanton together account for nearly half of the sales in the county. The median sale price has increased in both cities helping push the county median up nearly 10%.