Vermont Luxury Real Estate Market Report

Northwest Vermont’s luxury market encompasses a wide variety of options, ranging from waterfront property to Victorian mansions in Burlington.

This year has brought renewed activity for homes priced above $800,000, although this segment has been slower to recover than the market for mid-priced housing in Northwest Vermont. There is still substantial inventory available, refl ecting approximately a three year supply of homes.

The state’s relatively high property taxes might be discouraging second-home buyers from purchasing real estate in Vermont. While lakefront property has been a traditional pull with luxury buyers, our agents are also seeing increased interest in country properties, as well as homes that offer good values and are located near Burlington.

The luxury property market has been focused in Chittenden County so far this year, representing two-thirds of the over-$800,000 sales. Five sales were located in Addison County, while Grand Isle recorded three transactions.

A Shift to Country and City Estates

While waterfront property continues to be a draw for some buyers, country and city properties have dominated the market this year.

Close to Town

Buyers are particularly interested in high-end homes that are close to Burlington and its amenities, such as the University of Vermont Medical Center and its vibrant arts scene.

Waterfront Concerns

Concerns continue to linger after the floods after Tropical Storm Irene in 2011. Buyers are seeking properties with homes that are elevated above the lake, and with seawalls that are in good condition.

The luxury residential market in Northwest Vermont offers a range of spectacular properties, drawing buyers interested in waterfront estates, country properties, as well as stately city residences.

While our Agents are seeing signs of renewed activity in the luxury market, this segment has been slower to recover than the region’s mid-range housing. One reason may be Vermont’s relatively high property taxes, which may potentially dissuade vacation-home buyers from purchasing in the state. Below are a few trends that are impacting the market for homes above $800,000.

A Slower Pace

Sellers have readjusted their expectations for sales prices amid slower demand for high-end property. That means buyers may find excellent values among the region’s luxury properties, with some homes selling below assessed value.

City Living

Our Agents note that buyers are increasingly looking for high-end homes in or close to Burlington because of a desire to be near restaurants, the arts, and the University of Vermont Medical Center.

Waterfront Property

Buyers seeking waterfront properties are interested in homes with higher elevations and seawalls in good condition, given concerns about flooding.

Traditionally, the region’s waterfront properties have maintained a strong draw on luxury buyers. However, the first half of 2015 has seen a shift toward properties closer to town or with large acreage. Only four of this year’s sales included waterfront access.

Chittenden County represented the bulk of high-end sales, with nine transactions above $800,000. Four sales were located in Addison County, while Grand Isle recorded one transaction.

Northwest Vermont’s lakefront properties and country estates maintain a strong pull on high-end buyers, although this year’s below-normal winter temperatures may have slowed down some prospective buyers. With Vermont finally experiencing spring, our agents are seeing some signs of renewed activity. Both primary residences and vacation homes are popular with buyers seeking $1 million-plus properties.

During the past 12 months, nine $1 million-plus home sales were recorded. Two $1 million-plus sales were recorded in the first quarter, with both sales closing in March. The remaining seven luxury sales closed in the summer or fall of 2014.

Five of those properties included lakefront access, which is a traditional attraction for high-end buyers searching for homes in Northwest Vermont. The most expensive property was a $1.35 million estate in South Hero, located on 13 acres with 350 feet of shore access.

Seven of the past year’s luxury sales were located in Chittenden County, while one was recorded in Addison County’s Ferrisburgh. Grand Isle’s South Hero had one luxury sale, as noted above.

The most recent high point for the luxury market, in terms of number of sold properties, was in 2012, when 16 homes sold for more than $1 million.

The past two years have witnessed a slower pace of luxury sales, with sellers readjusting their expectations. At the end of March, there were 58 residential properties priced over $1,000,000 on the market in Chittenden, Addison, Franklin, and Grand Isle counties with 3 properties under contract. The inventory will increase over the spring and summer months. At this pace, it could take two years or more for the inventory to be absorbed by the market.

With a wide inventory available in the luxury market, many $1 million-plus homes require additional time to market than do mid-range homes. Current luxury inventory has been on the market for an average of is 338 days. Competitively priced properties may sell more quickly.