Vermont Multi-Family Real Estate Market Report

The investor market remains strong in northwest Vermont. The median sale price rose more than 14% across the region as the number of properties for sale plunged. This shortage of inventory resulted in a 20% drop in units sold. Buyers need to act quickly when the right property becomes available. The average days on the market (DOM) is less than three months from listing to contract with many properties selling within days, or even hours, of listing.  

As the Coronavirus spread, businesses shut down and unemployment spiked. Many predicted that tenants might not be able to pay their rent. While this may have played out across the country, landlords in our area have reported that their tenants are up to date on rent. It has yet to be seen what the long term effects of unemployment (and under employment) coupled with the end of the additional $600 unemployment benefit will be for tenants and landlords alike.

Despite newer apartment complexes becoming available over the past couple of years, the vacancy rate for rentals remains low compared to the national average. Demand from renters remains strong due to the shortage of inventory for first-time buyers and the potential buyers moving to Vermont from out of state that may rent for a year to become familiar with the area.

So far in 2020, Coldwell Banker Hickok & Boardman participated in 46% of multi-family property sales in northwest Vermont and 51% in Chittenden County. More than ever, working with an agent experienced in this unique market segment is crucial to meeting your goals.

The investor market remains strong in northwest Vermont even though statistics may not reflect it. Multi-family properties coming on the market increased in 2019 – for the first time in a number of years. This increase provided options to buyers who may have been on the sidelines in the past. While the median sales price increased across the region, Franklin County offered affordability and investors responded, increasing sales there by 17%.

Buyers will still need to act quickly with multi-family properties closing in less than 3 months throughout northwest Vermont – and closing in only 56 days in Chittenden County which represents 62% of the units sold.

Despite newer apartment complexes becoming available over the last couple of years, and with a number of new projects on the horizon, the vacancy rate for rentals remains low as compared to the national average. Demand from renters remains strong likely due to the shortage in inventory for first time home buyers – and the demand from college students in downtown Burlington.

In 2019, Coldwell Banker Hickok & Boardman participated in 30% of the multi-family sales in northwest Vermont. Both experienced and first-time investors should hire a skilled Agent with the market knowledge to help them navigate this unique segment of the market.

Newly listed investment properties posted a healthy increase over the same period in 2018 – the highest in the past 3 years. Still, demand is strong with no sign of letting up as properties are closing in less than 2 months from listing.

Long term investors, interested in realizing their gains, are opting to part with portions of their portfolios contributing to the uptick in inventory levels. If the supply of newly listed properties continues on this trajectory, we should see stabilization or growth in sales for the remainder of 2019.

Investors that are new to the market – or first-time buyers who may be challenged with affordability in Chittenden County, may want to consider multi-family properties in cities to the north and south, like Vergennes or St. Albans. “Owner – occupying” part of the property while a tenant contributes to your mortgage payment is a great way to achieve your dream of home ownership and to build equity.

The super-hot investor market shows no sign of letting up as the number of properties sold increased by 19% while inventory remained scarce. Low supply and heavy demand pushed the median sale price up nearly 14% across the market.

Chittenden County, accounting for 68% of the total multi family sales in northwest VT, saw an average sale price of almost $520,000 – driven by some high-priced sales in Burlington. Some long-time investor owners are deciding to part with portions of their portfolio to realize price gains – while new investors to the market need to be well qualified and ready to act if an opportunity presents itself.

Despite newer apartment complexes becoming available over the last couple of years- and a number of new projects on the horizon – the vacancy rate for rentals remains low as compared to the national average. Demand from renters remains strong likely due to the shortage in inventory for first time home buyers – and the demand of college students in downtown Burlington. Positive job growth in Chittenden County also contributes to the strong demand.

Investors continue to demonstrate strong demand for multi-family properties especially in Chittenden County which represents 67% of the properties sold in the region.

The median and average sale prices soared across Chittenden, Addison and Franklin Counties as supply could not keep up with demand.

A few high-priced sales in Burlington, earlier this year, pushed the average sale price to over $500,000.

Historically low vacancy rates in the greater Burlington area may have eased slightly with the construction of newer apartment buildings, however continued renter demand across the region makes real estate a good choice for savvy investors.

Investors continue to show strong demand for multi – family properties especially in Chittenden County which accounts for 65% of the total units closed in northwest Vermont during the 1st six months of the year.

The number of properties listed during the time frame dropped more than 16% and, since 2015, the properties available has declined 38%. Limited inventory coupled with the demand pushed the median price of multi-family homes up 11% across the region and 13% in Chittenden County. A few high-priced sales in Burlington drove the average sale price up to more than $575,000. Despite the building of newer apartment complexes and a slight easing of the historically low vacancy rate – demand is still high from renters. Amenities included in the newer complexes are appealing to tenants – however, these units may come with higher rents. Therefore, investors seek out opportunities by purchasing more traditional, multi-family buildings or single-family properties in neighborhoods to meet the pent-up demand.

The multi-family market showed a healthy increase in the median price sold and a big jump in the average price sold – driven largely by some high priced sales in Chittenden County.

With 24 closed transactions in Chittenden County during the 1st quarter and only 53 properties available during that time, the market remains competitive for investors. Although the days on the market from list to close increased over the same period last year, this still represents only 3.5 months on the market for closed properties- indicative of a typical “seller’s market”. Newer apartment complexes coming online have eased the historically low vacancy rate in the greater Burlington area a bit, however there is still strong demand from renters.

Multi-family properties are moving quickly in population hubs such as Burlington and Winooski, where the number of days from listing to closing is now 66. 

Despite a 6% increase in units for sale across northwestern Vermont, new inventory remains tight in these key cities. Overall, the multi-family market is tight.

A 4% decline in units sold in 2016, twinned with a couple of higher-priced sales, resulted in a near 10% dip in median sales prices across northwestern Vermont for 2017. This reflects a shift in available inventory, not necessarily a decline in property values.

The number of multi-family properties sold decreased by nearly 4% in 2017, but the number of newly listed units on the market was up by more than 6% — to 225 in all four counties.

Rents have been high in northwestern Vermont, but landlords are starting to feel a pinch as newer multi-family options have become available since 2015, causing a shift in historically low vacancy rates in the area.