Welcome

As spring arrives in Vermont, along with the historical start of the busy real estate market, we are taking a close look at the 1st quarter results to provide buyers and sellers with valuable insights to make informed decisions. The housing market in northwest Vermont continues to be robust with strong demand and low inventory. Home prices have been increasing steadily, and multiple offers are still common. The median sale price for a single-family home in the region has increased by 8% to $400,000 compared to the same period last year. The number of homes sold declined by 20%, a result of the 15% decrease in new homes listed during the period – not a lack of demand.

The current higher mortgage interest rates have had an impact on the housing market. As interest rates increase, it becomes more expensive for buyers to finance a home purchase, which can reduce demand and slow down sales. However, the impact of higher interest rates can be mitigated by factors such as strong economic growth, high employment rates, and most notably a shortage of available housing inventory. It appears that many buyers have adjusted to the higher mortgage interest rates and are remaining in the market.

Despite these positive trends, the lack of available housing inventory has been a challenge for both buyers and sellers alike. Many homeowners have opted to stay put until they find a new home in the region or out-of-state, which has further constrained the market, leading to higher prices and competition among buyers. It is important to keep in mind that historically, the first quarter of the year tends to be the smallest in terms of listing and real estate sales volume. Statistically, increases and decreases can be affected by a few changes in the product mix. The next 6 months will be a more accurate benchmark of market trends. Overall, the housing market in northwest Vermont is showing no signs of slowing down, and it will be interesting to see how the market continues to evolve throughout the rest of the year.

Our agents have been closely monitoring the current housing market and have observed some interesting trends. Despite the challenges posed by the shortage of available inventory and higher prices, most of our agents (70%) have reported that they have the same or more buyers looking for homes than before. This is a testament to the continued strength of demand in our market areas. However, with so many buyers competing for limited inventory, nearly 90% of offers have been in multiple offer situations, making it increasingly difficult for buyers to secure a property.

Despite this, some buyers are still including inspections and financing contingencies in their offers, indicating that they are taking a more measured approach to their purchases. On the seller side, we have seen that most trust their agent’s advice on current market conditions and are readying their homes for the spring selling season. However, it is worth noting that many sellers are challenged when searching for a new home to move to, whether in Vermont or across the country. Finally, most of our agents report an increase in the pace of the market in the past month, which suggests that buyers and sellers alike need to be ready to act when the right opportunity presents itself.

As we review the real estate market results for 2022 and try to predict the market trends for 2023, one thing remains true – real estate is local. We will attempt to cut through the clutter and the sensational headlines to bring you a local and relevant perspective on real estate in northwest Vermont including Chittenden, Addison, Franklin and Grand Isle Counties.

Single-Family January-December 2022
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$429,900 +11.8%	$501,166 +13.7%	2,125 -20.3%	2,371 -16.8%	25 -34.2%

Condo January-December 2022
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$340,000 +23.6%	$384,461 +21.2%	706 -5.9%	700 -12.9%	21 -27.6%

Multi-Family January-December 2022
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$490,000 +14.0%	$510,618 -5.4%	183 -25%	204 -32.9%	54 -8.5%

Land January-December 2022
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$138,500 +32.2%	$210,407 +23.1%	234 -27.3%	322 -14.1%	154 -35%

In summing up 2022, the story of the year was mortgage interest rates. Mortgage rates ended 2021 and opened 2022 just below 3% on a 30-year fixed rate, conventional loan. By mid-year, rates doubled, eclipsing 7.0%. By December, they had settled at 5.875% to the low 6% range. Inflation was the biggest driver of the rate increases as the Federal Reserve took action and began hiking the Fed Funds rate. Investors are starting to breathe a sigh of relief that the worst inflation may be behind us, but with the Consumer Price Index (CPI) still higher than the Fed prefers, mortgage rates may stay in the high 5% to low 6% range through most of 2023, with a modest adjustment not expected until Q4 of 2023.

What does that mean for buyers interested in purchasing a home? When you find a home that you like, buy it! Interest rates will likely never return to the 3% range we have benefited from over the past few years. The median sale price of homes has been increasing and will continue to do so in 2023 (although not at the rate of the past 3 years). And, inventory remains limited. The saying we keep hearing is “Marry the home, date the rate!” Many buyers are now considering adjustable-rate mortgages (ARMs) to keep their payments a bit lower in the short term. If you commit to a home, you will have the opportunity to refinance if and when mortgage interest rates go down.

The biggest factor impacting the real estate market both locally and nationally is the deficit of inventory. Nationally, this deficit is estimated to be 3.8 million homes. Locally, the Vermont Futures Project has estimated the immediate deficit to be 5000 homes; although this may be underestimating the problem. We are not digging our way out of the problem as we continue to “under build.” New construction plays a critical role; however, it is not meeting demand for a variety of reasons including labor shortages, construction costs, and land development costs. In northwest Vermont, there were double digit declines in the number of closed sales across all property types (residential, multi family, and land) in 2022. These declines do not reflect consumer demand but are a direct result of the lack of properties available for sale. In the past 2 years, the number of single-family homes and condos for sale monthly, has dropped 28%.

During December of 2022, there were only 384 properties available across northwest Vermont – compared to 659 in December of 2020.At the peak of the traditional 2022 real estate season, there were only 694 residential properties for sale with 330 going Under Contract. This calculates to only 2 months’ supply of inventory on the market – continuing a strong seller’s market. A balanced market (not a seller’s nor buyer’s market) would have approximately 4-6 months’ supply of inventory for sale. The number of homes for sale won’t increase significantly in 2023 as many homeowners do not want to lose their current low mortgage rate. Sellers will continue to move for life transitions such as career changes, family status changes, or aging out of a home.

In 2023, sellers should adjust their expectations. With higher interest rates, there still are buyers out there but not as many as 2021 and early 2022. Sellers will still reap the benefits of strong equity positions in their homes. Offers may come with inspection and financing contingencies. Understanding the current market conditions affecting their home, sellers will benefit from working with an experienced Agent who can guide them to closing with the best terms for them.

A stable and uneventful market is what we need over the next few years. Experts are predicting modest price growth in 2023. In northwest Vermont, we estimate a 3 – 5% increase in prices depending on the market segment. Properties priced below $600,000 and properties in move-in condition will continue to be in strong demand. The shock of the recent interest rate increases will give way to acceptance by buyers.

Millennials and Gen Z view real estate to be a means to build wealth as well as contribute to their quality of life. A recent Chase Home Lending survey found that 2 in 5 first time home buyers were living with family in order to save for a home. 58% of those surveyed think they will be ready to buy in the next 12 months. Indeed, home ownership continues to be the American dream.

As we reach the midpoint of 2022, the real estate market is in the initial steps of a transition. The market statistics included in this report reflect transactions closed from January through June 2022. Typical transactions close approximately 45 days from executing a Purchase and Sale contract, which means most of the year-to-date data reflects sales written between November 2021 and mid-May 2022.

Single-Family January-June 2022
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$422,000 +17.2%	$500,855 +20.1%	919 -15.8%	1,266 -16.6%	28 -44%

Condo January-June 2022
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$335,000 +21.8%	$379,809 +21.9%	344 +8.9%	411 -8.7%	23 -32.4%

Multi-Family January-June 2022
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$494,500 +19%	$540,468 +14.6%	106 0%	142 -14.5%	49 -9.3%

Land January-June 2022
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$147,000 +54.7%	$210,463 +46%	127 -27.4%	189 -14.1%	159 -31.2%

2021, the second year of the pandemic, saw record-setting in sales volume and capped two years of record price appreciation in real estate sales. The impact of the pandemic, coupled with historically low mortgage interest rates in the low 3% range, drove sales up and inventory levels to new record lows to start 2022.

Now approaching mid-summer, several factors have changed. Annual inflation, which began in 2021 in the 6% range, increased to 8.6% in May 2022. In reaction, the Federal Reserve raised its benchmark interest rates three-quarters of a percentage point – its most aggressive hike since 1994. The benchmark rate is anticipated to end the year with an upward revision of 1.5 percentage points from the March estimate.

The Feds’ action, worry of high inflation, and some developing fears of recession spurred a rapid rise in mortgage rates spiking to over 6.0% in May, and a 30-year fixed-rate mortgage average of 5.7% as of June 30, 2022. A year ago, at this time, the 30-year fixed rate mortgage averaged 2.98%. Higher interest rates on top of two years of rapid price appreciation have impacted housing affordability and reduced consumers buying power. In addition, inflation is outpacing most workers’ pay raises, making discretionary purchases and saving more challenging.

Based on affordability, housing markets are headed for a reset. Some buyers, considering higher financing costs, have elected to refocus their home search in lower price ranges. Agents report fewer cash offers and more buyers with financing terms or other contingencies. Multiple offers are still common yet may include less competition.

Despite these changes, the year-to-date median sale price increase reported nationally hit a new record of $450,000 in June, a 17% gain from last year. Our local market median sale price of single-family homes was a record $422,000, also a 17% increase from 2021. This accelerated rate is not forecasted to continue at the same pace for the second half of 2022.

However, the ongoing shortage of homes, especially here in Vermont, will keep pressure on prices until inventory slowly increases. Most economists are projecting price appreciation at 8.5% for 2022.

The number of new listings coming on the market in Northwest Vermont continues to lag. There were 16.6% fewer single-family new listings in Chittenden County year to date vs. 2021. Addison, Grand Isle, and Franklin County also saw declines. New construction has not kept up with demand for years, locally or nationally, and the delta of housing needed is just growing.

Several factors are affecting the volume of new listings. Many homeowners have low-interest rate mortgages on their existing properties. Today’s higher rates don’t allow them to replicate that in a new purchase.

Continued low inventory limits choice, and that deters some homeowners. However, some sellers, having delayed their plans through the pandemic, are observing slowing buyer demand and declining housing affordability, prompting them to list their homes before conditions shift further. Homeowners have accrued substantial equity over the past 28 months, and many want to capitalize on that. We anticipate listings to return to more traditional levels gradually.

As previously noted, some buyers adjusted their buying power. A few have temporarily stepped out of the market; however, many are still actively pursuing the right home. The rental market in Vermont, especially in Chittenden County, continues to tighten. In June 2022, Allen, Brooks & Minor reported the Chittenden County apartment vacancy rate at 0.4%. Many renters, impacted by limited availability and rising rents, are increasingly focused on homeownership.

In May and June, inventory has risen nationally, offering buyers more choice. Although Vermont often lags other markets, we anticipate that price appreciation will slow, and properties will begin to come to market at a quicker pace. The number of transactions is moderating and even declining in some categories. In time, Buyers and Sellers will find themselves on more equal footing, a welcome shift after two years of a severely lopsided market throughout the pandemic.

How can Buyers and Sellers best navigate our current conditions? Actively consult your agent and your lender. Some Buyers who anticipate living in their desired home for a shorter period are considering an adjustable-rate mortgage. On the sell side, our Agents work diligently with their clients to prepare homes for market, customize marketing strategies, and target pricing to address the changing conditions. Our Agents, through their skill, knowledge, and kindness, will help you achieve a better financial outcome. Not to mention – with less stress.

Twenty-two months into a global pandemic, the housing market nationally and locally remains very strong. According to the National Association of REALTORS, existing-home sales reached a seasonally adjusted annual rate of 6.12 million – the highest rate in 15 years. The median existing-home sale price grew by $50,200 to $346,900, a 16.9 % appreciation over the prior year. Locally, the median sale price for existing single-family homes increased by 16.3% to $382,750.

Single-Family January-December 2021
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$382,750 +16.3%	$439,658 +15.1%	2,660 +4.4%	2,848 -0.38%	39 -43.5%

Condo January-December 2021
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$275,000 +5.8%	$317,374 +11.1%	749 -8%	803 -1.7%	30 -40%

Multi-Family January-December 2021
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$430,000 +22.9%	$539,588 +21.1%	244 +48.8%	303 +41.6%	60 -31%

Land January-December 2021
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$104,298 -5.1%	$164,864 +3.7%	316 +29%	372 -25%	241 -24.7%

Is now the time to sell? The end of 2021 showed an all-time low inventory of properties for sale, nationally declining 18%. In northwest Vermont, there were only 411 properties of all types (residential, multi-family and land) for sale compared to 4066 sales for the year. Overall, the number of properties coming to market in 2021 remained flat with the prior year, yet the number of closed sales increased modestly. There is pent-up demand for sellers and listings. George Ratiu, of Realtor.com noted, “The pandemic has delayed plans for many Americans, and homeowners looking to move on to the next stage of life are no exception.” That is changing with work-from-home options, lifestyle and space needs, and desire to live closer to family and friends.

As home prices increase, home equity has surged. It is estimated that homeowners with mortgages in the U.S. have seen an equity gain of $57K in the past year. With interest rates still low, these homeowners can consider using that equity to purchase a new home with little change in their payments. Further, many homeowners can refinance their mortgage, taking out the equity to use toward the purchase of an investment or vacation property. With your home being, in most cases, your largest asset, knowing the value in this evolving market is critical. Your agent can provide you with that current information. If your next move is outside Vermont, our agents will connect you with a professional to guide you through your next purchase.

Savvy sellers, following the guidance of their REALTOR, are listing their homes early in 2022 versus waiting for the traditional spring market. Numerous showings and multiple offers persist, with many buyers willing to accommodate a seller’s specific terms, such as agreeing to closing dates a few months out.

Should Buyers stay in the market? Is real estate still a good investment despite rising prices? According to Lawrence Yun, NAR Chief Economist, home prices are in no danger of declining due to tight inventory and strong demand, but he does expect prices to appreciate at a slower pace in 2022. While inflation has risen to 6%, affecting consumer goods like food and fuel, historically, housing has provided stability and even growth during these periods. In 2021, the appreciation of the median price of a home more than doubled (16%) the pace of inflation (6%). Mortgage interest rates will remain at a historically low rate, despite slight increases signaled recently by the Fed.

Yes, buyers should remain in the market rather than stay in their rental. “A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise, and other expenses may creep up, but your monthly housing payment remains the same. That’s certainly not the case if you are renting,” says James Royal, of Bankrate. According to the Chief Economist for Moody’s Analytics, “One place where we’re going to see continued strong acceleration in inflation over the next year or two is on rents.” Locally, in December the Allen, Brooks & Minor Report reported the apartment vacancy rate at .8% and the rent inflation from 2020-2021 at 2.7%. Many landlords maintained rental rates during the pandemic, but increases are likely in 2022 and beyond, anticipated to be 3% or higher.

Still, the question of affordability will continue to be a hot topic in 2022. Home prices will not decline in 2022, but they are predicted to rise at a moderate pace. The average projection from leading economists is a 5.1% increase, equating to a median price of $402,270 in northwest VT. With per capita income up and mortgage rates predicted at near 3.6% by year-end, statistically, there is still capacity for households to absorb higher payments. Whether homeowners want to absorb higher payments is a different story all together. Not all purchasers will be impacted by rising interest rates. As we have been reporting in previous Market Reports, many buyers are paying cash for their homes. This may result from transferred wealth from their boomer parents, stock market and crypto wealth, or equity realized from the sale of a home in another state.

As 2022 begins, the number of well-qualified buyers searching for a home remains very strong. Our agents can assist with introductions to qualified lenders, market information, and strategies to navigate this fast-paced market.

Through the first half of 2021, the real estate market nationally and locally has continued the surge realized during the height of the global pandemic last year. Whether considering a first home purchase, right-sizing a current living situation, or fleeing an urban center for the safety of Vermont and other desirable locales across the country– buyers drove markets to heights never before seen.

Single-Family January-June 2021
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$360,000 +17.1%	$417,102 +21.5%	1086 +23.3%	1517 +9.7%	51 -43.3%

Condo January-June 2021
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$275,000 +10.0%	$311,657 +11.6%	316 +2.6%	448 +11.4%	35 -42%

Multi-Family January-June 2021
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$415,500 +18.7%	$471,501 +0.5%	106 +100.0%	166 +127.4%	54 -43%

Land January-June 2021
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$94,500 -14.1%	$144,002 -17.5%	174 +180.7%	219 -11.7%	233 -23%

Economic factors, such as low mortgage interest rates and a strong stock market, fueled an already undersupplied market driving price up. The National Association of REALTORS (NAR) has reported that the median sale price of existing homes rose 23.4% year over year, to the highest median price on record – $363,300. According NAR Chief Economist, Lawrence Yun, “Supply has modestly improved in recent months due to more housing starts and existing homeowners listing their homes. At a broad level, home prices are in no danger of a decline due to the tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year.”

In Northwest Vermont, the median sale price of single-family homes has increased by 17% during the first half of 2021 to $360,000 – comparable to the national median. The number of properties sold, across all property types, has increased aided; in part by the modest increase in properties coming to market.

Demand continues to rise as Millenials are entering the housing market. It has been said that this group is the largest in population since the Baby Boomer generation. And, many of these buyers are benefitting from a transfer of wealth from their Boomer parents enabling them to pay cash for their home. Those with limited budgets or some first-time buyers wishing to finance their purchase are being met with some challenges. The National Association of REALTORS (NAR) recently reported that first time buyers made up 31% of purchases vs. 35% at the same time last year.

Mortgage interest rates at or below 3.0% on a 30 year fixed rate mortgage – are contributing to the number of buyers entering the market. In addition to changes in the needs and size of their homes, many sellers are capitalizing on their strong equity position and low mortgage rates to move to a larger, newer and usually higher-priced home. Some economists predict a slight increase in mortgage rates by next spring although Fed Chairman, Jerome Powell warns that the predictions should be taken with “a big grain of salt.”

Along with a discussion of the current housing boom comes the concerns of a “bubble bursting” like the collapse that preceded the recession in 2007. Could the housing market crash? “Not likely,” says NAR Economist, Yun. “This housing cycle is fundamentally different without the risky subprime mortgages.” Buyers, while paying a higher price for their homes, are not overstretched – with many paying cash or putting down a considerable deposit. In addition, the supply of homes is considerably lower than during the last cycle. In some areas of the country, builders overbuilt – flooding the market with new homes. New construction slowed down over the past years – resulting in a serious undersupply. Supply chain delays, the surging price of lumber and land, along with labor shortages continue to stress the new construction market – at a time when more affordable homes are needed more than ever.

With the “days on market” (DOM) dropping to just 51 days from list to close, buyers and sellers need to be well prepared to act when the right opportunity presents itself. Now, more than ever, a skilled and experienced REALTOR is needed to assess multiple offers, with complex terms, to help determine those most likely to culminate in a successful closing.

At this time last year, nobody could predict what was in store for our world, our country, or our community in 2020. As we adjusted to the challenges of a global pandemic, the value of “home” took on even greater meaning. Many people began to contemplate whether their current living situation met their evolving needs or desires. Whether considering a first home purchase, right-sizing a current living situation, or fleeing an urban center for the safety of Vermont – buyers drove the market to heights never before seen.

Single-Family January-December 2020
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$328,900 +8.2%	$381,969 +10.6%	2,550 +0.8%	2,860 -12%	69 -5.5%

Condo January-December 2020
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$260,000 +6.1%	$285,607 +3.4%	811 +7.1%	816 -2.5%	50 -23.1%

In addition, economic factors, such as low mortgage interest rates and a strong stock market, fueled demand in an already undersupplied market, driving up prices and putting pressure on affordability.

The National Association of REALTORS (NAR) has reported the share of first-time buyers in the market fell to 31% from 33% the year before – the lowest share since 1987. Buying a primary residence is a financial decision, but also an emotional one that involves many lifestyle factors. For most home buyers, the purchase of a primary residence is one of the largest financial transactions they will make. As inventory moves quickly, some never hitting the open market, now more than ever, Buyers need the help of a real estate professional to help them find the right home and negotiate the terms of a sale (including price) in a highly competitive market.

According to NAR, the most common reason cited for selling a home was the desire to move closer to friends and family. After March (the onset of COVID-19), the second reason was that their home was too small. Approximately 21% of working Americans are currently working from home. That, coupled with homeschooling and the desire for more outdoor or recreational space, larger homes are regaining popularity.

The median sales price of a single-family home has increased by 12% over the past 2 years across the region. Prices and demand vary by county and town, as demonstrated in this report. Various national economists predict prices to rise, on average, 4.1% in 2021. As the urban-to-suburban (and rural) trend continues and “climate change refugees” discover the safety of Vermont, we believe that prices in northwest Vermont will outpace the national average.

The outlook for 2021 is continued strong demand from both in state and out of state buyers. Low mortgage interest rates, currently sub 3%, should also continue through 2021. Even with a small adjustment, rates will remain at historical lows giving buyers additional purchasing power.

Sellers’ length of tenure in the home remained at a high of 10 years; historically, this has been six to seven years. Sellers may find 2021 is an ideal time to sell in order to maximize their solid equity position (unprecedented “house wealth”) and the current buyer demand.

Just 3 months ago, in our Mid-Year 2020 market report, we provided data on the effect that the coronavirus had on real estate in northwest Vermont. The market had heated up after a pause due to the statewide shutdown. Low inventory, low interest rates and pent up demand pushed median prices higher year over year. The height of the real estate market – typically spring – had been pushed into summer. What we could not predict was the sustained demand for Vermont real estate that surged through the 3rd quarter of 2020, showing little sign of letting up.

Single-Family January-September 2020
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$322,500 +5.7%	$368,630 +6%	1,815 -2.8%	2,335 -15%	75 +2.7%

Condo January-September 2020
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$259,950 +6.2%	$282,962 +2.6%	590 +4.8%	670 +2.1%	55 -19.1%

In a recent article in Forbes, George Ratiu, Senior Economist at Realtor.com is quoted “Real estate markets have undergone noticeable shifts since the start of the coronavirus pandemic, in the wake of the lockdowns in March, Americans discovered that existing homes were not adequate for the new work, teach, exercise, cook and live at home reality. Based on realtor.com surveys of consumers, we learned that home shoppers are looking for more space, quieter neighborhoods, home offices, newer kitchens and access to the outdoors, traits which have revived a strong interest in the suburbs and smaller metro areas.” This, coupled with accolades for Vermont’s handling of the virus – quickly flattening the initial wave and slowly opening the economy in a safe way, has contributed to the continued demand in our region.

Our website, HickokandBoardman.com, has seen a 27% increase in users and pageviews year over year. In-state visits to the site increased by 23% while out-of-state visits were up 33%. New York, New Jersey New England states, and California topped the list for out of state visitors searching for Vermont property.

The luxury market (defined for this report as residential property above $850,000) has benefited substantially. In search of a “second primary home,” buyers from out of state – most with ties to Vermont – are snapping up larger homes with amenities that meet their desire for space and a sense of safety. Newly listed homes in this category increased 36%, offering a variety of options for those looking for a lifestyle change.

Nationally, the median price of existing homes pushed to a record high of $310,600 – up 11.4% annually. Locally, the median price has increased nearly 6% to $322,500 for a single-family home. These prices vary by county and town, so it is important to consult with our Realtors for data in your specific area.

In August, mortgage rates set several record lows, which added to the fierce competition for housing. Low rates give buyers additional purchasing power while sellers benefit from increased equity positions in their homes. A “seller’s market” continues, as buyers are often challenged by the reality of multiple offers. Being well prepared, pre-approved and working with a Realtor experienced in navigating the intricacies of crafting purchase offers in this unprecedented market is critical for buyers wanting to achieve their dream of home ownership this year.

Despite the calendar pointing us in the direction of winter, and what used to be a slower period for real estate transactions, Sellers should view this as an extended spring/summer market. Get your home on the market and keep it on the market through the winter and “holiday season.” Virtual showings and video enable buyers to view your home at their convenience. And, COVID guidelines reduce the number of people actually entering your home. Yet, the number of serious buyers in the market remains strong. With guidance from your Realtor, you should be able to negotiate a contract with price and terms that meet your needs still allowing you time to enjoy the holidays with family and plan a move for early 2021.

Single Family
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$296,500 +2.4%	$338,089 +4.2%	374 +6%	529 -12.3%	99 +8.8%

Condo
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$257,600 +8.5%	$283,475 +10.4%	144 +26.3%	184 +19.5%	67 -14.1%

We cannot comment on the 1st quarter results without reflecting on the Coronavirus pandemic that arrived in the midst of it and will continue to impact us for the remainder of 2020. During the recent weeks, we have been reminded about the role HOME plays in our lives. We thank our state officials, health care providers, and all essential workers for the sacrifices and difficult decisions they continue to make to keep our community safe. 

Residential real estate transactions have a longer lead time than most consumer purchases. These transactions close, on average, 45-60 days from the time of contract. Therefore, results in this 1st quarter market report – with sales closed by March 31st – reflect business efforts from the 4th quarter of 2019 through January of this year.

The current public health crisis we find ourselves in is already resulting in an economic crisis. As the residual impact of COVID-19 begins to plateau, the question we are being asked is “what will the impact be on the real estate market?” We don’t have a crystal ball, however, John Burns Real Estate Consulting noted, “Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices) …. the current slowdown is playing out similarly thus far.” As of April 1, 2020, three of the major financial institutions, including Goldman Sachs are calling for a V type recovery. They do reserve the option to change that prediction as things proceed.

The Great Recession of 2008 was driven largely by the housing sector. This is not the case today. In fact, the leading indicators regarding housing were sound at the onset of this necessary pause. Nationally, inventory levels were at a 3-month supply (vs. 8-month supply in 2007); most economists believe a 6-month supply is a balanced market. We have been in a sellers’ market for some time. Price appreciation has been steady and moderate. In addition, the equity position for most home owners is strong.

We cannot predict how long we will be sheltering in place or how deep the impact will be prior to working our way out of this. We do believe that this time, housing is poised to be part of the solution.

“Housing is a foundational element of every person’s well-being. And with nearly a fifth of US gross domestic product rooted in housing-related expenditures, it is also critical to the well-being of our broader economy,” as recently noted by Chris Herbert of the Joint Center for Housing Studies at Harvard University. The fact that the Vermont housing sector enters this current recession underbuilt rather than overbuilt, coupled with continued historic low interest rates, positions housing to help lead our way out of this when the time comes.

In Northwest Vermont, the real estate market during the 1st quarter of 2020 was strong. The number of properties listed for sale continued to increase after years of decline. Buyer demand was strong amidst low interest rates and median prices were steadily growing. Governor Phil Scott issued a Stay At Home order on March 25th which effectively put the brakes on real estate services. Purchase contracts already in process faced some hurdles getting to closing. With safety and public health as a priority, attorneys and lenders adjusted their customary practices and closed real estate sales without parties present – via Power of Attorney. Buyers and Sellers in newer contracts, that had not worked through contingencies such as property inspections, have extended those contract deadlines when possible.

As of April 20th, the Governor is allowing limited in-person activities of no more than two people. Many buyers we have surveyed are remaining in the market. Detailed property photographs and video enable savvy buyers to make offers subject to inspections at such a time that is deemed safe. Our agents are advising clients to work with a local lender for an up to date mortgage pre-approval.

Sellers are using the time at home to prepare for market. Our Marketing Team is working closely with sellers to produce videos and strategically position their homes for optimal viewing by buyers. Our website, HickokandBoardman.com, has been visited by potential buyers across the country- notably from states effected early on by COVID-19. Vermont has long been considered a healthy and safe place to live. Particularly in the aftermath of a crisis, such as the events of 9/11, many residents of larger cities looked to Vermont to begin the next chapter in their lives. Recently, Conde Nast Traveler announced the 2019 Readers’ Choice Awards for the Friendliest Cities in the U.S., ranking Burlington 8th in the country – the only northern city on the list.

While working from home and conducting meetings via apps like Zoom may be new for many, our Agents have been effectively working remotely for several years. From using technology to share and sign contracts, to conducting showings and consultations via Facetime with out-of-state clients – we are well positioned to best serve our clients.

Never more than now, do we appreciate what HOME means to all of us. Stay safe and hold your family and friends close. We appreciate the relationships we share with all of you and together we will work to keep #VermontStrong.

We are All in this Together

Single Family
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$303,500 +3.6%	$345,361 +6.1%	2,530 +11.3%	3248 +4.9%	73 -16.1%

Condo
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$245,000 +6.5%	$276,300 +6.4%	756 -0.1%	835 -6.9%	65 -7.1%

Last year at this time, we provided our recap of 2018 and projections for 2019 based upon analyst predictions for the national and local real estate market. Limited inventory of homes for sale remained the top story. The stock market was volatile; a government shut down impacted the economy and housing market for a short time; mortgage interest rates were projected to reach 5.25% by the end of 2019; and there was talk of a looming recession. Despite those predictions, 2019 was a strong year for real estate. 

While the supply of homes coming on the market remained lower than buyer demand, many parts of our region reflected an increase in inventory. The median sale price grew, enticing home owners to sell in order to maximize their equity. Interest rates dropped in 2019 by .75-1.0% points and will remain low in 2020 – likely somewhere between 3.7% and 3.9%.

With low mortgage rates, low unemployment, and continued wage growth, home buyer activity is expected to remain healthy in 2020.

Millennials, many saddled with heavy student loan debt, have made their mark on the real estate market after many years on the sidelines. At the start of 2019, Millennials accounted for 45% of home buyers. This group is expected to dominate the market again in 2020. Realtor.com expects millennials to make more than 50% of all home purchases in 2020. As home prices increase, Millennials look toward more affordable places to put down roots – namely smaller locales on the outskirts of cities and towns. This has led to the term “hipsturbia communities” – live-work-play communities. Vergennes and Bristol in Addison County & Winooski, Jericho and Hinesburg in Chittenden County are examples of towns with healthy increases in homes sold – perhaps as result of Millennials buyers entering the market.

Baby Boomers, on the other end of the housing spectrum, are staying in their homes longer than ever; 10-13 years on average vs 7 years, historically. These home owners are willing to sell their large family homes but are having trouble finding new home that are right-sized, with easy maintenance so that they can enjoy the lifestyle they have worked so hard to achieve. Their large, family homes may not appeal to energy conscious Millennials also seeking life balance.

New construction projects play a key role in easing the inventory shortage, delivering homes that today’s buyers are looking for and stabilizing pricing. Builders face challenges in land, permit and materials cost as well as shortages in labor which puts the price of new homes in the area well above $400,000. Some communities are challenging new developments, with neighbors raising concerns about the loss of green space and wildlife habitats. The quality of life that draws people to Vermont needs to be carefully balanced with the cost of living in our beautiful state.

2020 will remain a seller’s market in most of the region, with a true buyer’s market not on the immediate horizon. Multiple offers on homes priced near the median for the market and located in sought after towns will continue through the year; however, conditions are favorable for real estate.

Buyers and sellers alike should have these best practices in mind: identify your wants and needs, learn about the market, form reasonable expectations, perform your due diligence, and be prepared to act – with the assistance of a skilled and trusted Realtor.

	Median Sale Price	Average Sale Price	Units Sold	Newly Listed	Days on Market
Single-Family	$305,000 (5.2%)	$347,505 (7.9%)	1860 (7.6%)	2744 (3.4%)	73 (-18%)
Condos	$244,815 (8.7%)	$276,114 (7.9%)	559 (-1.2%)	654 (-12.8%)	68 (-2.9%)
Multi-Family	$320,000 (6.3%)	$384,624 (-6.2%)	101 (-22.9%)	191 (12.4%)	70 (-26.3%)
Land	$100,000 (22.0%)	$134,793 (4.4%)	147 (-2.7%)	379 (-1.6)	290 (16.9%)

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.