Welcome

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Both the U.S. and Vermont real estate markets are exhibiting stability and signs of long-term health. While some local markets are seeing slight price corrections due to rising inventory and more balanced supply/demand dynamics, these shifts are part of a necessary and sustainable market normalization.

Single-Family January-June 2025
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$500,000 | 5.3%	$571,265 | 3.1%	1,005 | 8.9%	1,723 | 20.1%	43 | 4.9%

Condos January-June 2025
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$370,000 | 7.3%	$407,904 | 3.2%	305 | -10.8%	494 | -0.2%	42 | 90.9%

At the national level, housing experts remain optimistic. According to the latest Home Price Expectations Survey from Fannie Mae, over 100 leading economists and analysts predict that home prices will continue to rise over the next five years, averaging 3.3% annual appreciation through 2029. Even the most conservative projections still forecast annual gains of 1.3%, while optimists expect growth closer to 5%. Crucially, no group surveyed anticipates a decline in national home values, thanks to factors such as low foreclosure rates, stable lending, and near-record levels of homeowner equity.

Mortgage rates remain a headwind for many buyers, but the pressure is easing. The average 30-year fixed mortgage rate now stands at 6.72%, down 17 basis points from this time last year. This modest shift has spurred a meaningful rebound in buyer activity: purchase applications are up 25%. As mortgage rates continue a gradual downward trend, buyer confidence appears to be strengthening across many regions. Most consumers now accept that mortgage rates will not return to the historically low 3.0-4.0% range. Learn more about local mortgage trends from Union Bank.

Inventory is also improving nationally. While some seasonal dips have occurred—particularly around the July 4th holiday—the overall trend is upward. New listings are increasing, and price reductions are becoming more common, a sign that sellers are adjusting expectations in response to rising competition and elevated borrowing costs. At the same time, homeowner equity remains a powerful market stabilizer. More than 82% of U.S. homeowners have at least 30% equity, and the national loan-to-value ratio is at a low 46.9%. In Vermont, over 85% of homeowners are equity rich, meaning they have at least 50% equity in their property; making sellers well positioned for their next move. With the majority of homeowners locked into long-term, fixed-rate loans and experiencing wage growth, there’s little pressure to sell under duress.

What are the latest market trends in Vermont real estate?

In Vermont, the market reflects many of these national patterns but also exhibits some unique local dynamics. In northwest and central Vermont, the median sale price for single-family homes has climbed to $500,000, a 5.26% increase from last year. This marks a continuation of an eight-year trend that has seen prices rise nearly 89% since 2017. Sales volume is also up, with 1,005 homes sold so far this year—a 9% increase over 2024. Homes are taking slightly longer to sell, with the average days on market rising to 43, indicating a return to more thoughtful, less hurried decision-making among buyers.

The luxury real estate market across the United States and in Vermont is evolving into a more balanced, strategic space where buyers are discerning, sellers must be thoughtful, and opportunities are still available.

Despite global economic uncertainty, the upper tier of the housing market is proving its resilience—fueled by equity gains, wealth preservation strategies, and shifting generational demand.
The multi-family sector is the standout performer in Vermont, with median sale prices up 26.9% and average sale prices up over 33%. Units sold are up nearly 28%, fueled by investor activity and demand for flexible housing options. Condo prices also rose (up 7.25%), though the number of units sold declined, potentially due to supply limitations or shifting affordability. The land segment saw an 8% decline in median sale price, yet sales still rose by 3.57%, highlighting continued interest in development opportunities.

Buyers in Vermont, like their national counterparts, are gaining more time to explore and negotiate. Inventory is expanding, with new listings for single-family homes up 20%, and sellers are responding by pricing more strategically. The high equity environment and steady wage growth among Vermont homeowners offers a strong financial foundation that helps maintain market confidence.

Footnotes:

1. PrimeMLS, PrimeMLS.com,
2. Fannie Mae, Home Price Expectations Survey (HPES),

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The housing market in 2025 is showing signs of improvement compared to the challenges of 2024 and 2023. While home prices and mortgage rates remain elevated, inventory levels are gradually increasing, offering some hope for buyers who have struggled to find options. Nationally, we expect home sales to grow by about 6% this year, and new construction is helping ease supply constraints in some areas. For Vermont buyers, the market reflects these trends but faces additional challenges, including high property taxes and limited inventory in sought-after towns.

Single-Family January-December 2024
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$499,000 | 8.5%	$576,192 | 8.6%	1,778 | -1.5%	2,265 | 7.0%	34 | 17.2%

Condos January-December 2024
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$375,000 | 4.2%	$422,360 | 4.3%	669 | 19.9%	779 | 20.4%	29 | 31.8%

Affordability and Opportunities for Buyers

In 2024, affordability was one of the biggest hurdles for buyers, as mortgage rates climbed higher than expected and home prices remained near record highs. Many would-be buyers found themselves sidelined, waiting for conditions to improve. If you’ve been holding off on purchasing a home, 2025 could offer better opportunities as rates are projected to stabilize in the 6.3%-6.6% range and the growth in home prices is expected to slow to about 2% nationally. For those ready to make a move, Vermont’s unique appeal and demand for homes mean it’s still a competitive market, especially in areas with strong job growth and outdoor amenities.

In northwest Vermont, including Chittenden, Addison, Franklin, and Grand Isle counties, the median sale price of a single-family home rose by 9% to a high of $499,000. The number of units sold inched up by 1.5% despite 7% more listings coming on the market. Most regions included in this report saw median sale prices increase between 5-8%, consistent with previous years. For perspective, we have included a graph going back to 2017 to illustrate the effects of supply & demand on the prices of single-family homes across northwest and central VT.

The Impact of New Construction

One major trend to watch is the impact of new construction as builders help address inventory shortages. Nationally, newly built homes are expected to account for 30% of available listings this year—double the historic share. In Vermont, where supply remains tight, new developments are crucial for meeting demand. Housing is, rightfully so, a focus for Vermont leaders with proposals for making it “faster, easier, and less expensive” to build housing being put forth this legislative session. It is estimated the state will need more than 41,000 new homes by 2030 while only 25% of that goal is in the process of actually being planned and built.

Seller Advantages & Changing Buyer Preferences

For sellers, the so-called “locked-in” effect might sound familiar. With 75% of U.S. homeowners holding mortgages below 5%, many people are reluctant to sell and trade up to a higher rate. If you’ve been thinking about selling, keep in mind that Vermont’s market remains strong, especially for well-priced homes with modern features. Inventory is still tight, which means less listing competition for your home. This is especially true for well-priced properties in good condition. Life changes, slightly more inventory, and homeowners flush with equity is encouraging more sellers to make a move.

Affordability remains a concern, but there are signs of relief ahead. Slower price increases, wage growth, and creative solutions like co-ownership or multi-family investments are opening new doors for many buyers. About 30% of Millennial renters are now in a position to buy homes, which could drive more activity in the market. For buyers in Vermont, patience and flexibility are key. Exploring financing options, or broadening your search to include nearby communities could make all the difference. In northwest Vermont, the median sale price of condos was $375,000 compared to $499,000 for single family homes. The condo market saw a surge in demand, with significant growth in units sold and new listings coming to market. This may indicate a shift in buyer preference toward more affordable and low-maintenance housing options coupled with an increase in newly constructed units across the region.

A Competitive Yet Promising Market

While the 2025 housing market won’t be without its challenges, there are opportunities for both buyers and sellers. Vermont, in particular, remains a desirable place to live thanks to its quality of life, strong sense of community, and commitment to sustainability. Whether you’re buying your first home, upgrading to meet your family’s needs, or considering selling, staying informed about market trends will help you make the best decisions for your future

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After nearly five years of declining inventory, the number of single-family homes, condos, and multi-family homes rose during the first half of 2024. The first six months of 2024 saw a healthy increase in newly listed properties. Most of the increase in new listings came from April – June. The additional inventory did not temper the increase in the median sale price of single-family homes, which rose nearly 10% during the period. The impact of higher inventory will result in increased sales as the year progresses. However, 2024 (like 2023) will likely be one of the lowest sales years in history as the market continues to rebalance post-pandemic.

Single-Family January-June 2024
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$459,776 +6.9%	$569,738 +10.6%	728 -2.4%	1150 +7.7%	39 +18.2%

Condos January-June 2024
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$350,000 -1.4%	$403,755 -1.8%	286 +11.3%	427 +26.0%	23 +43.8%

MULTI-FAMILY January-JUNE 2024
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$525,000 +3.5%	$572,285 +1.4%	48 -4.0%	107 +40.8%	58 +20.8%

Land January-June 2024
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$150,000 +3.8%	$204,693 +0.2%	79 -14.1%	153 -5.6%	134 +3.1%

Properties that were listed and went pending in May and June are scheduled to close in July and August. The additional inventory provides more options for buyers, slows the pace of the market, and eases the upward pressure on home prices. Home buyers who have stayed in the market have benefitted. The shift in inventory has enabled buyers to include inspection contingencies and request seller concessions, including help with closing costs and repairs.

It is unclear if there will be a Fed rate cut in 2024 – which many experts were hoping for. If mortgage rates finally decline, more buyers may move off the sideline – resulting in a surge in demand that will absorb the gain in inventory. We continue to see many homeowners “locked” into historically low mortgage rates, and they are challenged to move in exchange for a higher rate and possibly a higher-priced home. Mortgage rates fell just under 7% in June. Various experts predict the rates to end the year between 6.5% and 7.0%.

Despite the continuing upward trend in home prices, there is unlikely to be a “housing crash” in 2024. Over the past few decades, new home construction in Vermont has not provided enough new housing to fill the need. “Entry-level” homes are particularly scarce; the low level of inventory, coupled with the financial stability (equity in their homes) of most homeowners, is much different than during the Great Recession.

Millennials will continue entering the home-buying market, maintaining demand this year. Current demographics support continued strong demand through the next several years. Nationally and locally, there needs to be more homes to meet demand. In Vermont, 5,000-6,000 new homes are needed to improve supply over the next five-plus years. Land use regulations and a limited labor force are two challenges in achieving that goal.

Nationally, the median price for existing homes in May rose 5.8% from a year ago to a new record high of $419,300. “Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers,” said Lawrence Yun, chief economist at NAR. We continue to advocate for more new construction at all price points in Vermont.

Remainder of 2024

For Buyers:

• Expect Higher Prices: Home prices are likely to remain high, with potential slight declines in mortgage interest rates.
• Financial Preparation: Save money for a down payment and work on your credit score. Consult with a local lender to learn about mortgage programs so you are ready when the right home is listed.
• Market Understanding: Work with a skilled professional who can provide you with information on the market you are searching. Understand the pricing and inventory in addition to how quickly homes sell (DOM). This enables you to feel comfortable making an offer and moving forward.
• Be Flexible: Be open-minded about your needs and wants. The best time to buy a home is based on your needs. When you find a home that meets your needs and that you can afford, it is the time to buy.

For Sellers:

• Price Predictions: Fannie Mae, Mortgage Banker Association, and the National Association of Realtors predict home prices to rise around 4% over 2023 by year-end.
• Work with Experts: Collaborate with an agent or team with proven results, market knowledge, and a strong marketing presence to best position your home to the broadest pool of buyers.
• Competitive Pricing: Pay close attention to the homes for sale and sold in your neighborhood.
• Recent comparable sales will help determine the sale price for your home. Some price points are not as competitive as others, so be prepared to accept some contingencies and make some concessions.
• Maintenance and Appeal: Ensure your home is well-maintained with lots of curb appeal. Buyers are looking for homes that need few, if any, improvements since they are already under pressure with rising prices, mortgage interest rates, and property taxes.

Looking back at 2023, it is evident that the year was characterized by dwindling inventory and escalating mortgage interest rates, leading to decreased affordability amid a continuing uptrend in median sale prices both regionally and nationally. Notably, the inventory of available homes in 2023 was half compared to 2019 levels, with cash transactions accounting for 30% of total transactions, up from 20% pre-pandemic. Economists, contemplating the outlook for 2024, foresee a probable adjustment in interest rates by year’s end. The question is: Will these adjustments suffice in prompting more activity among sellers and buyers, motivating them to transition from inertia to action in pursuit of significant lifestyle changes or long-postponed decisions? Residential real estate sales are largely influenced by life events such as marriages, divorces, births, deaths, or relocations.

Single-Family January-December 2023
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$459,776 +6.9%	$530,366 +5.8%	1,802 -15.3%	2116 -10.8%	29 +16.0%

Condos January-December 2023
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$359,900 +5.9%	$404,973 +5.2%	557 -21.2%	647 -7.7%	22 +4.8%

Multi-Family January-December 2023
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$572,934 + 12.2%	$484,852 -1.1%	118 -35.5%	184 -10.2%	49 -9.3%

Land January-December 2023
Median Sale Price:	Average Sale Price:	Units Sold:	Newly Listed:	Days on Market:
$139,000 +0.4%	$210,078 -0.2%	185 -20.9%	301 -6.8%	118 -23.4%

Nationally, existing home sales dropped by 18%, hitting the lowest point since 1995. On the other hand, new home sales saw a slight increase of 4.5% across the country. In Vermont, the demand for new homes far exceeds the supply, with estimates suggesting a need for approximately 6000 new homes annually, compared to the current production which falls significantly short of this figure. Challenges such as higher interest rates, labor shortages, and the complexities of the permit process hinder builders’ efforts. Notably, the top priorities for this year’s legislature revolve around safety, security, and housing. Vermont’s slow labor market growth is largely attributed to the housing shortage and affordability issues, as potential workers face difficulties relocating due to inadequate housing options.

In northwest Vermont, including counties like Chittenden, Addison, Franklin, and Grand Isle, the median sale price of single-family homes rose by nearly 7%, while the number of units sold dropped by 15%. The imbalance between supply and demand was further exacerbated by an 11% decrease in homes entering the market, pushing the median sale price to $459,776 in the area with significant variations at the city, town, and county levels. Over the past four years, median home prices have seen a 40% increase, and moderate increases are expected to continue over the next three to five years. This underscores the importance for prospective buyers to act rather than wait for price corrections or mortgage rate declines. Given the significant appreciation in home values, homeowners are advised to consider capital gains implications when deciding whether to stay put or capitalize on their equity. However, the current capital gains exemption, unchanged for 25 years, is increasingly viewed as outdated, prompting calls for adjustments to reflect inflationary trends.

Forecasts from Lawrence Yun, the Chief Economist for National Association of Realtors, suggest a potential 14% increase in home sales this year, accompanied by modest price appreciation estimates ranging between 2.5% to 5%. Despite some buyers anticipating price declines, local market conditions driven by supply-demand imbalances do not support such expectations. Various economists and institutions, including the Mortgage Bankers Association and Fannie Mae, predict mortgage rates hovering around 6% to 6.5%, a level deemed acceptable by both buyers and sellers, capable of stimulating market activity. Additionally, external factors such as the presidential election year, Federal Reserve rate adjustments, and global geopolitical developments could exert further influence on the real estate landscape in 2024.

A downward trajectory in the marketplace could incentivize homeowners with exceptionally low rates to consider selling, thereby alleviating the inventory crunch experienced in 2023. Dubbed the “lockdown effect,” many sellers have hesitated to trade their current interest rates for higher terms, but as rates gradually recede and life circumstances evolve, this grip will loosen and market activity is expected to rebound. We will continue to monitor mortgage rates throughout 2024.

In summary, amidst the complex interplay of economic indicators and socio-political factors, consumer sentiment is on the upswing, with prospective buyers encouraged to seize opportunities that align with their present and foreseeable needs while remaining within their financial means.

Long term, the solution must include more and larger development to meet demand. Reputable and well-established builders are working hard to roll out new projects and additional phases of established communities. Extensive permitting and labor shortages are impacting cost, ultimately absorbed by purchasers. More action by state and local officials is needed to satisfy demand, address affordability, and positively impact our aging housing stock.

To best navigate this market successfully, it is crucial for both buyers and sellers to be well-informed about the current conditions and trends and adapt their strategies accordingly. Our well-skilled and experienced Agents can provide you with the guidance you need to make your next move.

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.