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The landscape of Northwest Vermont‘s property market continues to show healthy growth, with prices and sales rising at sustainable rates. Our market is likely to continue to see similar trends within the next year, given growing local and national economies and historically low mortgage rates.

Northwest Vermont’s real estate market ended 2016 on a high note, yet some headwinds bear careful watching in 2017. Home sales rose 3.7% last year, while the average sale price increased 3.8%, representing our region’s recent history of moderate and sustainable growth.

Our market is likely to experience similar trends in 2017, although there is one issue that could constrain Northwest Vermont’s property markets in the coming year: tight inventory levels. Because fewer homeowners are placing their properties on the market and construction of new homes continues to be limited, buyers are faced with fewer choices, especially in the sweet spot of housing in the mid-priced range of $200,000 to $400,000.

According to The National Association of Realtors, in 2016 the median tenure for sellers living in their home was 10 years versus the historical median of 5 to 7 years.

Inventory is particularly tight in many high-demand towns, including Burlington and Winooski, which is pushing some buyers farther afield as they search for affordable homes. The on-hand inventory supply in Chittenden County has dwindled to about 3 months, compared with 10 months in 2015.

Sales for homes priced above $600,000 are starting to pick up, yet inventory in the higher-end segment generally remains plentiful, providing these buyers with more choices.
As a result, the average sale price jumped in each of the four counties tracked by this report. Franklin County, which represents the lowest price point in the region, witnessed the largest increase, with the average sale price rising almost 8%.

Relocating buyers moving to the area continue to buoy our market, thanks to growth in the health care and emerging technology sections. The unemployment rate stood at 3.2 percent in November, giving the state one of the country’s lowest jobless rates.

Several other economic issues may play into our region’s real estate market in the coming year. Foremost among those are interest rates, with the Federal Reserve boosting its key interest rate by 0.25% in December. The Fed has signaled that it plans an additional three rate hikes in 2017. Because those increases will cause mortgage rates to inch up from their historic lows, we believe mortgage rates will be in the 4.75% range by year-end.

Affordability remains an issue that is attracting the attention of lawmakers and advocates, given the difficulty of finding housing for low and middle-income workers. Home prices and rents have increased at an annual rate that has surpassed wage growth, creating a budget crunch for many Vermonters.

The National Low Income Housing Coalition found that a modest two-bedroom apartment in Vermont requires income of almost $44,000, which is out of reach for many in the state. Builders are constructing more rental units, although housing advocates say even more are needed.

As part of a buyer’s due diligence, we recommend that they discuss the potential impact of Act 46, the education governance reform law passed last year that calls for larger school districts. We advise our clients to contact their local lawmakers and school board members to provide more information on how the law could impact local communities, as some are now evaluating school mergers.

Despite inventory concerns, buyers have high expectations for properties. Homes that require significant work or updating may linger on the market. Before listing, we recommend taking care of deferred maintenance and considering “smart home” upgrades such as Nest’s thermostat or lighting features. These touches are especially appealing to millennial buyers, who represent the largest share of first-time homebuyers.

As always, it remains that both sellers and buyers need to reflect on their personal situation. Utilizing the local knowledge within this report and the advice of your agent – you can make an informed decision about your next move.

Chittenden County

• Chittenden County Inventory levels tightened in 2016, as fewer homeowners put their properties on the market.
• Demand from buyers remains strong, especially for mid-priced and affordable homes in desirable neighborhoods.
• The average sale price rose 4% last year, while the number of transactions was little changed due to lower inventory levels.
• The county’s months of on-hand inventory has dwindled to slightly more than three, compared with almost 10 months in January 2015 – creating a Seller’s market in some price points

Franklin County

• Because Franklin County has the lowest average sale price in Northwest Vermont, some homebuyers are turning to the county as they seek more for their money.
• Towns close to I-89, such as Georgia, have particular appeal to buyers, given the easy commute into Chittenden County.
• St. Albans City and St. Albans Town are seeing a resurgence in buyer activity with the revitalization of the City noted as a draw.

Grand Isle County

• Grand Isle County offered more affordable lakefront with rural feel versus parts of Chittenden County.
• A few sales can have a big impact on average sale prices or volume because the property market is relatively small.
• Grand Isle had an 83% Boost in land sales – to 22 parcels sold in 2016.

Addison County

• The average sale price in Addison County rose 4.7% last year yet the number of sold units was little changed.
• Inventory levels have declined, although not quite to the degree seen in Chittenden County.
• With its easy commute into Burlington and surrounding towns, Ferrisburgh proved popular with buyers in 2016.
• Cities like Vergennes and Bristol, with charming character, restaurants, and services also offer affordable opportunities.

The landscape of Northwest Vermont‘s property market continues to show healthy growth, with prices and sales rising at sustainable rates. Our market is likely to continue to see similar trends within the next year, given growing local and national economies and low mortgage rates. 

One issue continues to shape the property market in our region: tight inventory levels. Popular locations such as Burlington are still struggling to meet demand from buyers, with fewer homeowners opting to sell their properties during the first nine months of 2016 than in the previous years.

The tight inventory levels are also boosting home prices, especially for sought-after towns in Chittenden County. As a result, some buyers in the market for homes below $350,000 are extending their searches into neighboring counties with more affordable price points, such as Addison and Franklin counties.

With those dynamics in play, it may be no surprise that the median sale price rose in each of our region’s four counties. Median sale prices increased 3% across the region, while the number of sold units rose a healthy 4%.

Local businesses including transportation broker A.N. Deringer Inc. and institutions such as the University of Vermont Medical Center are continuing to hire. New professionals continue to relocate to our region, spurring demand for both residential properties and rental apartments. The unemployment rate in Vermont stood at 3.3% in August, among the lowest in the country.

Still, several economic concerns may be making consumers feel less confident, at least for the moment. Consumer confidence slipped to a 2-year low in early October, with the pending presidential election prompting some unease among consumers.

Concerns about the strength of the U.S. and international economies have prompted the Federal Reserve to postpone interest rate increases. Borrowers currently are enjoying record-low mortgage rates as a result, although economists believe the Fed will institute rate hikes later this year or in early 2017.

As part of a buyer’s due diligence, we recommend that they discuss the potential impact of Act 46, the education governance reform law passed last year that calls for larger school districts, school board members and local lawmakers. The law is prompting some communities around the state to evaluate school mergers. We find all our local schools are open to providing consumers with the information they need to make good choices.

Despite inventory levels, our Realtors note that buyers are increasingly choosy about properties. Well-priced homes in good condition are selling quickly, but homes that need renovation work may take longer to sell. Before listing, sellers should turn their attention to deferred maintenance and consider “smart home” upgrades such as Nest’s thermostat, which can help make your home stand out.

As always, it remains that both sellers and buyers need to reflect on their personal situation. Utilizing the local knowledge within this report and the advice of your agent – you can make an informed decision about your next move.

Chittenden County

• Tight inventory levels in the region’s most active real estate market are leading to higher home prices while moderating the number of residential sales.
• Through September, the number of home sales was unchanged, while the median sale price rose 4%.
• Buyers on the hunt in the $200,000-300,000 price range may find it challenging, especially as new home listings declined by 8% and 25%, respectively, in Chittenden County and its biggest city, Burlington.
• The property market has about 7 months of available inventory, down from about 9 months a year earlier.

Franklin County

• Home buyers are turning to Franklin County as an alternative to higher-priced Chittenden County and as local employers such as A.N. Deringer ramp up hiring.
• While new listings have declined by 10% from a year earlier, the county has more than 11 months of available inventory.
• The number of sold listings jumped 22% for the first nine months of 2016, while the median sale price rose 7%.
• Properties located near I-89 are selling at higher price points and more quickly than those located in the eastern section of the county.

Grand Isle

• Towns such as South Hero are popular with second-home buyers and professionals who commute into other Vermont counties.
• Grand Isle’s median sale price rose 10%, while the number of sales rose 2%.
• About 20 months of inventory remains available, more than any other county.
• Because Grand Isle is Northwest Vermont’s least active county for real estate transactions, a small number of sales can have a relatively large impact on pricing trends.

Addison County

Homebuyers are turning to Addison County as an alternative to higher-priced Chittenden County. Retirees and professionals are seeking out lakefront and mountain-view properties for second homes.

• While the number of residential sales is unchanged from a year earlier, the median sale price has increased 4%.
• The county has more than 1 year of available inventory, little changed from a year earlier.

After a strong 2015 real estate market in Northwest Vermont, one question on many homeowners’ and buyers’ minds is whether those trends will continue into 2016.

So far, demand and pricing hint toward another solid year, although with a caveat: since the first three months of the year represent the slowest period for our market, the trends may not be clearer until sales pick up during late Spring and Summer.

Nevertheless, demand was strong in the first quarter, with residential transactions jumping by 10 percent. Median sale prices were little changed, which may indicate a shift to lower-priced properties during the winter months.

Many economic trends in our area remain strong. Local businesses such as Dealer.com and institutions such as University of Vermont and Medical Center continue to hire, bringing new professionals to the region. Technology start-ups are thriving and attracting out-of-state mid-career professionals, as well as hiring graduates from colleges such as UVM and Champlain College. Vermont’s unemployment rate was 3.4 percent in February, one of the lowest rates in the country.

The millennial generation, which is on track to become the country’s largest home-buying demographic within the next few years, is emerging as first-time buyers, thanks to record low-interest rates and relatively high rents, which makes home-buying a more attractive alternative. A Coldwell Banker Hickok & Boardman Realty survey last year that found 37% of our clients had just purchased their first home, close to the typical 40% of the market.

Federal Reserve chairwoman Janet Yellen has said the central bank will raise interest rates “cautiously” this year. As a result, mortgage rates remain at near-record lows.

One issue facing our market is affordability, especially within Chittenden County. Buyers are responding to those pressures, with some seeking housing in lower-cost counties such as Franklin County. Within Chittenden County, buyers are most interested in the $250,000 to $350,000 price range, which is especially true for first-time millennial homebuyers. Inventory for reasonably priced housing in Chittenden County remains tight.

Along those lines, Vermont’s housing ranks among the most expensive in the country, although incomes haven’t seen the same gains. That gap between income and housing prices means that many professionals in our region are financially squeezed, which could provide a headwind to the property market.

The impact of Act 46, the education governance reform law passed last year that calls for larger school districts, continues to evolve. We advise homeowners and potential buyers to consider the impact and reach out to their Realtors, local lawmakers and school board members for more information. For instance, some towns are discussing school mergers, which could impact some buyers and sellers.

As always, well-priced homes in good condition tend to see strong demand from buyers. Sellers should consider upgrades to their homes that would make them more attractive to potential buyers, ranging from taking care of deferred maintenance to installing “smart home” technology, such as Nest’s thermostat, to help your property stand out.

Coldwell Banker Hickok & Boardman is forecasting continued steady growth in pricing and sales for 2016. Based on current trends, we believe sales volume may rise about 6 – 8 percent, while pricing could gain about 1% to 2%, or similar to the national forecast from the National Association of Realtors.

As always, it remains that both sellers and buyers need to reflect on their personal situation. Utilizing the local knowledge within this report and the advice of your agent – you can make an informed decision about your next move.

The local economy continues to be healthy, lifted by hiring at employers including Dealer.com and University of Vermont, while industries such as healthcare, technology, and education remain vibrant. Dozens of technology start-ups are hiring and attracting mid-career professionals from out of state, as well as hiring graduates from local colleges such as Champlain College and UVM.

The unemployment rate in Vermont stood at 3.7 percent in November, one of the lowest in the country. Our region’s jobless rate was even lower, with Chittenden County’s unemployment rate reaching a 15-year low of 2.5 percent during the same month.

Millennials are entering the property market, with that generation on track to become the country’s largest home-buying demographic within the next few years, according to real-estate data service Zillow. In Vermont, younger consumers are emerging as first-time buyers, thanks to record low interest rates and relatively high rents, which makes home-buying a more attractive alternative. A Coldwell Banker Hickok & Boardman Realty survey last year found 37% of our clients had just purchased their first home, close to historic rates of 40% for first time buyers.

While the Federal Reserve increased short-term interest rates in December, the central bank has signaled that future rate hikes will be incremental. Mortgage rates may reach between 4.7% to 5% by year-end, compared with below 4% currently, according to the National Association of Realtors. Mortgage rates remain historically low, and our Realtors haven’t noted any impact on housing demand from the Fed’s move.

Housing in the $250,000 to $350,000 range remains the sweet spot in our market, especially given the emergence of first-time millennial homebuyers. Property in the over-$500,000 range, however, can take longer to sell, and inventory in the upper ranges has been growing because of affordability issues. The luxury segment, or properties priced above $800,000, now has a three-year supply of inventory.

While the overall property market remains stable, there are a few issues that bear noting, including rising concern over affordability and property taxes. Vermont’s housing ranks among the most expensive in the country, but incomes in the state remain relatively low, creating a financial crunch for some buyers and property owners. Vermont also has one of the highest property tax burdens in the country, according to the Tax Foundation. Legislators are taking action intended to support quality outcomes for students and make costs more sustainable.

Homebuyers and property owners are advised to keep an eye on Act 46, the education governance reform law passed last year that calls for larger school districts. That could impact some towns in our region, such as Essex, Essex Junction and Westford, which late last year voted to consolidate into one school district. It is important for homebuyers to reach out to school administrators in the town they are considering with any questions. We find public and private schools have always welcomed conversations with perspective families considering a move to the area.

The National Association of Realtors forecasts a median price increase of 4% to 5% and existing home sales rising 1% to 2% in 2016.

 

Locally, Coldwell Banker Hickok & Boardman Realty is forecasting continued steady growth in pricing and sales for 2016, after last year’s 12% gain in residential transactions and 3.4% boost to the region’s median sale price.

As for sellers preparing their home for sale, Coldwell Banker Hickok & Boardman Realty recommends taking care of deferred maintenance issues prior to listing. Also, consider installing new “smart home” technology. These devices are relatively affordable, and consumers are increasingly embracing the technology, according to a joint survey from Coldwell Banker and technology site CNET. On top of that, smart devices such as Nest’s thermostat can help save money by conserving power and water, which will make your home even more appealing to buyers.

As always, it remains that both sellers and buyers need to reflect on their personal situation. Utilizing the local knowledge within this report and the advice of your agent – you can make an informed decision about your next move.

As the fall months arrive, Northwest Vermont’s property market is continuing to witness healthy real estate demand.

With the local economy continuing to grow and interest rates remaining at historically low levels, buyers are returning to the market, including an influx of first-time homebuyers. That has lifted residential home prices between 2% to 3% so far in 2015, which is representative of the type of healthy sales gains that were typical before the recession.

The region’s employment outlook remains healthy, thanks to hiring by local businesses such as Dealer.com and the University of Vermont. In August, the unemployment rate in Vermont stood at 3.6%, one of the lowest in the country. Economists at the Vermont Economic Outlook conference have forecast that 1,500 new jobs will be created in the state this year.

Those trends are bringing first-time homebuyers back into our market, especially as younger professionals seek to gain a foothold in the property market. The millennial generation, which now stands as the largest generational group in America, is expected to become the country’s biggest home buying demographic within the next five years, according to real-estate data service Zillow.

In the Northwest Vermont market, our agents are already seeing younger first-time homebuyers enter the market. A survey earlier this year of Coldwell Banker Hickok & Boardman Realty clients found that 37% had just purchased their first home, which is approaching typical levels of 40% of the market. On a national basis, the percentage of first-time homebuyers stood at 33% last year.

Economists now consider it less likely that the Federal Reserve will start raising interest rates this year, following a disappointing national jobs report in October. If the Fed opts out of boosting rates, it’s likely that mortgage rates will remain near historic lows for several more months.

Despite the solid outlook for our region, the property market is facing a few problematic issues, including affordability and rising property taxes. Residential property in the region remains expensive compared with wages, and increases in taxes have added to buyers’ concerns.

Despite those headwinds, Coldwell Banker Hickok & Boardman Realty is forecasting continued incremental growth in housing prices and steady demand for the remainder of 2015 and into 2016. For the first nine months of this year, the median sale price for residential property increased 2.9%, while the number of unit sales jumped 13.7%. That marks an improvement over 2014, when unit sales and pricing was little changed.

As always, it remains that both sellers and buyers need to reflect on their personal situation. It is increasingly important that you utilize the local knowledge within this report and the advice of your agent – to make an informed decision about your next move.

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Coldwell Banker Hickok & Boardman Realty is forecasting continued incremental growth in housing prices and steady demand for the remainder of 2015 and into 2016.

The resurgent Northwest Vermont real estate market continued to demonstrate healthy pricing and demand during the third quarter, after a strong spring and early summer. Sales jumped 13.7% during the first nine months of 2015, with each of the region’s four counties recording more residential transactions than a year earlier. Across the four counties tracked in this report, the median sale price rose 2.9%.

The type of healthy sales and pricing trends that were typical before the recession are returning to our region in 2015, thanks to a rebounding local economy, historically low interest rates, and a new influx of first-time home buyers.

With growing local businesses such as renewable-energy systems company NRG Systems and MyWebGrocer, the region’s employment outlook remains healthy. Professionals continue to relocate to Northwest Vermont in search of new opportunities. The unemployment rate in Vermont stood at 3.6% in May, or almost two percentage points below the national average for the same month.

In addition to new hiring, our region’s housing market benefited from the positive outcome for IBM’s former Essex Junction semiconductor plant, with GlobalFoundries completing its purchase of the chip business in July. The uncertainty about the plant’s future, which employs about 4,000 workers, was lifted, bringing buyers and sellers back into the market.

One measure of the market’s health is the resurgence of first-time homebuyers. A recent survey of our clients found that 37% had just made their first home purchase. Last year, the percentage of first-time homebuyers on a national basis fell to 33%, from a typical level of 40%. Our market may have room to grow as more renters opt to make their first home purchase in the coming years.

Interest rates remain near historic lows, although the Federal Reserve is expected to begin raising rates incrementally later this year. This will likely push up mortgage rates slightly by the end of 2015, which could bring more buyers into the market as they seek to lock in rates before they rise even higher.

Northwest Vermont is facing some headwinds, however. These include affordability issues, given the region’s relatively expensive housing market and lagging wage growth. Rising property taxes have added to affordability concerns for both mid-range and high-end buyers.

Despite those pressures, housing demand and pricing were strong in the first six months of 2015. Median sale prices rose 5.7% across our region’s four counties, while the number of transactions jumped 13.7%. All four counties recorded higher transaction levels than a year earlier. By comparison, unit sales and home pricing was little changed in 2014.

The National Association of Realtors predicted in its July outlook that national sales of existing homes will rise 6.5% this year, with prices almost gaining 7%. Our view at Coldwell Banker Hickok & Boardman Realty calls for more tempered growth, with a 5% rise in sales volume and moderate price gains.

As always, it remains that both sellers and buyers need to reflect on their personal situation. Utilizing the local knowledge within this report and the advice of your Agent – you can make an informed decision about your next move.

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After an abnormally cold winter that caused some consumers to delay their real estate plans, summer has brought a resurgence in home-buying activity. Sales jumped 13.7% during the first six months of the year, with more residential properties selling in each of the four counties than a year earlier. Across the four counties tracked in this report, the median sales price rose 5.7%.

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Chittenden County

The real estate market in Vermont’s most populous county picked up speed following an already strong 2014. The number of unit sales jumped 18.1%, with Burlington, Winooski and Essex among the towns recording significantly higher activity. Median sales pricing rose 6.2% compared with a year earlier.

Franklin County

After a slow end to 2014, sales and pricing rebounded in Franklin County, which is attractive to some buyers because it offers a lower price point than neighboring Chittenden County. Lower gas prices have made living in the county a more economical option for commuters. Sales volume rose 1.4 percent, while median pricing jumped 5.4%.

Grand Isle County

While sales volume picked up in the first half of the year, median pricing slipped 13.4%. Buyers may have been searching for lower-priced housing, while the county recorded fewer luxury sales than is typical. It’s important to note that as Grand Isle is Northwest Vermont’s least active county for real estate transactions, a small number of sales can have a relatively large impact on pricing trends.

Addison County

An improving economy and lower gas prices helped boost sales in Addison County. Property sales rose 10.8% during the first six months of the year, while the median sale price rose 7.3%. Middlebury, the most active town for sales, saw pricing gains of 3%, while Cornwall and Hancock recorded four luxury sales of properties above the $800,000 mark

At the start of 2015, Vermont’s housing market is benefiting from some positive local and national trends, including historically low mortgage rates and an improving employment market. While there are reasons for optimism, some issues remain as an overhang from 2014, which resulted in an uneven year for Northwest Vermont’s real estate market, with a slowdown during the winter and summer months followed by a pickup in fourth quarter sales.

As the spring of 2015 arrives, Vermont’s housing market is warming up after a first quarter that saw both strong positive trends and some headwinds.

The positive local and national trends include historically low mortgage rates and a stronger employment market. In Vermont, the unemployment rate stood at 3.9% in February, well below the national average of 5.5% for the same month. Employers are also hiring, thanks to expanding businesses such as Dealer.com and Keurig Green Mountain, which are bringing new homebuyers into the Northwest Vermont real estate market.

Our region started 2015 with strong momentum, following a burst in home-buying activity at the end of 2014. Thanks to the resolution of the future of IBM’s former Essex Junction semiconductor plant last fall, home sales once again picked up in Essex and neighboring towns. The plant’s buyer, GlobalFoundries, said it would keep the plant open and had no layoff plans, which eased fears for property buyers and sellers. That helped lift sales in late 2014.

Still, the region faced some pressures in early 2015. Most notably, the unusually cold temperatures in February caused some buyers and sellers to delay their property plans. Our Agents note that they are seeing an uptick in listings and buyer inquiries now that the weather is warming up, which is encouraging owners to put their properties on the market and for buyers to make appointments to see listed homes.

While employers are hiring and the unemployment rate continues to drop, there are some residual effects of the Great Recession that are also creating challenges for homebuyers. Wage growth has continued to lag, putting pressure on consumer spending. During the past two years, home price appreciation has outpaced wage growth in 76% of U.S. housing markets, adding to affordability issues for many buyers, according to housing data company RealtyTrac.

 

After a strong fourth quarter, the first quarter of 2015 was hit by headwinds, thanks to abnormally cold winter weather that delayed some homebuyers from looking and some would-be sellers from listing their properties. With spring arriving, our agents are seeing pent-up demand from buyers, as well as a surge in new listings from sellers. Despite the tough winter weather, sales of residential properties rose in every county except for Grand Isle. Across the four counties tracked in this report, the median sales price slipped 1.8%.

Chittenden County

Coming on the heels of a strong fourth quarter, homebuyers continued to snap up properties during the first three months of 2015. The number of residential property sales rose 12.1%. Pricing gains were muted, with a gain of only 0.8%, as affordable housing continues to be a challenge, especially in Burlington, pushing homebuyers to lower-priced inventory.

Franklin County

The year started off strongly for Franklin County, with sales volume rising 11.1%. Because property sells at lower price points than in neighboring Chittenden County, some first-time buyers are opting to search for homes in Franklin County. It’s also become more economical for commuters to consider property in the county, given the trend toward lower gas prices. Median pricing slipped 3% to $179,500.

Grand Isle County

Sales volume in Grand Isle was little changed, with 16 sales during the first three months compared with 17 a year earlier. Still, median sales pricing slumped 41.2% during the first quarter, as buyers searched for lower-priced homes. It’s important to note that as Grand Isle is Northwest Vermont’s least active county for real estate transactions, a small number of sales can have a relatively large impact on pricing trends.

Addison County

Addison County witnessed a strong first quarter, following a boost in sales at the end of 2014. That lifted property transactions by 36.6% during the first three months of 2015. Our agents noticed pent-up demand for properties in good conditions and locations, which helped boost the median sales price by 18.1%.