Prices Remain Stable Despite New Buyers

Addison County Real Estate Trends
Enjoy beautiful Lake Champlain views from every room in this year-round home. Ferrisburgh MLS#4474309
County Averages   
Median Sale Price:Units Sold:Newly Listed:Days on Market:
$215,000 (+0.7%)145 (+8.2%)378 (-5%)155

Addison County Home Sale Prices

Addison County is showing an increased demand and an influx of new buyers, some of whom have expanded their property searches within the county because of tight inventory levels in neighboring Chittenden County.

As a result, demand remains robust in the first half of 2016, with the number of residential transactions rising 8.2%. Of the four counties tracked by this report, Addison County reported the smallest increase in median sale price, with a rise of 0.7%, indicating that some buyers are opting for lower-priced inventory.

The boost in activity has helped to absorb excess inventory in Addison County, which currently has about 10 months of available inventory compared with a recent high of more than 15 months in February.

With gas prices remaining below $2.50 a gallon, the county is more affordable for professionals who commute within the county or into Chittenden County than before 2014, when prices at the pump were more than $3 a gallon.


Addison County Homes Sales by Town

Demand For Ferrisburgh

Ferrisburgh witnessed an 82 percent jump in residential sales, although buyers sought out slightly lower-priced inventory, with the median sale price slipping 7.3% to $255,000. With 20 sales so far this year, Ferrisburgh is the county’s second-busiest market after Middlebury.

Mixed Trends in Middlebury

Middlebury remains the largest market for real estate transactions, although the number of transactions slipped 20.7% to 23 sales in the first six months. Pricing was relatively steady, with a small decline of 2.7%, which may indicate that buyers are seeking out affordable properties.

Local Employers are Hiring

Middlebury College and other local employers such as Otter Creek Brewing are adding staff, helping to bring more buyers into the Addison County market. The unemployment rate in the county stands at 3.5%.

Land Demand

Sales of land jumped by 44%, driven by professionals and retirees interested in building their own custom homes on property in the county. The median sale price for land rose 17% to $95,000

The luxury market is typically a draw for buyers seeking waterfront properties or mountain estates. The county recorded four luxury sales of more than $800,000 in the first six months of the year, out of the region’s 18 sales of homes in the over-$800,000 range. That puts Addison County on track to match the 2015’s luxury market, when buyers bought seven properties above $800,000 within the county.

New Construction Expected to Provide Some Relief for Renters

Chittenden County’s Rental Market


The rental market in Northwest Vermont remains tight, although there’s some good news on the horizon for renters: with an influx of newly constructed apartments, rental prices are showing signs of stabilizing, a trend that is expected to continue.

Vermont Rental Market 2016The Vacancy Rate Is Easing

The vacancy rate stood at 2.1% in June, significantly higher than the rates seen in 2010-2014, when it averaged about 1.4%, according to real estate consulting firm Allen & Brooks. With more than 3,000 new apartments being constructed across Chittenden County, there will be more options for renters, including some new affordable housing and age-restricted rentals. Almost 600 new apartments will open in 2016 alone, Allen & Brooks forecasts.

More Choices for Renters

The burst of new construction is providing more choices to renters, such as whether to opt for a newly constructed apartment or an older home in neighborhoods such as Burlington’s Old North End, according to our Agents. Newer buildings may be slightly more expensive, but also can include some amenities, such as covered parking, that older properties do not.

Stabilizing Rents

Monthly rents are stabilizing, thanks to the slightly higher vacancy rates and newly constructed apartment buildings. The rate of increases should moderate in the near future, after several years of rates increasing at more than 2 percent annually, Allen & Brooks notes.

Plan for a Two-Month Search Before a Move

Renters should plan to begin their search for a new apartment about 45 days to 60 days before they move, according to our Agents. Finding a rental can be competitive, even with the higher vacancy rate.

Revitalized Neighborhoods

Revitalization is bringing new residents to older neighborhoods and towns, such as Winooski and the Old North End of Burlington. Winooski has earned a reputation as “The Brooklyn of Vermont” because of its excellent new restaurants and more affordable rents than neighboring Burlington. Both areas are seeing new construction, such as the
237 Pearl Street Apartments in the Old North End and Riverrun in Winooski.


Chittenden County’s Rental Market Insights

  • The county’s vacancy rate is 2.1%, significantly below the national average of 4.5%.
  • Rents have increased by more than 2% annually since 2011.

 

Low Vacancy Rate Continues to Drive Investment Property Sales

Vermont Multi-Family Real Estate Trends
Well maintained Triplex in lovely Burlington neighborhood. MLS#4501015 | Many updates in this Duplex with three bedrooms on each side. Burlington. MLS#4497413
Multi-Family Averages   
Median Sale Price:Units Sold:Newly Listed:Days on Market:
$360,000 (+16.1%)63 (21.1%)113 (-9.6%)79

The multi-family property market in Northwest Vermont continued to show robust trends in the first half of 2016, thanks to the region’s low vacancy rate and growing professional population. The multi-family market is continuing to draw out-of-state, international, and local investors because of these trends, according to our Agents. 

Across the four counties, 63 multi-family properties changed hands during the first six months of the year, an increase of 21.1%. The median sales price rose 16.1% percent to $360,000. As with the residential market, tight inventory remains an issue for the market, with demand exceeding supply. Because of these dynamics, well-priced, well-located properties are selling quickly.

Inventory remains especially tight in Burlington and Winooski, with the latter experiencing a surge in interest from renters because of its revitalized downtown area, which has brought new restaurants and shops to the former mill town.

With demand from buyers remaining far ahead of supply, our Agents note that owners of multi-family properties may want to consider listing to take advantage of the market dynamics.

The following are details about trends impacting the multi-family market:

VT Multi-Family Real Estate Trends


Multi-Family Home SalesTight Inventory in Winooski and Burlington

A lack of inventory continues to be an issue in both Winooski and Burlington. The number of newly listed properties slipped 36% in Winooski and more than 10% in Burlington.

A Slightly Higher Vacancy Rate

The rental market’s vacancy rate stood at 2.1% in Chittenden County in June, according to real estate consultancy Allen & Brooks. That’s significantly higher than the rates seen in 2010-2014, when it averaged about 1.4%. While rents are stabilizing as a result, that hasn’t impacted demand or pricing for multi-family properties as the region’s vacancy rates are substantially lower than the roughly 4.5% national rate.

New Apartment Construction

Builders are responding to demand, with more than 600 new apartment units slated to be built this year, according to Allen & Brooks. Although newly constructed units tend to have higher rents than properties in existing properties, the added inventory may stabilize rents across the region.

Demand for rental housing is likely to remain strong, partly because median household incomes still haven’t caught up with their 2008 peak. At the same time, single-family homes have appreciated in value, making them more expensive for first-time homebuyers. Younger buyers with student loans may end up in the rental market for more years than older generations because of their loan repayments. Allen & Brooks is also forecasting increasing demand from seniors for rental housing, as many decide to scale down and sell their single-family homes.

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Inventory Level in Midrange Market Creates Opportunity for Sellers, Challenges for Buyers

Chittenden County Real Estate Market
2 bedroom, 2 bath Ranch has a window clad hot tub room with cathedral ceiling. South Burlington MLS#4500186
County Averages   
Median Sale Price:Units Sold:Newly Listed:Days on Market:
$278,000 (+4.7%)883 (-0.08%)1,418 (-9.3%)78

After a strong 2015, Chittenden County is experiencing another healthy year, although with some headwinds thanks to tight inventory levels. With fewer homeowners listing their properties for sale, buyers are increasingly bidding up properties, especially in the “sweet spot” of homes priced between $250,000 to $400,000. 

Inventory between $250,000 and $400,00 is particularly tight, however, prompting some buyers to search deeper into the available inventory for homes that may need some work. In some cases, buyers are opting to expand their searches into neighboring counties with more affordable housing stock. Buyers are enjoying one bright point, however: the cost of borrowing is extremely low, thanks to continued downward pressure on mortgage rates.

Essex and South Burlington were the most active towns during the first half of the year, with 166 and 141 transactions, respectively. Burlington, the third-most active town with 125 sales, has suffered from extremely tight inventory levels. New listings in Burlington have dropped by about one-third during the first six months of the year, pushing some buyers to search a wider geographic area. The median sale price in Burlington gained 3.5% during the first six months of 2016. Because of high demand for Burlington properties, some homeowners are opting to sell their properties through private transactions.

First-time Homebuyers

Young professionals are increasingly interested in making their first home purchase, thanks to low mortgage rates that can make monthly payments lower than renting a comparable home. The most in-demand properties are in the sweet spot of $250,000 to $400,000, although inventory remains extremely tight in that range.

More Flexibility in the Over-$500,000 Market

While buyers are also interested in homes with a slightly higher price point, there is more availability with inventory priced above $500,000. Towns such as Shelburne and Charlotte, where the median sales price is almost $500,000, are witnessing strong demand so far this year.

Looking Further Afield

Given tight inventory in Burlington, some buyers are pushing their searches into towns including Williston and Richmond, which also saw an uptick in demand this year.

A Growing Economy

Large employers such as University of Vermont and tech companies such as MyWebGrocer are hiring, helping bring new homebuyers into the market.


Chittenden County Homes Sales by Town

The multi-family market recorded 51 sales in the first half of 2016, an increase of 27.5% compared with a year earlier. For a longer discussion of trends in this market, please see our multi-family section in the Mid-Year Market Report.

Demand rose for land sales, with 26 sales in the first half of the year, an increase of 30%. The median sale price slipped 2.5% to $148,750, which may reflect buyers seeking slightly lower-priced property. As in other counties, professionals and retirees are seeking land where they can custom-build new homes.

An Affordable Alternative to Chittenden County

Franklin County Real Estate
Warm & inviting home with arge family room. St. Albans Town MLS#4486817
County Averages   
Median Sale Price:Units Sold:Newly Listed:Days on Market:
$202,000 (+3.1%)284 (+28.50%)
530 (-9%)105

Franklin County Residential Sale Price rose 3.1%Buyers are turning to Franklin County to search for residential properties in the sub-$250,000 range, especially as inventory has tightened considerably in neighboring Chittenden County. Gas prices remain stable and below $2.50 a gallon, which makes the county a more affordable option for professionals who commute to Chittenden County or other locations.

The first six months of 2016 continued to demonstrate the historical split in pricing and demand for the eastern and western sides of the county. Towns on the western side are witnessing stronger demand and pricing, partly because they are closer to 1-89 and more attractive to commuters. Eastern towns such as Richford tend to record lower median sale prices.

Because of Chittenden County’s tight market, some buyers are looking deeper into the available housing stock within Franklin County, helping to absorb some of the county’s excess inventory. The market currently carries about 7 months of available inventory, or about half the levels seen in January. Because of those trends, prices are rising, with some buyers considering homes that may have been on the market for a while or are in need of upgrades.

Median Sale Prices are Rising

With tighter inventory in both Franklin and Chittenden counties, buyers are pushing up prices. The median sale price in Franklin County rose 3.1% to $202,000, marking a rare instance of the county’s median sale price tipping above the $200,000 mark.

Affordability Remains a Draw

Even with the higher median sale price, Franklin County remains the most affordable county within Northwest Vermont. Buyers who are priced out of Chittenden County, where it can be difficult to find homes in the sub-$250,000 range, often turn to Franklin as an affordable option.

Stronger Economy

Companies such as Superior Technical Ceramics, which makes specialty ceramics for industrial use, and pharmaceutical firm Mylan Technologies are hiring, helping push the unemployment rate down to 3.5%.


Franklin County Homes Sales by Town

Land sales doubled during the first half of the year, rising to 22 transactions from 11 a year earlier. The median sale price rose more than 22 percent to $75,500. With the stronger economy and tight inventory levels, some professionals and retirees are opting to buy land parcels and custom-build homes.

The multi-family market was little changed, with 10 sales in the first half the year, compared with 11 a year earlier. The median sale price slipped 25% to $206,625.

 

 

Healthy Sales in the Midrange Price Market, Luxury Homes Struggle

Grand Isle County Real Estate Trends
Butler Island Seasonal cottage in North Hero. MLS#4448052
County Averages   
Median Sale Price:Units Sold:Newly Listed:Days on Market:
$221,250 (5.4%)46 (-2.1%)189 (+3.8%)224

Grand Isle Homes PricesGrand Isle’s property market tends to focus on two segments: the high-end luxury market and the mid-priced tier. For the first six months of 2016, sales were focused on the latter segment, with the median sale price rising 5.4% to $221,250.  

That places Grand Isle’s property market in the middle of the price range for Northwest Vermont, offering more value than in neighboring Chittenden County but slightly more expensive than homes in either Franklin or Addison counties.

The number of transactions fell slightly, slipping 2.1% to 46 sales. Because Grand Isle is the smallest real estate market in Northwest Vermont, just one or two transactions may have a large impact on the county’s pricing and demand trends. There are currently 17 months of available inventory in Grand Isle, more than in neighboring counties – yet down from more than 38 months of unsold inventory in April.


Southern Zone

The most in-demand towns are located in the southern part of the county, since their proximity to 1-89 are attractive to buyers who work in neighboring counties. For the first six months of 2016, the most active market has been the town of Grand Isle, with 18 sales.

One Luxury Sale

Grand Isle’s luxury market tends to pick up during the summer months. So far this year, the county has recorded one luxury sale, an $815,000 waterfront property with views of the islands and Green Mountains.

A Small Market

A few sales can have a big impact on median sale prices or volume because the property market is relatively small.

 

Twelve land sales were recorded in the first half of the year, or four times the three land sales completed a year earlier. The median sale price rose 22% to $73,333. Some buyers are opting to purchase lots and construct custom-built homes, rather than searching for pre-existing inventory.

Grand Isle 2016 Homes Sales by Town

Early Spring 2016

Vermont Real Estate Market Report Spring 2016
Vermont Real Estate Sale Price 2016

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 Realty 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.

VT Real Estate Trends 2016

Multi-Family Market

Multi-Family real Estate Market 2016
Turn-key 3 unit investment property. MLS#4480526    |   Renovated Burlington 4 + Unit! MLS#4442453
Multi-Family Averages   
Median Sale Price:Units Sold:Newly Listed:Days on Market:
$351,000 (+12.3%)29 (45%)39 (-30.4%)84

With an extremely low vacancy rate and a growing and diverse professional population, Northwestern Vermont continues to draw local and out-of-state investors to its multi-family property market.

Across the four counties, the number of sales jumped 45 percent, while the median sales price gained 12.3 percent to $351,000 during the first quarter. Our agents are finding that well-priced, well-located properties are selling quickly, especially given the tight inventory for these homes.

Inventory remains an issue for the multi-family market, given that there’s more demand from buyers than can currently be met by sellers, especially in Burlington and neighboring Winooski. Given the interest from investors, our agents note that it’s an excellent time to list multi-family properties for sale.

The following are details about trends impacting the multi-family market:

2016 Multi-Family Real Estate

 


Winooski Remains Attractive

Investors continue to search for multi-family properties in this revitalized mill town, thanks to demand from professionals who like the atmosphere and lower costs than Burlington. Multi-family sales in Winooski rose to 5 transactions in the first quarter compared with 3 a year ago. A lack of inventory continues to be an issue.

Higher Vacancy Rate

The rental market’s vacancy rate has seen some easing in recent months due to new apartment building construction. In December the rate stood at about 3 percent in Chittenden County, or almost double the rate from a year earlier. Our Realtors note that it hasn’t impacted pricing for multi-family properties, although rents are stabilizing.

Burlington Shifts to Lower Price Points

In the city of Burlington, multi-family property sales jumped 71 percent to 12 transactions in the first quarter, the median sale price slipped by about one-fifth to $372,500. Investors are searching for smaller multi-family properties, which is shifting the price-point lower.

 

About 3,500 new units are either planned or have been built recently in Chittenden County, which may bring the vacancy rate higher and continue to stabilize rents, according to Allen & Brooks’ December report.
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Chittenden County

Chittenden County Real Estate Market 2016
Feels like living in the country yet minutes from great shopping, restaurants & Village center. Williston. MLS#4468539
County Averages   
Median Sale Price:Units Sold:Newly Listed:Days on Market:
$250,000 (-1.9%)315 (+2.3%)561 (-2.6%)88

While Chittenden County is the most active real estate market in Northwest Vermont, the first quarter represents the slowest season for residential sales. Coming off of a strong 2015, the first three months of 2016 saw some mixed trends, with demand continuing to rise but with buyers looking for slightly lower-priced housing.

Chitteden County Home Sales by Unit 2016

Above-average temperatures last fall and this winter helped bring buyers out to viewings and to extend their home searches. Our Realtors are noting that the sweet spot for buyers is the $250,000 to $350,000 price range, although inventory in that segment remains tight.

Burlington and South Burlington were the most active towns during the first quarter, with 50 and 52 transactions, respectively, or almost one-third of the county’s sales. Still, the number of sales and median pricing slipped slightly in Burlington, which could be due to affordability issues as well as deferred maintenance, which provides buyers with more bargaining power.

A number of factors helped lift the county’s real estate transactions and median pricing.

Chittnden County Sale Prices 2016The Mid-Priced Sweet Spot

Thanks to the reemergence of first-time homebuyers, the sweet spot is housing between $250,000 to $350,000, since monthly mortgage payments can be significantly lower than rent for comparable housing. Still, inventory in this segment can be tight, leading to competition for desirable properties.

Buyers are Returning to the Over $500,000 Segment

With a growing professional class in Chittenden County and continuing low mortgage rates, buyers are once again returning to the over-$500,000 segment. Still, sales can take longer to close in this price range, given that there’s more inventory available.

Beyond Burlington

While Burlington remains a popular location, buyers are also setting their sights further abroad. Towns such as Williston, Essex, and Shelburne recorded strong demand in the first quarter.

A Vibrant Economy

Tech start ups such as the online reading-assessment service Reading Plus and medical technology equipment maker BioTek – both located in Winooski — are among those firms creating a vibrant and healthy local economy.


Chittenden County Snapshot

The multi-family market recorded 21 sales in the first quarter, an increase of 61.5% compared with a year earlier. For a longer discussion of trends in this market, please see our multi-family section in the Mid-Year Market Report.

Seven land parcels were sold in Chittenden County during the first three months of 2016, compared with 11 transactions a year earlier. The median sale price jumped 92% to $250,000. As in other counties, professionals and retirees are seeking land where they can custom-build new homes.

Franklin County

Year round living on Lake Champlain. MLS#4480738
County Averages   
Median Sale Price:Units Sold:Newly Listed:Days on Market:
$189,000 (+5.6%)125 (+37.4%)220 (+11%)110

Franklin County Real Estate Sale Price 2016Franklin County is benefiting from a revitalized downtown and demand for buyers seeing homes in the sub-$200,000 price range, which has made the county more affordable for professionals who commute to Chittenden County or other locations.

Still, demand and pricing differs considerably between the eastern and western sides of the county. Our Realtors have found that towns in the western section tend to draw more buyers and interest, thanks to their proximity to I-89. Towns in the eastern half of the county tend to see lower demand and median prices.

Affordability is a Big Draw

Because Franklin County’s median sale price is the lowest in Northwest Vermont, it tends to draw buyers who are looking to buy more with their money. Finding homes in the sub-$250,000 range can sometimes be challenging in nearby Chittenden County.

Lower Gas Prices

As noted above, towns closer to 1-89 have witnessed stronger pricing trends and demand, such as Georgia, where the median sale price rose 18.9% in the first quarter.  Gas prices slipped below $2 a gallon in the first quarter, which helps entice some buyers to look for property in the county.

Employers Are Hiring

Institutions such as Northwestern Medical Center and companies such as shipping firm A.N. Deringer are hiring, bringing more professionals to the county.


Franklin County Snapshots

Land sales more than tripled during the first three months of 2016, jumping to 13 transactions from 3 a year ago. The median sale price gained more than 10 percent to $73,000. Some professionals and retirees are buying land in the county to custom-build their own homes.

The multi-family market was unchanged with six sales in the first quarter. Investors sought lower-priced properties, bringing the median sale price down 41 percent to $181,500.