The real estate market is booming in Addison County, achieving the highest median sale price for a single-family home since our report began six years ago. The number of homes sold increased by 12% – nearly triple the increase across the region. The pace of the market accelerated as well with the average time from listing to close at only 2 months – down from 3 months mid-year. Middlebury, Bristol, Vergennes, and Ferrisburgh topped the county for the most homes sold in 2021, followed closely by Monkton, Orwell, and New Haven. The highest median sale prices were reported in Cornwall, Addison, and Lincoln. Accessibility to Lake Champlain, the mountains, and an easy commute to the greater Burlington area for employment are motivators for buyers. Farm to table dining options, art galleries, and a more rural landscape enhance the quintessential Vermont life experience.
In northwest Vermont, the strong investor market is driven by low-interest mortgage rates and solid equity positions in existing properties for owners. The number of investment properties coming on the market grew by more than 40% fueling a 49% increase in the number of units sold. Although the median price rose to $430,000, investment properties offer affordable opportunities for owners who plan to occupy the property and offset their housing costs with rental income.
The rental vacancy rate has been reported at 0.8%, and while rental rates increased only modestly during the pandemic, rates are projected to go up locally and nationally in 2022 and beyond. Many would-be home buyers are opting to stay put in their rentals after unsuccessfully writing multiple offers for purchases.
Some would be first time buyers, struggling with price appreciation and the competitive market, are staying put in rentals providing demand for area landlords. With local businesses hiring more new employees, the demand on the rental market doesn’t look to ease up. Price appreciation, demand for rentals, and a lack of new rental properties coming to market will continue to add to the desirability of owning multi-family properties.
Land sales in northwest Vermont increased by 29% in 2021 to 316 parcels sold. Limited inventory of existing homes coupled with buyer preferences for amenities, energy-efficiency, and newly envisioned living spaces contributed to this solid growth. While the median sale price dropped slightly across the region, land prices in Chittenden County grew.
Supply chain disruptions, lumber prices, and labor shortages affected housing starts nationally. Vermont is no different. The builders we work with are working diligently to control pricing, manage construction, and deliver beautiful homes timely. Buyers who can manage longer turnaround times and the higher costs associated with building will be able to customize their dream home while benefitting from low mortgage rates, energy-efficient construction, and often much lower maintenance costs.
Even with a slight increase in the vacancy rate, the rental market in Chittenden County continues to be tight. The pool of renters has very limited inventory to choose from, which means some units are highly sought after and extremely competitive. Many leasing/property managers have a waiting list for available units.
The 532 new units projected to open in 2023 is 53% higher than the average Chittenden County growth over the past 3 years, and 82% higher than the long-term average since 2000. Of the 532 expected units, 57% (304) are already completed as of June. For comparison, the total of new units constructed in 2022 was 291, a promising indicator.
Of the 532 units expected to open, 206 (39%) are projected to open in South Burlington. Essex/Essex Junction is expecting 96 (18%) units, followed by Colchester 78 (15%), and Burlington 72 (13%). The rest are opening in Shelburne, Williston, and Milton. Most of the new units are identified as market rate units with a growth in “Affordable, Family” units over the prior year.
The apartment vacancy rate in Chittenden County increased slightly for the first time since the June 2020
report to 1%. For comparison, the national average is just under 5%.
Due to limited inventory, the average monthly rent has continued to increase, with the average cost of a
2-bedroom being reported at just over $1,600 a month as of the latest rent survey* with a more typical cost hovering around $2,000 per month.
As with the residential housing market, the need to act quickly is now more important than ever. Landlords do not hold apartments, the first person to provide the necessary deposit and signed lease are the ones who secure the apartment. Unfortunately, renters often must push their wants to the side and focus on their needs to find a rental option within the timeframe they require.
Source: Allen, Brooks, & Minor Report, December 2021
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.
The demand for homes in Chittenden County continued through the first half of 2021, increasing by more than 13% over 2020. Navigating the challenges of the global pandemic in 2020, many contemplated their living and employment situations; either relocating, right-sizing, or renovating their home. A modest improvement in the number of properties listed for sale this year (+8%) has not proven enough to satisfy the number of buyers searching for a home.
Many purchasers, facing multiple offers, needed to exercise patience and heed the guidance of their REALTOR before entering into a contract to purchase. In most cases, persistence paid off, and buyers found the home that met their needs.
The median sale price of single-family homes in Chittenden County jumped 18% in 2021, increasing 27% since 2018. Still, homes remain an affordable option over renting, with record-low mortgage interest rates offering the opportunity to build equity.
New construction projects such as South Village and Hillside at O’Brien Farm, both in South Burlington, introduced a variety of much needed, new housing options to the market – including townhomes, single-family homes, carriage homes, and “flats.” Buyers had time to make selections in location, floorplans, and custom finishes while not competing in the frenzied re-sale market. New construction projects throughout the county gave an opportunity for exiting homeowners to use their strong equity position and “right-size” to a new, energy-efficient, and low-maintenance home. Options for new builds are still available with Spring 2022 delivery dates for buyers with flexible timelines.
In northwest Vermont, the strong investor market was driven by low-interest mortgage rates and solid equity positions in existing properties for owners. The number of investment properties coming on the market grew by 127% resulting in double the number of properties sold over the same period last year.
Many would-be buyers are staying put or returning to the rental market after unsuccessfully writing multiple offers for purchases. As local businesses turn back to hiring and recover from the global pandemic, new employees struggle to find affordable housing options in the area. The vacancy rates remain the lowest in 6 years, at just over 1%. If demand, as expected, remains high for rental housing, the desirability of owning multi-family properties will continue.
Owner-occupied properties offer the opportunity for homebuyers to offset their housing costs with rental income – improving affordability.
The real estate market is booming in Addison County, achieving the highest median sale price for a single-family home since our report began six years ago. With 16% more homes on the market, units closed jumped 53% over last year. Middlebury, Bristol, and Ferrisburgh topped the county with the most homes sold – followed closely by Monkton and Vergennes. Addison and Cornwall top the list for median sales price. Accessibility to Lake Champlain and an easy commute to Chittenden County, coupled with restaurants, art galleries, and the growth of local companies like Collins Aerospace positioned Addison County as an ideal place to experience quintessential Vermont living.
The stunning increase in Luxury sales across northwest Vermont and the entire state in 2020 has continued through 2021. Driven by cash buyers from within Vermont, who desire high-end amenities, views, and additional flexible living space, plus out-of-state buyers moving out of metro areas and closer to family – the luxury market grew by 200%.
Luxury home sellers recognized the opportunity to right-size their lifestyle or capitalize on their strong equity position, taking their REALTOR’s advice and listing their homes earlier in the year. A 48% increase in new homes coming to market offered new opportunities for buyers who snapped up properties across the region – predominantly in Chittenden County, which accounted for 81% of the area’s luxury sales.
Internationally, Coldwell Banker agents transact $168 million in daily luxury sales, including more than 32,000 properties sold. Locally, our agents represented clients in 1 out of 3 luxury sales closed in northwest Vermont so far this year. Our agents and our marketing, including best-in-class domestic and global listing syndication and prestigious publications, are a remarkable force in the arena of high-end real estate.
*For this report, Luxury homes are defined as residential properties priced $850,000 or more.
Surrounded by Lake Champlain, Grand Isle County has long been a destination for Vermonters and tourists alike. As lifestyles changed as a result of the COVID -19 pandemic, Grand Isle County proved even more desirable for those able to work remotely. Still a quick drive to Chittenden County, Franklin County, and Burlington International Airport – single-family home sales have increased by more than 77% so far in 2021. Inventory levels proved healthy enough to satisfy new buyers while keeping the pace of the market reasonable at nearly three months from listing to closing. Alburgh accounted for 37% of the homes sold across Grand Isle County. Affordability of this northernmost town, coupled with 34 new homes coming to market, likely contributed to this surge.