Month: May 2017

Historically the first three months of the year represent the slowest period for real estate sales in Northwest Vermont.  As the landscape changes with the arrival of spring and summer, so might real estate trends as more sellers and buyers enter the market.  Stronger-than-normal sales in the 1st quarter of 2016 coupled with tight inventory continuing into 2017 have resulted in a decline in year-over-year sales for the first quarter of 2017.

Tight inventory levels still continue to put pressure on the real estate market in Northwest Vermont. In the first quarter, fewer homeowners have chosen to put their homes on the market. Buyers may have fewer choices, especially in the sweet spot of housing – the mid-priced range of $200,000- $400,000. In addition, the National Association of Realtors reports the median tenure for sellers living in their home has increased to 10 years from a historical median of 5 to 7 years.

Over the past 3 years the number of single-family homes available for sale during the first 3 months of the year has declined from 2256 to 1680 – a 26% decline – while closed sales have increased 15% during the same period. The results are homes being on the market for fewer days and, in many cases, multiple offers driving the prices up with both the median and average prices showing increases during the first quarter. Our Realtors advise buyers to be well prepared to make strong offers, with their financing in order. In some circumstances, Agents are advising their buyers to look at homes priced lower than their threshold in the event of a multiple offer situation. In a fast-paced market, Sellers need the expertise of their Agent to help them navigate the incredibly complicated process of lining up a contract for a purchase as well as the contract for a sale of their current home.

While both the median and average sold prices are showing increases, single-family home prices appear to be more stable than the healthy increases demonstrated in the sold prices of condos. In general, the increase in prices of condos comes from new construction projects that have come on the market versus the appreciation of existing inventory.

Cities, towns, and developers have increased density in their planning and zoning strategies in order to preserve open green spaces. These Planned Unit Developments (PUDs), including condos and single-family homes, are becoming more popular as homeowners look to “right size” their lifestyle with housing options that provide ease of maintenance and, in some cases, affordability. New construction can be more energy efficient and many new communities offer amenities such as community gardens, walking trails, parks, and proximity to conveniences.

Mortgage rates are being watched closely. After a climb in late 2016 and some volatility during the first 2 months of 2017 – many predictions are that the rates will remain steady for the remainder of the year. Changes to mortgage rates can affect buying power when affordability remains an issue. For example, an increase of .5% (one-half percent) in interest rate may reduce purchasing power by 4-5%. So, even though prices are rising slightly and inventory is limited, buyers who are serious about realizing their goal of homeownership this year should be ready to make an offer sooner – with the advice of their Agent.

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.