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.