Coldwell Banker Hickok & Boardman Realty has released its "Northwest Vermont Market Report: Spring 2015." Overall, despite the tough winter weather, sales of residential properties rose in Chittenden, Franklin, and Addison County. Grand Isle County saw a decline in activity - however the county typically has the least amount of activity and one sale can have a relatively large impact on trends.
The report finds that while employers are hiring and the unemployment rate continues to drop - wage growth continues to lag putting pressure on consumer spending. During the past two years, home price appreciation has outpaced wage growth in the majority of US housing markets, creating affordability challenges for some buyers.
Nevertheless, sales volume in Northwest Vermont jumped 13.6 percent during the first three months of 2015 indicating pent up demand for home buying. Mortgage rates, still near historic lows, may rise later this year - although predictions are that the average 30-year fixed-rate loan rate will stand at 3.9 percent for the year.
CHITTENDEN COUNTY
After ending 2014 on a strong note, Chittenden County’s residential sales market continued to see increased buyer demand in the first three months of 2015. Sales of residential properties rose 12.1 percent during the first quarter, buoyed by demand in Burlington and Essex.
Even though buyers closed on more homes than the first quarter of 2014, CBHB agents reported that some potential homebuyers and home-sellers delayed looking or listing their properties this winter, given the below-normal temperatures that put a damper on home sales across New England. The National Association of Realtors found that sales of existing homes declined 6.5 percent in the Northeast, largely because the month’s freezing temperatures kept would-be buyers inside.
The tough winter weather appears to have only delayed buyers’ interest, as well as the desire for homeowners to list their properties. With the state finally experiencing warmer weather, CBHB agents are reporting a surge in property listings, as well as renewed interest from buyers.
Professionals are relocating to Chittenden County for job opportunities with employers such as Dealer.com and the University of Vermont Medical Center, while younger workers and renters are increasingly considering purchasing their own homes, helping to lift demand for residential property. With a wide range of property types and towns in the county, there are a myriad of options and price points, from Burlington based condominiums, new build in South Burlington to luxury property along Lake Champlain.
While prices rose, the number of transactions slipped, with residential sales declining 4.3%. CBHB Realtors are finding that homes in the $250,000 to $350,000 price range remain in demand, but inventory in that segment is often tight. At the same time, there is a lot of available inventory above $500,000, allowing buyers in that segment to be more selective.
The economic outlook for Vermont this year remains positive, with economists at the Vermont Economic Outlook Conference predicting the state’s unemployment rate could decline to 3.5% by year-end, with corporations adding 1,500 private-sector jobs. Some towns are already experiencing a lift thanks to local employers, such as Essex, where the overhang about the future of IBM’s chip plant in Essex Junction resolved last year when new owner GlobalFoundries vowed to keep jobs intact.
Despite the jump in transactions, median pricing across the county rose slightly, by 0.8%. Chittenden County ranked as the most expensive residential market among the four counties tracked by the Coldwell Banker Hickok & Boardman Realty Northwest Vermont Market Report.
Inventory has been tight in the $250,000 to $350,000 price range, which is the sweet spot for first-time homebuyers. Even though employers are adding jobs and the unemployment rate remains low, Vermont’s per-capita personal income has been relatively stagnant compared with New England as a whole, which raises affordable issues for some homebuyers. Property taxes have continued to rise, adding to concern about the cost of housing in Vermont.
Several towns saw an increase in buyer demand in the first quarter. Aside from Essex and Burlington, Colchester and Winooski also recorded significant jumps in sales, at 51.7% and 25%, respectively. The 23.3% increase in median sale price in South Burlington may be attributed to the success of South Village. Even though Burlington remains a desirable location, its more expensive housing stock is prompting some buyers to search for homes in less expensive municipalities, such as Winooski. The median sale price in Burlington slipped 13% in the first quarter as buyers may have been searching for lowerpriced housing.
Inventory continues to be tight in Burlington, although our agents are seeing more homes come on the market, which may help meet buyer demand. New listings in the city rose 20.8% in the quarter, signaling that more owners have confidence to move forward with their plans. Healthy discussions surrounding affordablity challenges in Burlington are taking place with the proposed Housing Action Plan and the recent announcement of the redevelopment of the Burlington Town Center. Initial proposals include retail, office, and housing.
The multi-family market recorded 20 sales in the first quarter, or 16.7% below the year-earlier quarter. A lack of inventory continues to be an issue for investors, who are attracted by Chittenden County’s low vacancy rates and relatively high rents. CBHB agents are finding that well-priced duplexes and three- and four-apartment buildings in good locations are fielding multiple offers. Still, tight inventory will continue to be an issue for this segment, given that new listings slipped 6.7% in the first quarter.
Because of the wide range of pricing and demand characteristics across Chittenden County, it’s important that homebuyers and sellers consult a knowledgeable Realtor. Across the county, Coldwell Banker Hickok & Boardman Realty is involved in more than one-fifth of all real estate transactions by unit sales, more than any other competing agency.
- Sales of residential properties rose 12.1% in the first three months of 2015, driven by demand in Burlington and Essex.
- Inventory in the $250,000 - $350,000 price range remains tight prompting buyers to broaden their search to include neighboring counties.
FRANKLIN COUNTY
After a slower fourth quarter, home sales in Franklin County rebounded in the first quarter, helped by demand from first-time buyers seeking property in towns located near 1-89.
Nevertheless, demand and pricing was bifurcated between the eastern and western sides of Franklin County, with our agents noting that property in eastern towns, farther away from 1-89, are taking longer to sell and at lower prices than on the western side of the county. Across the county, median pricing slipped 3% to $179,500.
Lower gas prices have helped encourage buyers to look for property in the county, which serves as a commuting hub for professionals with jobs in Chittenden County. With the question over the future of IBM’s former chip plant resolved, that’s also unleashed some pent-up demand for property in Franklin County.
On top of those trends, some buyers are looking for homes in Franklin County because of its lower price point when compared with Chittenden County, where the median home price stands at almost $255,000. For buyers looking for sub-$200,000 properties, Franklin County may offer more value and bigger land parcels, our agents note.
Towns such as St. Albans City, St. Albans Town, Georgia and Fairfax – all close to 1-89 – recorded the largest number of transactions. St. Albans City recent downtown renovation is also attracting buyers to the town, while employers such as pharmaceutical company Mylan are hiring, adding to demand for housing.
Home sellers required 144 days to market their properties, slightly more than 122 days required a year earlier. This period also reflects fthe irst quarter which includes the winter selling season.
About 93 percent of the county’s residential market is represented by single-family homes, where the median sale price dipped 2.1 percent. The median sale price for condominiums rose 1.1%.
With the abnormally low winter temperatures during the first quarter, land sales fell 70% to only three transactions. The median sale price for land parcels rose 3.1% to $66,000.
Investors continue to look to Franklin County for multifamily homes, especially given the competitive market for duplexes and three- and four-apartment homes in Chittenden County. Six multi-family homes sold during the first quarter, unchanged from the year-earlier period. The median sale price rose 85.2% to $306,000.
- Median pricing slipped 2.7% last year.
- Lower gas prices, a lower median sale price, and tight inventory levels in Chittenden County have buyers favoring Franklin County.
- Towns located on the I-89 corridor are proving popular with home buyers.
ADDISON
After a strong fourth quarter, property sales in Addison County continued with strong momentum in early 2015. An improving economy and declining gas prices helped bring buyers back into the market late last year. CBHB Realtors are noting pent-up demand for properties in good condition and locations, with those homes going under deposit quickly.
Those trends helped boost the number of transactions by 36.6% during the first quarter, while the median sale price rose 18.1 percent. Local homebuyers who work for employers such as Middlebury College and Goodrich Aerospace are searching for homes in towns such as Middlebury and Vergennes.
Middlebury remains the county’s most active town for home sales. Transactions there dipped slightly in the first quarter, with the town reporting 13 sales compared with 15 a year earlier. The median sale price slipped 3.6 percent.
A few smaller markets saw strong growth in median sale pricing, although their smaller number of transactions means one or two sales can have a larger impact on overall trends. Ferrisburgh, for one, saw its median sale price jump by almost one-third, although that was based on just five property sales.
Addison County remains popular with high-end buyers seeking lakefront luxury property. Although only one luxury sale was recorded in the previous 12 months – a $1.29 million home in Ferrisburgh –CBHB agents note that two high-end properties have recently gone under deposit.
The county recorded 6 land sales during the first quarter, little changed from the 7 recorded a year earlier. The median sale price rose by less than 1 percent, to $75,250. Some retirees and homebuyers have been seeking land purchases in the county in order to custom-build homes.
The county recorded 39 land sales in 2014, a decline of 13 percent, although the median sale price rose 17.7% to $76,500. Some retirees and homebuyers have been seeking land purchases in the county in order to custom-build homes.
- Property sales in Addison County continued to witness a strong momentum in early 2015.
- Our Realtors are noting pent up demand for property in good condition and locations.
- Lakefront luxury property remains popular with high-end buyers looking in Addison County.
GRAND ISLE
With below-normal temperatures hitting Vermont this winter, home buying activity in Grand Isle slowed to below typical levels. Sales of luxury homes also slowed to a standstill, given that most high-end buyers prefer to look at the county’s waterfront properties in balmier weather.
That shifted the mix of home sales to lower-priced singlefamily homes, which comprise the bulk of the county’s residential market.
The median sale price for residential properties slipped 41.2% in the first three months of the year, although that includes one low-priced mobile home sale. Excluding that transaction, single-family homes saw their median sale price slip 25.3% to $183,000.
Because Grand Isle is the smallest real estate market by volume in Northwest Vermont, a shift in only a few transactions can have a large impact in overall sales and pricing trends.
The county has recorded two land sales in the first quarter, or little changed from the three land sales recorded a year earlier. The median sale price slipped 61% to $50,000.
Source: Coldwell Banker Hickok & Boardman Realty. 4.21.2015
