by Olga Peters, Vermont Business Magazine If sticky wickets had legs, housing, workforce, and childcare would be the three legs of Vermont’s very sticky economic wicket.
It could be argued that of these three interconnected issues, increasing the amount of housing is a top priority. It will be hard to fill open jobs or expand childcare if people have nowhere affordable to live.
In Addison County, Fred Kenney of the Addison County Economic Development Corp., said the area needs more middle-income workforce housing (80-100 percent of area median income).
He knows the state's working on legislation to expand middle-income housing. Still, it could take years before new units are ready for habitation.
Kenney believes more money and less regulation would go a long way in solving Vermont’s housing crunch.
Some organizations, such as Middlebury College, are tackling the shortage directly.
To help address the housing shortage, Middlebury acquired a $1.5 million property that Summit Properties is developing into workforce, affordable, and market housing.
In April, the college announced it had purchased the 35-acre parcel. The school will incrementally sell the land to Summit as the property is developed. Summit plans to build 100 units of one to four-bedroom apartments. Depending on the final mix of housing types, the development will house between 250 and 350 people.
“Middlebury College’s goal with this project is to support one of the community’s greatest challenges—affordable housing,” said David Provost, executive vice president for finance and administration at Middlebury. “The College’s ability to attract and retain faculty and staff is dependent on the economic development of the Town of Middlebury, Addison County, and the state of Vermont. This provides the beginning of a solution for the College, Porter Medical Center, and all businesses in the region.”
Households with incomes of approximately $50,000 to $80,000 in Addison County are considered to be served by workforce housing.
Also in the works are the Firehouse Apartments in Bristol. Addison County Community Trust and Evernorth are partnering to create 15 apartments for low- and moderate-income households. Another four apartments will be set aside as supportive housing for homeless or at-risk households.
The new building is part of the Stoney Hill master development. It includes a new fire station, business park, and mixed-income housing.
Realtor Krista Hoffsis with Four Seasons Sotheby’s International Realty said a lot remains to be seen on the real estate side of the housing market.
Looking at the June data coming out of Four Seasons Sotheby’s, it appears the market is slowing down.
Compared to the previous year, the number of sales and the months of inventory has decreased. However, the median listing and sales prices increased in the same period.
June marked the first time since January that Addison County had fewer new listings (38) compared to the month before (May was 48), said Hoffsis.
“We still have an inventory challenge in the state of Vermont, which is that there's just not a whole lot of inventory, and there's a lot of buyers,” she said. “That doesn't mean that you can't have a successful sale, it just means that we have limited choices.”
The whispers of a recession ending the pandemic seller's market? Hoffsis believes it is impacting people’s mindsets about the market.
“I've had a few people come up to me over the last week and say, ‘Oh, it's not a seller's market anymore. It's no longer a good time to sell’,” she recalled. “And that's not true. But even if that's what people are hearing, they might be less likely to list their property right now.”
She said the county’s one-month inventory indicates a solid seller's market.
Hoffsis said there was a price drop as soon a buyer crossed from Chittenden to Addison County. Not so much anymore. She attributes this to increased demand and remote work having extended people’s geographical housing market.
She noted that the six-month average for listed homes in Addison County was $420,000. Today’s average list price in July was $480,000.
The condominium market in the county has been bustling, and the office is still seeing an influx of out-of-state buyers.
In her experience, folks moving into Vermont mainly come from the West Coast, searching for a less volatile environment with fewer natural disasters.
Hoffsis said that out-of-state buyers have much more flexibility about where they move. Their goal is Vermont.
“They're just looking for that quintessential Vermont house and lifestyle,” she said. “Those are special properties, and I think they're moving more quickly off the market.”
In comparison, in-state buyers usually have more restrictions. They’re moving for a specific job and must be within commuting distance.
Unfortunately, many local buyers are being priced out of the market.
“The rate of appreciation has been just bonkers,” she said. “So that really affects especially first-time homebuyers in the state.”
Hoffsis states an expected rate of appreciation in a given year is five percent. In 2021, the state averaged somewhere around 20 percent.
That rate of appreciation shouldn’t continue, she said. Still, between that and the increase in interest rates, a home is probably out of reach for many first-time buyers.
One positive trend in the current market is that homes considered “fixer uppers” are no longer lingering on the market. This trend could mean an overall improvement in Vermont’s housing stock.
“If there was a silver lining in my mind - and I'm also really into historic homes - it would be that those are now getting some TLC, and once they're retrofitted, those will end up being great options,” Hoffsis said.
Olga Peters is a freelance writer from Southern Vermont.