by Olga Peters, Vermont Business Magazine While other sectors of the Windsor County’s economy struggle through the COVID unknown, real estate seems to be “hot” in the words of many interviewed for this article.
The online news outlet The Chester Telegraph published a piece in July where local Realtors spoke about a wave of house sales.
They likened it to the uptick in sales after the attacks of September 11, 2001, when a number of people vacated urban centers for a quiet rural life.
Buff McLaughry has seen recessions ebb and flow during his 40 years in real estate. He sees the market picking up, but has yet to pin the uptick exclusively on urban refugees seeking the idyllic safety of Vermont.
McLaughry is based with Four Seasons Sotheby’s International Realty.
See Also: Windsor County Economic Report: No days off
“The market in Windsor County has been interesting to say the least,” Buff said.
January and February started out as “normal” compared to other years, he said. March, however, marked a “dramatic change” as states entered stay-at-home orders to slow the spread of the coronavirus.
In general, inventory is “way down,” he said.
The number of properties for sale is down in McLaughry’s opinion in part because potential sellers are still sheltering in place. They're fearful of strangers walking through their houses or wary of house hunting themselves.
McLaughry said he understands the fear and said that “the psychology of sellers” during COVID has required new energy.
“There’s more demand than has been satisfied,” he said.
McLaughry said that under the Governor’s emergency order, he conducted a number of video tours or appointments over FaceTime. Most potential buyers put the property under a contract to purchase once they had a chance to visit it. Very few closed on a property without first seeing it, he said.
According to McLaughry the average family income in the Upper Valley is between $70,000 and $120,000. Most of these families are in the market for houses costing between $250,000 to $400,000.
“You can’t find a house much under $200,000 unless it needs a lot of work or it’s way far away [from employment centers] and you spend all your money driving,” he said.
Looking at statistics for Windsor County specifically, McLaughry said in general sales are down compared to 2019, however the number of pending sales, or houses that are under contract, is higher than last year.
Compared to this time last year, McLaughry said that the inventory of houses for sale is down 44.1 percent. The number of properties sold is down 7.5 percent. While going from 10.3 months of available inventory to 6.2 months of inventory would be troubling, he said that this summer the number of pending sales are up for the county 15 percent compared to this time last year.
This pattern repeats itself across several towns in the Upper Valley. Woodstock has been popular with an increase in pending contracts of 52.5 percent, he said. Hartford’s pending sales are up 8 percent.
Prices have risen in general, which is good for sellers but not so good for buyers, he said. Prices in Windsor County as a whole is up 8.1 percent.
McLaughry agreed that he has met with several buyers from out-of-state, but not an unusual amount. In his opinion, most of the people making the move considered it for some time.
According to him, the Four Season Sotheby’s offices located near ski areas such as Mount Snow, Stratton, and Okemo have experienced more of an uptick in second home purchases and other people moving to the area from out of state.
McLaughry expects location data to be available later this summer. In general, however, the Upper Valley usually sees 70 percent of buyers coming from out of state or moving from a non-contiguous area. People moving from within the local area account for usually 30 percent of sales. Now he estimates the split is more 60/40.
In his opinion, what has changed in the market is office rentals as more people telecommute. As an example Dartmouth Hitchcock Medical Center has approximately 1,000 employees working from home, according to McLaughry.
If employers permanently shift to a work-from-home model, it could have a big impact for office and commercial rentals, he said.
McLaughry said despite a hot real estate market right now, he expects the region will exit the COVID pandemic with the same housing issues it entered with. He agrees that the region needs more affordable housing and more workforce housing, he said.
In McLaughry’s opinion, the county’s housing shortage took root during the 2008 recession. McLaughry said, in the late 1980s and early 90s, general contractors would build a few spec houses every winter while they waited for the summer construction months. This practice mostly stopped in 2008 when banks tightened their lending, he said.
“People have to be patient,” he said. “Patience will lead us in the right direction.”
Dana Waters of Dark Horse Realty and Property Services covers many of Windsor County’s rural towns such as Reading and Wethersfield. In general, he has seen an increase in demand as McLaughry but with more buyers from within the state.
Waters said that prices in the towns his business serves dropped 25 percent during the 2008 recession. For approximately 10 years, houses were selling less than what they were worth, Waters said.
Only recently have houses started selling for what they’re worth, he added.
People moving from out-of-state tend to favor the “trendy” towns such as Woodstock and Norwich, he said. It’s not until the inventory in those towns dry up that people start to look at the more rural towns.
Waters doubts that housing prices in the small towns will increase too much. Some sellers look at a hot market and thing they can make a killing, he said. The “checks and balances of the real estate market” often quell “unrealistic expectations,” he said.
Sellers can price a building at whatever they want, Waters continued. If the building appraises for less, however, a bank is unlikely to approve a loan for higher.
“We have a fair amount of pending sales right now and I’m very happy with that,” he said.
As a school board member, Roy said multiple conversations are happening around how many families might move to the area. Part of their concern is classroom sizes and how to maintain social distances if schools reopen.
More families moving to the area is a good thing, she said, but more kids in school could also change how schools provide education if the pandemic continues.
“The big question is, how long will this pandemic last?” she asked.
Olga Peters is a writer from Windham County and reporter for The Commons, a weekly newspaper based in Brattleboro (commonsnews.org).