Northwest Vermont Mid-Year Market Report

By Brian Boardman
Posted Wednesday, Jul 29, 2015

We're over half way through 2015. Do you know the status of your local real estate market? Coldwell Banker Hickok & Boardman Realty's Northwest Vermont Mid-Year Real Estate Market Report is an analysis of Northwest Vermont's mid-year market results. Read on to find out current market trends in your town. Contact me today with questions on your LOCAL real estate market!

This report provides detailed real estate market information on Chittenden County, Franklin County, Grand Isle County and Addison County counties. Having up-to-date information on current real estate market conditions in your area can help you both as a Buyer and a Seller! If you have any questions about this report or want to talk about a specific property or locale, please contact me today!

KEY POINTS

The type of healthy sales and pricing trends that were typical before the recession are returning to our region in 2015, thanks to a rebounding local economy, historically low interest rates, and a new influx of first-time home buyers.

ECONOMIC GROWTH

With growing local businesses such as renewable-energy systems company NRG Systems and MyWebGrocer, the region's employment outlook remains healthy. Professionals continue to relocate to Northwest Vermont in search of new opportunities. The unemployment rate in Vermont stood at 3.6% in May, or almost two percentage points below the national average for the same month.

1ST TIME HOME BUYERS ON THE RISE

One measure of the market's health is the resurgence of first-time homebuyers. A recent survey of our clients found that 37% had just made their first home purchase. Last year, the percentage of first-time homebuyers on a national basis fell to 33%, from a typical level of 40%. Our market may have room to grow as more renters opt to make their first home purchase in the coming years.

LOW INTEREST RATES

Interest rates remain near historic lows, although the Federal Reserve is expected to begin raising rates incrementally later this year. This will likely push up mortgage rates slightly by the end of 2015, which could bring more buyers into the market as they seek to lock in rates before they rise even higher.

MARKET CHALLENGES

Northwest Vermont is facing some headwinds, however. These include affordability issues, given the region's relatively expensive housing market and lagging wage growth. Rising property taxes have added to affordability concerns for both mid-range and high-end buyers.

OVERALL MARKET STATS

Despite those pressures, housing demand and pricing were strong in the first six months of 2015. Median sale prices rose 5.7% across our region's four counties, while the number of transactions jumped 13.7%. All four counties recorded higher transaction levels than a year earlier. By comparison, unit sales and home pricing was little changed in 2014. The National Association of Realtors predicted in its July outlook that national sales of existing homes will rise 6.5% this year, with prices almost gaining 7%. Our view at Coldwell Banker Hickok & Boardman calls for more tempered growth, with a 5% rise in sales volume and moderate price gains.

After an abnormally cold winter that caused some consumers to delay their real estate plans, summer has brought a resurgence in home-buying activity. Sales jumped 13.7% during the first six months of the year, with more residential properties selling in each of the four counties than a year earlier. Across the four counties tracked in this report, the median sales price rose 5.7%.

CHITTENDEN COUNTY VT REAL ESTATE MARKET REPORT

The first half of 2015 has brought buyers back in force to Chittenden County, returning the market to the type of activity that was typical before the recession in 2008. A number of factors helped lift the county's real estate transactions and median pricing: local business are growing & hiring, and Global Foundries completed its purchase of IBM's chip business, including its Essex plant, vowing to keep jobs intact. Economists at the Vermont Economic Outlook Conference earlier this year predicted the state's unemployment rate could decline to 3.5% by year-end, with corporations adding 1,500 private-sector jobs. Housing inventory remains tight. Properties in the $250,000 to $350,00 are in strong demand, which is driving up pricing as homebuyers compete in the marketplace. Median pricing rose 6.2% during the first six months of 2015.

BURLINGTON

Unit sales surged by 31%. Still, median pricing slipped 4.5% during the first half of 2015, which indicates that buyers are seeking lower-priced housing. Affordability remains an issue in the Queen City. Towns close to Burlington with lower price points also recorded higher sales, including Winooski, Essex, and Colchester.

Read the full Chittenden County report here!

LUXURY REAL ESTATE MARKET REPORT (homes above $800,000)

Burlington luxury waterfront home

The luxury residential market in Northwest Vermont offers a range of spectacular properties, drawing buyers interested in waterfront estates, country properties, as well as stately city residences. While there are signs of renewed activity in the luxury market, this segment has been slower to recover than the region's mid-range housing. One reason may be Vermont's relatively high property taxes, which may potentially dissuade vacation-home buyers from purchasing in the state.

SLOWER PACE

Sellers have readjusted their expectations for sales prices amid slower demand for high-end property. That means buyers may find excellent values among the region's luxury properties, with some homes selling below assessed value.

CITY LIVING

Our Agents note that buyers are increasingly looking for high-end homes in or close to Burlington because of a desire to be near restaurants, the arts, and the University of Vermont Medical Center.

WATERFRONT PROPERTY?

Buyers seeking waterfront properties are interested in homes with higher elevations and seawalls in good condition, given concerns about flooding. Traditionally, the region's waterfront properties have maintained a strong draw on luxury buyers. However, the first half of 2015 has seen a shift toward properties closer to town or with large acreage. Only four of this year's sales included waterfront access.

Read the full Luxury Market report here.

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The complete report is currently available online only at www.VermontMarketReport.com.

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