Vermont Housing Prices Hold

Real Estate Agent with Coldwell Banker Hickok & Boardman
SOUTH BURLINGTON -- Vermont has bucked the national trend that projects home values will fall 1.7 percent this year, a senior economist at the National Association of Realtors said Tuesday.

"Vermont is a little more insulated, especially from the national trends" said S. Lawrence Yun, vice president of research for the Washington, D.C.-based Realtors group.

Vermont has been spared the decline in real estate values because relatively little "speculative buying and building" occurred, easing the effects of the sputtering housing market, Yun said.

Rampant speculation -- designed to cash in on the booming real estate market -- occurred most dramatically in Arizona, California, Florida, Nevada, and greater Washington, D.C., he said. Those areas are now facing the most substantial declines in property value.

The slowing of new home construction, despite the associated job losses, is good news for Vermont's housing market, Yun said, because it keeps the housing supply from expanding and driving prices down.

Vermont's restrictive building environment also has a beneficial side-effect: fewer projects have been built and that helps support the prices of existing homes when the market sours, said Mark Brooks, a partner at real estate analyst firm Allen & Brooks in South Burlington.

"You don't have this competition of new homes putting downward pressure on prices," he said.

Demand for vacation homes in Vermont helps support Vermont's real estate market, Yun said.

Retiring baby boomers looking for vacation spots will continue buying homes throughout Vermont, he said. "I think Vermont is positioned well."

Kathleen Sweeten, executive vice president of the Northwestern Vermont Board of Realtors, attended the Northeast Real Estate Conference and Expo at the Sheraton Hotel and Conference Center where Yun spoke Tuesday. She, too, said Vermont's home values continue to rise.

For the first six months of the year, statewide median prices for primary residence, single-family homes increased 7 percent, she said..

Despite the increasing value of Vermont homes, it is taking several weeks longer for houses to sell than last year, she said.

"Buyers are a little skittish on jumping in right now," she said. "They still are buying. They are just taking a little bit longer when making their decision."

Rachel Smith, a co-owner of S.R. Smith Real Estate in St. Albans, sells property in Chittenden, Franklin and Grand Isle counties. Homes are not fetching the prices they did in past years, she said. Buyers are also increasingly "fussy," and are requiring that homes be in better condition, she said.

Credit crisis

The National Association of Realtors announced Tuesday that tighter credit for home purchases will dampen sales until 2008.

Mortgages are harder to obtain because of the subprime mortgage mess. Subprime loans, which are given to borrowers with poor credit, have led to an increasing number of homeowners falling behind on payments and a rising foreclosure rate.

"Wall Street was careless," Yun said. "They blindly provided loans to anyone who wanted it."

This year, prices on existing homes, throughout the United States, are projected to fall 1.7 percent to a median price $218,200, according to the National Association of Realtors. Next year, national home prices are expected to rise 2.2 percent to a median of $223,000; median means half the homes will sell for less and half will sell for more.

This year, Vermont's single-family homes and condominiums sold for 7.1 percent more in the first three months of the year and 3.7 percent more in the second quarter, compared with the same periods last year, the Realtors' association said.

Allen & Brooks, which use a slightly different methodology to calculate sales prices, said the median sales price in Vermont is $210,000, through June; that's up from $205,000 last year, said Steve Allen; the analysts' study earlier this year showed Chittenden County median house prices steady at roughly $269,000. Despite dips in some parts of the housing market, Yun said buying a home is a solid investment. "For most homeowners, who are in it for the long term, there is no pain," he said.

Yun said he is optimistic about the housing market.

There is a "pent-up demand that will slowly be unleashed to the market," he said.

For this year, existing homes sales are projected to be 5.9 million, down from the 6.5 million sold last year. Next year, the National Association of Realtors expects homes sales to rise to 6.3 million.

"I think we are very fortunate, here in Vermont," Sweeten said. "Through all these cyclical markets, we don't see the strong types of deviation that other markets see."

Published: Wednesday, September 12, 2007
<!--ARTICLE BODY TEXT--> By Dan McLean
Free Press Staff Writer

Comments (1)

Skip M
Great information to have, thank you. 
Feb 19, 2008 06:07 AM