Residential real estate booms across the region

Vermont Business Magazine, Sep 01, 1998

High energy, good news, busy times, a lack of concern over Act 60, and dwindling inventory are the words that categorize the residential real estate market in Vermont right now.

"To our knowledge, speaking with our members, the market has been extremely good this summer," said Gar Anderson, the executive vice president of the Vermont Association of Realtors. "It's turned hot and cold a few times in some areas, but in general, its been very active. The major complaint I've heard from brokers this summer is that the inventory is low--there's been a shortage of properties to show potential buyers, and this is of course the first time in a good number of years that this has happened. The market is not what it was in the late '80s, when it was really hot, but it's certainly the best it's been since that time. "

To date, Act 60 has not had a negative impact on the market, Anderson said.

"If anything, there's been some reaction from the sellers--people may be more interested in selling their properties," Anderson said. "But Act 60 hasn't fazed the buyers one bit. People primarily attribute this to the fact that the areas the people are coming from have high taxes already, so ours are not out of line. Of course, for the people who already own vacation properties, the increase is more dramatic."

However active the market, though, prices remain mostly flat, agents report. Although as the inventory shortage progresses, that could change.

"In the past, it has been a buyers' market," said Suzanne Curtis of Curtis and Curtis Realtors in Brattleboro (formerly Don Long Realtors).

"That pendulum is beginning to swing toward a sellers' market. As homes are going under contract, there are less homes, and we're starting to see an upswing in the price of property. " The Brattleboro market is thriving, Curtis said.

"The market has been the best it has been--and other Realtors share this opinion with me--in the past 20 years," Curtis said. "This area never really plunged out of the recession, but now things are really moving. In the beginning of the winter, including the slow period between Thanksgiving and New Years, which is usually a very slow time, we were showing properties. Every time we went on a vacation, we realized we shouldn't have gone."

Favorable interest rates have helped the market, Curtis said, as well as an influx of top executives from two large area companies, Vermont Yankee and C&S Wholesale Grocers Inc.

"People are not only transferring to this area because the job market is so strong, but people are upgrading from smaller homes to larger homes," Curtis said. "Families who were afraid to buy a home because they weren't sure they were going to keep their jobs are now buying. First-time home owners are buying. It's getting to the point that we're putting homes under contract as soon as we list them."

In new home construction in Brattleboro, Wilson's Woods, an undeveloped tract of land, which has spent the last 10 years passing from the hands of one developer to another, is experiencing a building boom in homes for under $100,000, Curtis said.

Of course it is Chittenden County, particularly the Burlington area, that leads the state in new home construction. Sales of existing stock are also strong. The Northwestern Vermont Board of Realtors reported that their agents sold 33 percent more homes in the first four months of 1998, compared to the same period in 1997.

Historically low mortgage rates, a strong economy, low unemployment and high consumer confidence are the primary influences on this growth, according to the latest Allen & Cable report. All sectors of the market, from first-time buyers to high-end buyers, are seeing strong sales.

New home building (one and two-family dwellings) in the Burlington area for the first four months of 1998 was up 40 percent compared to the previous year and the dollar value of that construction was up 50 percent.

Allen & Cable reported that the apartment market continues to exhibit strength and stability, as demand still far outpaces supply in the Burlington area. The average vacancy rate in the greater Burlington area is 0.7 percent, with strong demand and few properties turning over.

Rents have increased steadily with the rate of inflation, but Allen & Cable believes there are strong indications that rents may go up in the range of 5-10 percent in the next year.

In Montpelier, residential sales have been improving, said Lawrence Martin of Martin Appraisal Services.

"There's been a lot of activity," Martin said, "But sale prices seem slightly stable. They might indicate some increase by the end of the year. We've had stable prices for the past few years, but 1997 saw an increase in activity and 1998 seems to be a busy year."

In St Albans, the market is very strong, said Cheryl Boissoneault of Lang Realtors, which serves the greater Franklin County area.

"In May, our average sale price was $102,000," Boissoneault said. "In June, it was $120,000. Right now, our year-to-date closed what we closed the entire year last year. We're seeing a lot of out-of-state people. Some of the buyers are with Husky, but our last three closings were people from California. This is absolutely not second homes."