Home prices rose sharply this summer as out-of-staters moved into Vermont and market conditions deterred the construction of new houses, tightening the supply.
The median sales price paid in September hit $348,000 — 23 percent more than the median sales price of $281,335 in September 2019, the Vermont Association of Realtors said in its September market report, released Nov. 4.
Prices and sales volume started picking up in May and haven’t slowed, said Kathy Sweeten, who became director of the state real estate organization in August.
For the year to date, from January through September, home prices statewide are up 13 percent from the same period in 2019, according to the Vermont Association of Realtors. The year before, from September 2018 to September 2019, sale prices rose 7 percent year-over-year.
The averages sales price for a home in the Stowe market in September was $662,074, up
29 percent from the previous September. In Morrisville, the average sales price jumped 38 percent year to year, from $223,595 to $308,300.
Overall, Lamoille County posted an increase of 45.5 percent. The average sales price from September 2019 went up from $341,152 to $496,327.
Heightened interest from out-of-state buyers, limited inventory and low interest rates have all played a role, Sweeten said.
“People who had been looking over the wintertime got more active” in May, by which time they were competing with people who were seeking to get out of major metropolitan areas, Sweeten said.
Anecdotal reports from real estate agents have pointed to an influx of out-of-staters this year.
Agents aren’t required to collect or report information about where sellers come from, but the Vermont Association of Realtors is working with the state Department of Taxes to obtain property transfer tax data to get that information. Sweeten said she doesn’t know when it will be available.
But what’s clear already is that Vermont is experiencing a larger real estate sales expansion than its immediate neighbors. In both New Hampshire and Maine, median sales prices rose 15 percent year-over-year in September for a single-family home, to $350,000 in New Hampshire and $270,000 in Maine, according to each state’s Realtor organization.
Vermont’s well-publicized success at controlling the rate of COVID-19 infection has been credited by many of the state’s housing leaders as a reason for the influx of new residents.
While the populous Chittenden and Franklin counties typically see the most real estate activity, Sweeten said sales are up around the state.
She said she couldn’t name a region of Vermont where prices haven’t risen.
Housing shortage neither new nor unique
While Vermont’s a regional leader in rising home prices, it’s in no way alone in its shortage of housing stock. Many U.S. states have been struggling to incentivize home construction — not for the wealthy, but for working people — for decades.
The shortage isn’t good for the state, said Evan Langfeldt, CEO of O’Brien Brothers in South Burlington. He recently helped his parents move out of the 3,000-square-foot family home in Middlebury. He described the sale of that home as a “feeding frenzy,” and added that there are few options for his parents’ generation to move to when they want something smaller.
“The state has to be successful on a variety of fronts: bringing in more workforce, bringing in people planning to have kids, housing the existing boomers as they retire,” he said.
For companies trying to attract workers, the housing prices are a documented deterrent.
“It’s one of the reasons that we’re unable to retain a lot of young Vermonters living in the state,” said Erhard Mahnke, coordinator for the Vermont Affordable Housing Coalition. “Our housing is so expensive, and our wages are relatively low.”