Limited Inventory, Many Out-of-state Buyers Keep Vermont Home Sales Unattainably Brisk
If you've been trying to buy a home in Vermont recently, you may have already learned this the hard way: it’s not an easy process during the pandemic.An analysis by financial literacy website HowMuch.net looked at housing affordability nationwide and, using median home prices, median income levels and mortgage rates, found Vermont's housing market was the least affordable in the nation. That doesn't mean it's necessarily the most expensive, but it does mean that just 16% of households can afford a mortgage payment on the typical new home in Vermont.
VPR’s Mitch Wertlieb spoke with Leigh Horton, a broker and realtor with Leigh Horton Properties in St. Albans, to get a sense of what’s contributed to Vermont's booming housing market and whether 2021 shows any sign of a change. Their conversation has been edited and condensed for clarity.
Mitch Wertlieb: What your 2020 was like? Obviously, a bizarre year with the pandemic, but how was business for buyers and sellers?
Leigh Horton: It was a very interesting year, and I think it caught many real estate agents off guard, in the fact that it was a positive year for sales — a challenging year, for sure, for buyers — however, sales did remain consistent throughout the year and throughout the pandemic.
There was a sense that out-of-state buyers were looking for the sort of postcard-perfect small-town Vermont home, especially around Burlington [and] Chittenden County. Is that true? And was it true in Franklin [and] Lamoille Counties, as well as in Chittenden County?
Yes, it was true. And going into 2021, we’re actually seeing it more. If you take a look back at the sales, the buyers, from 2020, personally speaking, 10% of my buyers were from out of state. However, now heading into 2021, over 80% of my buyers are from out of state.
"Ten percent of my buyers were from out of state [in 2020]. Now heading into 2021, over 80% of my buyers are from out of state." - Leigh Horton
Who are these folks, mostly? Can you tell us a little bit about them?
It's primarily [buyers in] the New England region. There are some that are moving up from the warmer-climate states to Vermont. Primarily, it is for relocating for job purposes, versus those who are realizing that they can work anywhere. [These incoming buyers] actually do have jobs in Vermont towns.
Are these people buying primary homes? Or are they buying second homes?
Primary homes. It was surprising when I took a look at numbers, and saw that was, in fact, what was happening. You know, it's interesting, it’s all types of inventory. It's not just primary homes. It is [also] secondary homes. It is all price ranges.
If the homes are priced well [and] desirable, they're going under contract within days. And within two days, seeing 20 to 30 showings, and then going under contract on the third or fourth day.
It's not that Vermont has the most expensive housing market, but at least according to this one website’s [analysis], it is considered the least-affordable [housing market] in the country. So, I'm wondering, what are you hearing from the average Vermont home buyer. Are they able to buy a home?
"The buyer pool is so large right now, it's far surpassing the number of properties that are on the market ... And when we have such a huge buyer pool [as we have] here, our sellers are at the luxury of really having a super-strong offer to move forward with." - Leigh Horton
Which often means it is that buyer that is super strong financially [who ends up with the winning offer for a home].
It sounds like there's some competition, then, that out-of-state buyers who may be able to put more cash down, for example, than somebody who's [already living] in-state.
What about some advice for buyers who are losing some of these homes to wealthy out-of-staters?
It isn't always the easiest path, especially when we are in such a strong seller's market. You need a great agent, an agent that is laser-focused, who has intense marketing knowledge of where you are looking to purchase. Negotiating, problem-solving expertise, it’s super important. And you'll get there. It may take time, it might happen right out of the gates, but you will get there.
Do you see prices coming down over, let's say, the next year? What do you think might happen?
I can certainly answer to what's happening now. However, guess-timating, as far as the moving target, and what's going to happen ... most experts are saying we're not going to see the pricing come down. If anything, we'll see a bit of a marketing dip, and sales will continue to slow because of the low inventory.
I'm just wondering if there is some good news here, or some kind of silver lining [for Vermont homebuyers], in that you are seeing homes moving in places other than Chittenden County. We know there's such a glut of people that typically they want to move to Vermont, and Chittenden County is the place where they go. But if you're seeing more homes that are selling in Franklin County, is that a good sign?
One way that we like to view the market is [by] our month's supply of inventory. So, if we take a look [as] if there were no more properties to come on the market today for the next month out, what does our inventory look like?
"All regions right now are seeing one to two months of inventory. Which is an extremely strong seller's market. So I think all markets are experiencing pretty close to the same thing, whether you're in Chittenden, Franklin, Grand Isle, Washington [or] Lamoille." - Leigh Horton
Do these folks from out of state understand about Vermont winters?
It's interesting you say that. I did a walk through — a virtual walkthrough — [the other day] with buyers purchasing in Essex, and they asked about mud season. And we did validate, that yes, this is true.
But people are looking for that outdoor lifestyle. I know my family has certainly embraced it even more through COVID. And so they are moving here for the wonderful outdoor lifestyle that Vermont has to offer.
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