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2010 Year in Review
With 2010 quickly coming to an end I will be completing an analysis of the market soon. In the meantime, please feel free to give me a call.
2009 Year in Review
After the changes that occurred during 2009, we saw the market in transition during 2009. The best way to fully understand how it affected you as a buyer... or seller... please call me so I can complete an analysis of your specific town or neighborhood.
2008 Year In Review
While putting together this year-end analysis of the local real estate market two thoughts came to mind. The first is the quote of Mark Twain, "There are three kinds of lies: lies, damned lies, and statistics." Whenever you compile information to produce a report of any kind you are typically hoping for a favorable outcome, or at the very least want to slant the information to achieve a desired impression.
The second thought I have is related to the words of the late U.S. Speaker of the House, Thomas “Tip” O’Neill who said “All Politics is Local” when referring to the affect legislation had on people.
I’ll start by paraphrasing O’Neil, “All Real Estate is Local”, and will try to avoid the “lies and damned lies” described by Twain. Where the information is good about the local market I will point it out with delight because I want for buyers and sellers to be comfortable and confident with their decisions. However, when the news is not so good I will tell the truth and report it.
Based on my analysis of single-family detached home sales completed within the Vermont Real Estate Information Network, the real estate market in Chittenden County saw declines in 2008 when compared with 2007.
Year No. of Sales Avg. Sale Price Median Sale Price
2007 1014 $332,928 $277,000
2008 788 $320,332 $265,000
The number of sales decreased by 22.3% in 2008.
The average sale price declined 3.78% while the median sale price went down 4.33% in 2008.
It is important to note some variance in parts of Chittenden County. The Burlington market remains stable, and perhaps even robust when compared with some parts of the United States. Based on VREIN data, both the average and median sale prices went up in Burlington. The Average Sale Price for single-family detached homes increased 9.21% and the Median Sale Price went up 1.19%.
Other parts of Chittenden County did not remain as stable, however. For example, the Jericho - Underhill area witnessed a 7.41% decline in the Average Sale Price while the Median Sale Price decreased by 7.8%.
The average gross living area of a single-family detached home in Chittenden County remained unchanged from year-to-year. The average home contains approximately 2095 square feet of finished living area. The median size was identified as 1900 in 2008. The finished living area was virtually unchanged between 2007 and 2008.
Although the decline in the number of sales and sale prices indicates slowing real estate activity, the northwestern Vermont real estate market has thus far weathered the storm when compared with other parts of the country. Many regions of the country have seen double digit declines in values. National press reports suggest values have slid from 33% to 50% in places like Arizona, California, Florida and Nevada.
Vermont remains relatively stable because growth during the boom years was limited due in part to our restrictive development laws. Another factor is the general aversion to risky mortgage loans. Many markets throughout the country are noted for subprime loans and other instruments designed to put people into more property than they could reasonably afford. These actions by lenders are believed to be largely responsible for the economic collapse of 2008.
Change in Condominium Values
Condominiums (townhouse, flats, etc.) represent a significant part of the local real estate market. Whether you are interested in an entry level unit to get started in homeownership, or you simply want to avoid the need to deal with exterior maintenance and yard work, you will find a property to meet your needs in Chittenden County.
The average sale price of a condominium in Chittenden County declined slightly during 2008 when compared with 2007; from $231,851 to $225,119. This represents a price drop of 2.47% during the year. The median sale price for a condominium also declined. The percentage decrease was approximately 2.55%; from $205,125 to $199,900.
The decline in values was not universal across Chittenden County, however. For example, in Burlington the Average Sale Price of a condominium increased 1.47% while the Median Sale Price increased 0.52%. The average sale price of a condo in Burlington was $237,272 while the median price was $195,950. Interestingly enough, the Median Sale Price in South Burlington was unchanged at $215,000. The Average Sale Price of a condominium in South Burlington was $246,259; an increase of 2.27% from 2007.
The Essex and Essex Junction condominium market saw declines in the number of sales, the average sale price, and the median sale price during 2008. There were 22.6 fewer sales of condos in Essex and Essex Junction when compared with 2007. The average sale price decline 2.47% and the median sale price was 1.27% lower.
Condominium sales in Williston took an interesting turn during 2008. While the number of sales declined 20%, the average sale price increased by a fairly large percentage; 3.59%. Conversely, the median sale price took a precipitous drop of 3.86%. This dichotomy appears to be due to the fact that some higher priced condominiums were purchased in 2008 thus skewing the average sale price. This situation warrants continued observation during 2009 before buying a condominium in Williston.
Increased Inventory - The number of single-family detached homes and condominiums currently on the market is approximately 23.7% higher when compared with the same timeframe two years ago.
In my opinion this figures represents a good sign for buyers and sellers alike. For buyers, the inventory provides the opportunity to view a variety of properties before making a decision. While sellers have more competition for the attention of buyers the larger inventory in our market area is not felt to be excessive as evidenced by the fact local prices have remained relatively stable.
What's ahead? Where the local market goes from here will depend largely on the direction of the overall economy. Job losses nationwide continue to mount up and Chittenden County is not immune to this trend. I believe that higher levels of unemployment and continued bankruptcies leading to closures are of far greater concern than mortgage interest rates. Interest rates at 4% to 5% would be wonderful but that would have less affect on the market than a stabilization of overall economic conditions.
When I started my real estate career in 1979 there was a headline that stated, “Mortgage Funds To Dry Up In 24 States.” Two years later we qualified people for a mortgage loan at 16% before showing them property in order to be sure they could afford to purchase a home. Lower interest rates don’t get me particularly excited when it comes to projecting the future of sales activity. In spite of high interest rates over the years home sales have taken place. While interest do affect the buying power of people, widespread consumer confidence, job stability, and economic expansion are much more important to housing.
Lastly, when discussing "What's Ahead?" it's important to recognize that we are in unprecendented times. No one knows for sure whether many of the things the federal government is attempting to do to turn the economy around.will work. We likely have 3 to 5 years of uncertainty ahead of us so making a prediction about the local real estate market is highly speculative.
Generally, the real estate market in Chittenden County has continued to do relatively well compared with other parts of the country. With prices generally stable, and interest rates at very good levels, it's a good time to buy a home or condominium. We don't know if the bottom of the market has been established yet but given the fact economists say the recession started in December of 2007, we can be comfortable knowing values in Chittenden County have remained somewhat stable and good buys can be found. Thus far we have avoided significant declines in sale prices and inventories are reasonable. Barring a significant downturn in the national economy, or a dramatic change in the local business climate, real estate continues to be a good investment and primary dwelling option.
Ready to go? Let's get it started. Call me today so we can discuss your wants, needs, and desires.
