Vermont Housing Market Slower, But Steady

Home sales in Vermont took a bit of a breather last year, the Rutland Herald reports, following a trend that has seen a cooling of the red-hot housing market nationally.

There were 15,878 single-family homes sold in the state last year, down from the prior year when 17,815 homes were sold.

While the number of homes declined last year, Realtors considered 2006 a good year, with the median selling price for a home on less than six acres increasing to $194,000 from $180,500 in 2005.

For a home on six or more acres, the median price last year was $240,000 compared to $225,000 the previous year.

Despite last year’s dip, Kristen Hewitt, president of the Rutland County Board of Realtors doesn’t foresee the housing boom going bust.

“Things have been pretty steady,” said Hewitt. “We’ve seen a more steadying of the market instead of a really fast-paced market.”

Last year, 1,526 single-family homes were sold in Rutland County, an 18 percent decline from the year before.

At the same time, with fewer houses on the market, the median price of a home on less than six acres jumped to $157,000 from $140,000 in 2005.

So far this year, Hewitt said sales are off slightly from a year ago. As Vermont mortgage costs rise, demand has slipped somewhat. As of March 14, there were 64 homes sold in Rutland County compared to 73 homes for the same period last year.

With the market moving from a sellers’ to a buyers’ market, Hewitt said “people are being a little more choosy,” hoping home prices will drop.

Prices have steadily appreciated over the past few years as demand rose, which put a squeeze on the available inventory of homes for sale. That’s now changed with more homes on the market.

While rising mortgage rates have played a supporting role in the decline in home sales, Hewitt said a more significant factor is simply the housing market going through its normal cycle.

“The market has to come down at some point,” she said.

In the Bennington area, Lynne Miro attributed part of last year’s slowdown to the tight inventory of available homes. The tight inventory also made it more difficult for first-time buyers to find an affordable home.

With the market softening, Miro said there are more homes for sale in the Bennington area. She also said that higher home loan rates, which remain low by historical standards, have not affected the market.

“I don’t think they’ve made a huge difference,” said Miro, president of the Southwestern Vermont Board of Realtors.

Real estate is always subject to the ups and downs of the economy. That’s particularly true for the market for second home buyers. In Vermont, the weather is also a factor, as many second homes have been built at or near ski areas.

According to property transfer records, statewide, 2,034 condominiums were sold last year compared to 2,623 units in 2005. The median price increased last year to $215,000 from $189,900 the prior year.

In the category of vacation homes (combined sales of less than six acres and more than six acres), 2,437 homes were sold last year, down from the prior year when 2,789 homes were sold.

The median price increased from $149,500 to $154,500 last year.

Meanwhile, foreclosure rates and delinquencies in Vermont are on the rise but remain below the national average, according to the most recent report by the Mortgage Bankers Association.

The spike in delinquencies is due in large part related to riskier sub-prime [bad credit mortgages] — loans made to borrowers with a blemished credit history that come with higher interest rates.

However, Chris D’Elia, executive director of the Vermont Bankers Association, doesn’t foresee a major problem.

“In Vermont, we’ve been very careful and responsible in regard to our mortgage lending practices. I don’t think we’re going to see an onslaught of sub-prime foreclosures,” he said.

SOURCE: Rutland Herald