In 2023, Vermont’s real estate market continued to show resilience in the face of changing economic conditions. While home prices have continued to rise with buyer demand holding steady, the number of homes sold has fluctuated. This has primarily been due to the inventory shortage. As mortgage rates increased mid year, homeowners have found themselves in a golden handcuff situation where they are reluctant to sell and lose their lower rate. This issue has been ongoing and has exacerbated the issue of low inventory across the state.

Last year posed several challenges for many aspiring home buyers, especially first-time buyers. However, 2024 may be a better year to purchase a home - at least for some. Here are some factors to consider:

Home Prices.

While home prices will likely remain elevated, we are witnessing a slow down in Vermont’s home appreciation. As you can see in the graph, the pandemic years kicked off a significant spike in home values for single family (green) and condos (blue) alike. Between 2021 to 2022, sales price increased 15.6% while last year only experienced a 6% increase compared to 2022. We start the new year with the median price for Vermont single family homes at $387k, and condos at $355k. This softening offers a welcomed chance to catch your breath and evaluate your financial strategy in order to make a move.

Inventory.

Arguably the most significant challenge facing buyers across Vermont is low inventory, especially for those seeking single family homes. As you can see in the graph, while condos (blue) have experienced a slight dip, single-family homes (green) has been in decline since 2019. Across Vermont, there were 8,104 listings available last year which is 12.9% fewer when compared to 2022. Despite Vermont ranking #1 last year for most inbound movers, the number of homes available has been in decline for years.

Predictions for 2024:

Inflation will be the Wild Card for this upcoming year. As said by Danielle Hale, chief economist at realtor.com, “if inflation doesn’t continue to improve, it could raise long-term interest rates, which then could discourage more homeowners from selling and prolong the inventory bottlenecks in the market”. While economists are optimistic that the Federal Reserve has completed its rate-hiking campaign to lower inflation, we must keep a watchful eye on inflation over the next few months.

Buyers: Now is the time to get an experienced agent in your corner. With network connections, market knowledge and experience negotiating, you’ll have more access and advantage in making smart buying decisions in a competitive market. Despite the competition, there are still opportunities for savvy buyers. Be ready to prioritize your goals, act quickly, and be prepared to make strong offers.

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Sellers: The market remains favorable to sellers, with tremendous opportunity still within reach. Current homeowners are in an envious position. With rapid appreciation in recent years (6% last year alone), homeowners will continue to grow their equity and now have more opportunity for leveraging into a new home or renovations. Keep in mind, we may see further softening in home prices throughout 2024 so if you are planning a move, you may want to consider sooner rather than later.

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Chittenden County:

Single-Family Home statistics sourced from NEREN.com

In Burlington, last month saw only 6 new single family homes brought to market. There were 7 homes sold with 7 median days on market at a median sales price of $660K. Comparing this data to the same period last year, there was a remarkable 64.7% decline in homes available, while the median sales price showed a notable increase of 11.2%.

Across Chittenden County, there were 40 new listings and 78 sales for single family homes in December. The median days on market was a bit slower than usual at 12 days while median sales price has climbed 2% compared to this time last year.

Lamoille County:

In Stowe, there were 11 new single family homes listed with 7 sales last month. The market was certainly impacted by the holiday lull with median days at 87, with the median sales price at $1.25M. Compared to this time last year, there are 22.2% fewer homes sold.

Across Lamoille County, there were 19 new listings with 11 sales in December. Year over year, there were 52.2% fewer homes sold while the median sales price increased 41.1%.

Washington County:

In Montpelier, only 3 new homes were brought to the market last month with 3 sold in December. The median sales price stood at $500K. Based on last month’s sample size, there appears to be a 50% reduction in the number of homes sold, while the median sales price is up 9.9%.

In Barre, there were 14 new listings and 14 closings for single-family homes. Despite the holiday season, last month saw a relatively brief median 10 days on market. The median sales price was $300K, a 12.6% increase year over year.

In Waterbury, there were 0 single family homes available while 1 sold in December. The median sales price was $635k. There was not enough data last month to compare year over year.

Across Washington County, there were a total of 26 new single-family homes listed and 35 sold. Contrary to patterns seen across Vermont, the number of available homes had actually increased 8.3% compared to this time last year.

Franklin County:

Across Franklin County, there were 26 new single family homes brought to market. December saw 38 homes sold with a median 15 days on market. Similar to Washington County, Franklin also experienced an 18.8% increase in the number of closed sales compared to this time last year. While statewide and even national trends are true for the majority of markets, it’s clear there will always be those few exceptions.

Grand Isle County:

Across Grand Isle County, last month saw only 1 new listing and 6 homes sold. The median market time was an unusual 55 days and sales price was $465K. Based on this month’s sample, there were a startling 87.5% fewer homes available and median days on market almost 200% longer than this time last year.