Editor’s note: This article is by Lisa McCormack of the Stowe Reporter, in which it was first published on Thursday, Jan. 22, 2015.
[S]towe’s million-dollar home market took off during the last quarter of 2014.
Three homes priced over $2 million sold during the three-month period, along with three homes priced between $1.5 and $2 million.
Overall, Stowe reported 14 sales of homes priced at $900,000 or above, making 2014 the strongest year in the luxury market since 2009. All but two of them were cash sales.
Stowe real estate continued the trend of year-to-year gains that began in 2011. Sales of residential units rose 9 percent — 89 compared to 82 in 2013.
The average sales price was $598,870, up 10 percent compared to 2013. The median price — the point at which half of homes sold for more, and half for less — rose 30 percent to $485,000.
The market shows no sign of slowing down, according to area Realtors.
“Last year was a very busy year, but it wasn’t as busy as it’s been over the last three months,” said Ken Libby of William Raveis Stowe Realty. “Since Nov. 15, it’s been off the charts for everyone in town.”
“We’re finally seeing a really strong and stable market, one that has shed a lot of the problems that the entire country has had since 2008 and is showing potential for long-term growth.” said McKee Macdonald, a broker with the Smith Macdonald Group of Coldwell Banker Carlson Real Estate.
Stowe sets the tone
Stowe remains the pace setter for median and average home prices in Lamoille County; it runs over $200,000 ahead of the county in median sales and $330,000 in average sales.
Homes sold close to their town-assessed value. Homes priced below $500,000 sold, on average, for slightly below their assessed value and homes priced over $500,000 sold for slightly above their assessed value.
Homes that were priced appropriately typically sold for within 7 percent of the asking price, according to Libby.
Condominium sales increased to 43, up 8 percent from 40 in 2013, though the median price decreased to $265,000.
“Condominiums are always the first to take a hit and the last to rebound,” Libby said.
Most buyers are looking for renovated units in popular complexes with reasonable homeowner association fees.
Land sales decreased slightly to 18, compared to 20 in 2013, while the median price increased 7 percent to $182,000.
Buyers are less likely to buy land and build new homes when the existing housing inventory is plentiful, real estate agents say.
Sales, both of luxury homes and those priced under $500,000, were spread out throughout town, from Stowe Hollow and the Nebraska Valley to Mountain Road to neighborhoods in the village and off Mansfield View Road.
Who buys where?
Different types of buyers are attracted to different areas, Libby said.
“Primary residents are more inclined to buy a little farther from the village and the mountain,” Libby said. “For them, it’s more about the house and neighborhood. The investor wants to be as close to the mountain as he can get. The second-home owner wants to be midway between the mountain and the village.”
The inventory of available homes increased 18 percent, with 99 units on the market at the end of 2014. Based on the pace of sales, that translates to a 14-month housing supply. Nationally, a six-month supply is considered a balanced market.
“We’d like to see it down to 70 or less,” Libby said. “In the meantime, it’s headed in the right direction.”
A good investment
Second-home buyers accounted for the majority of Stowe’s residential sales in 2014. Libby estimates second-home buyers drive about 60 percent of the sales at his office.
But an increasing number of sales have been to people looking for investment properties.
“We’ve had a number of people looking for investment opportunities approach us over past few months to diversify their real estate portfolios,” Macdonald said. “It’s not something we’ve seen in the past four years here.”
Most buyers of properties priced below $500,000 were primary homeowners.
While the luxury market improved last year, homes priced between $1 million and $1.5 million generally sold for 13 percent below the asking price.
“If you own a luxury property, it doesn’t mean prices are going up,” Macdonald said. “It means there are buyers who could be able to purchase your house.”
A number of luxury homes are overpriced, especially if they require updates and don’t sit on a spectacular piece of land, Macdonald said.
“Those houses will continue to struggle in our market,” Macdonald said.
The rest of Lamoille County
Stowe sales accounted for 60 percent of the residential real estate transactions in Lamoille County last year.
The Lamoille County market outside of Stowe has been slower to recover from the recession. While the number of residential sales increased by 11 percent, from 168 to 178, the median price decreased 3 percent to $188,000.
At the same, the number of units sold for $400,000 and up doubled, from five to 10.
A lack of buyers outside of Stowe makes it difficult for homeowners who want to trade up from properties priced between $250,000 and $300,000, but must sell their homes to do so.
“During the height of the market, people were priced out of Stowe and bought houses there,” Macdonald said. “Now, they’re looking to move out and prices have remained stagnant or not recovered. It’s a vicious cycle where, until we see an influx of buyers, things won’t improve.”
Advice for buyers/sellers
Sellers looking for a quick sale have to make an effort to impress buyers at first sight.
Most importantly, sellers need to price their properties competitively, according to Libby.
“Homes priced well sell quickly,” Libby said.
He gives the example of two neighbors with comparable homes who put them on the market at the same time.
“If you overprice your home, you effectively help sell your neighbor’s home,” Libby said.
Most homes priced below $500,000 need renovations and the cost should be factored into the asking price, Macdonald said.
Meanwhile, people looking to buy should look at lots of properties online and in person, so they develop a sense of the market and are able to recognize a good value when they see it.
They should have their finances in order, so they’re prepared to make an immediate offer. They should look at selling prices for the past year to help figure out a fair price.
“Educate yourself to the realities of the market,” Macdonald said. “Everyone goes to parties and everyone talks about real estate, but unless you’re dealing with an expert you don’t have a true picture of the intricacies.”
It’s important to understand what’s available at your price point and a little above and below it.
“When you deal with your price point, you can generally find something that’s workable,” Macdonald said.
If you see a property you’d like to buy, you should be prepared to move quickly.
“Everything we see so far says it will be a very good market in 2015,” Libby said. “The National Association of Realtors expects a 15 percent increase in units sold (nationwide).”