A series of interviews also suggested that Vermont has at least a perception problem among wealthy homeowners and buyers — like those who fueled a sustained second-home boom a few decades ago. The impression is that a golden era of growth in sales and rising property values may be gone forever — especially relative to second homes in vacation spots like the Northshire.
But as 2016 drew to a close, the residential market in Manchester and Dorset was “still a buyer’s market,” according to Annie Bessette, the principal broker with TPW Real Estate, but the statistics for the year reflected at least a modest rebound over 2015 and a surging level of interest in local properties.
“What we are seeing is a pretty good level of activity over last year,” Bessette said.
That said, high end residential property values have dropped and sales of more expensive homes is slower than mid-market housing.
Overall, the number of residential sales was higher through early December than at the same point in 2015, she said, and there were 23 homes under contract at that point.
While the local market has been exhibiting hopeful signs, Bessette said home values, which have softened for several years, are not yet rising significantly. For that to happen, she believes the area must create a more robust economy with more employment opportunities.
On major draw for young families considering a move to the Northshire, according to her, is choice concerning where to send their children to school. Uncertainty arose last year as a result of proposed changes to the regulations for private schools to be approved to receive public tuition money. But the state is now working to clarify draft rules that education officials say had been misinterpreted.
Overall, Bessette said, “I believe in the value of our real estate. The quality of life is hard to beat. Keeping educational opportunity should be a priority.”
Real estate professionals were unanimous in saying they constantly field questions from potential homebuyers about school choice and other options available through private schools like Burr and Burton Academy.
“We are having increases in sales and in the sale prices,” said Carol O’Connor, regional supervisory broker at Four Seasons Sotheby’s International Realty.
She said that for 2016 through early December, the number of home sales in the two towns was up over the same period in 2015, and the average price per sale was up from $326,000 to $370,000.
In addition, O’Connor said there were 167 homes on the market in early December, but that figure “had been hovering over 200 for the past couple of years.”
“There is a lot of interest in the lower range, $300,000 and under,” she added, and home prices above $1 million “have come down drastically,” encouraging potential buyers.
Bessette said the market for homes under $200,000 has been especially warm in the two towns, with 14 such sales in the year ending in mid-December 2015 and 27 through the same period ending in December 2016.
A shrinking inventory of homes for sale also tells a story, those interviewed said.
“We have an inventory that is not overly excessive compared to our market historically,” Bessette said. “We have been keeping pretty busy since last winter and spring. We started getting busy, and it really hasn’t let up.”
Another sector that is hot, O’Connor said, involves smaller, more efficient homes, as opposed to some of the larger estate properties popular a decade or more earlier.
“There is a lot of interest all over in green buildings,” she said. “It is not necessarily that bigger is better. Sometimes smaller is preferred.”
Laura Beckwith, principal broker/owner of Josiah Allen Real Estate, said in December: “We currently are showing more contracts for this (winter) season than in past years. We haven’t seen this level of activity at this time of year in a decade.”
The home market has “been pretty steady for the last couple of years,” she said, although 2015 “was definitely an off year.”
That was reflected in part, Beckwith said, in overall sales and in high-end transactions for homes selling for more than $1 million. There was only one sale at a million-plus, she said, and that came in December 2015 and involved a “considerable discount.”
Total real estate sales also were down in 2015 but rebounded in 2016 and should top 2014 sales figures.
For the region, it has been several years of stagnant or slipping sale prices, Beckwith said, and that had improved in late 2016 but hadn’t stabilized. “It did not get to the bottom,” she said, “but I believe we are there at the present moment. That may be why there is such interest in our area.”
Most buyers who are looking in the Northshire, she added, “are demanding buyers who have been watching the market,” who constantly check local values through online services and are “very, very astute and will not generally overpay for something.”
That factor, Beckwith said, also helps keep sale prices from rising as they did in the past.
There is “more action” in the under $500,000 price range, she said, while “it is sluggish in our middle, which is $600,000 to a million.”
Above $1 million “we are getting a whole lot more interest in some cases,” she said, including more than one bid on a property in a couple of instances just after the fall foliage season.
Some sellers, for varying reasons, are now willing to accept a lower price, she said, possibly related to their retirement plans or for tax-related reasons. Owners of properties in that price range — especially when it involves a second home, as is often the case — are not in the same position as someone who must sell a home or wants to hold to a certain price threshold, she said.
“It is a different set of players when it comes to that market,” Beckwith said, adding that most have their primary residences in other states with lower overall tax burdens.
In the $300,000 to $500,000 range, she said, “what I am seeing is some local families are having a harder time finding a home. It may be that they have taken a little too long and maybe studied too long and the selection is getting thinner.”
Statewide trends
Staige Davis is CEO of Four Seasons Sotheby’s International, which has 20 offices in Vermont and New Hampshire. Davis said local markets around the region have varied depending on local conditions, with some more robust than others.
“I’m optimistic about the market,” Davis said. “Vermont doesn’t have booms but also doesn’t have busts. I think there is a lot of uncertainty, but I think 2017 will be a lot like 2016.”
The past year showed increases in the number of sales statewide, he said, and in prices through early December. “There is clearly more activity,” he said, including both completed sales and sales under contract at that point.
As a comparison, there were 708 sales in the state in November, compared with 577 in November 2015 and 550 in the same month in 2014.
There were 6,780 homes listed for sale in November 2016, down from 7,941 the prior November. Sale prices averaged $255,000 statewide in November, up from $236,000 in November 2015.
The listing price average was $370,000 in November 2016 and $353,000 in November a year earlier.
Asked about the market for homes selling for more than $1 million, Davis said there were 10 sold in November statewide, compared with five in November 2015, and there were 12 pending sales in November, up from four in November a year earlier.
The number of high-end homes on the market was 344 in November 2015 but was down to 319 this past November, and the average price for $1 million-plus homes was just under $1.4 million in November, down from $1.67 million in the previous November.
Davis said that when interest rates edged past 4 percent, many potential buyers seemed suddenly to “decide they don’t want to wait any longer.”
One of the major factors holding real estate markets in check in Vermont, he said, is that the state was ranked by Kiplinger’s magazine and other observers as “one of the worst areas to retire,” because of taxes, state regulation and other factors.
Many wealthy people strictly limit their stays at homes in Vermont to less than half the year, he said, to maintain their primary residence in another state.
By living in Florida or other states, people “save tons” on taxes, he said.
