Jenn Moore’s family started preparing to move in December. Her family’s lease was coming to an end in the spring, and they were ready to buy. They got preapproved for a loan and began shopping.
Come March, the Moores still haven’t found a new home because of Burlington’s extraordinarily competitive housing market.
“We’ve put in three offers since December. So, basically one every month,” Moore said. “We’ve been outbid all three times. Twice on fixer-uppers.”
Burlington and the Chittenden County region are in the midst of a real estate market boom, largely brought on by the pandemic. Real estate agents say they’ve never seen such competitiveness in Burlington before — reasonably priced homes are selling within days, sometimes before they’re even formally listed.
But other people are expressing concern that the market has become so competitive that it’s driving up prices and squeezing out middle- and lower-income families who can’t afford to live in the city. That has been a perennial problem for the Queen City and is only becoming worse.
Moore’s family moved to Burlington a few years ago. Now that they’re ready to settle down in the city, and the house they currently lease is coming off the rental market, Moore said now seemed like the best time to try to buy instead of continually renting. Moore and her family are trying their best to stay in Burlington, primarily because she wants her kids to continue on in the school district. But that commitment is becoming more and more difficult to uphold.
She said they’re doing everything they can to find a three-bedroom, single-family home that’s under half a million dollars in the city. They’re working with a buyer’s agent who has been sending postcards to certain neighborhoods, trying to coax residents to sell. Moore has been contacting renters on Craigslist and posting on social media, hoping to find a potential seller before they formally list. They submitted offers of $30,000 over the asking price — on two different houses — and were still outbid.
One tactic Moore said she’s seen buyers use, which isn’t an option for her family, is that they’re waiving appraisals. These are buyers who don’t need an appraisal from a bank to fund a loan because they can make an all-cash offer — a more enticing option for sellers.
“It’s been crazy,” Moore said. “For me, personally, I’m not willing to make a bad investment just to get into the market right now. I’d rather rent for another year and hope that it chills out.”
Staige Davis, president of Four Seasons Sotheby’s International Realty, has been involved in Burlington real estate since the 1980s. “We have never had a boom like this,” he said.
His firm serves both Vermont and New Hampshire, and Davis said Burlington is not unique — rising sales are reporting in all of the markets he oversees.
From January to early March, Davis’ firm reported a 17.6% increase in Burlington home sales compared to the same time period last year — and a 55.6% increase in home sales from the same quarter in 2019.
Home prices are on the rise too. The average selling price for homes sold this year through Davis’ firm was 19.4% higher than 2019 sales. For 2020, Four Seasons said its average Burlington home price peaked at $525,000 in August. As of February, the average rested at almost $400,000.
These trends reflect what’s happening nationally. Housing supply has been decreasing, but demand is up, causing home prices to rise as mortgage rates hit record lows in 2020. The New York Times reported that the national median home price rose 14% this year, and 35% of homes sold for more than the asking price.
The demand in Burlington’s market is partially being driven by people migrating from big cities and other densely populated areas, as working from home becomes more ubiquitous, and families are yearning for more space. Davis said his firm still primarily serves locals, but it has seen an uptick in out-of-staters.
So has Steve Lipkin, a real estate agent who specializes in the Burlington market for Coldwell Banker Hickok and Boardman. He said he’s definitely seen an increase in buyers from out of state. These days, he says, about 70% of his buyers are local, and 30% come from outside Vermont.
“We’re seeing an uptick in out-of-state buyers who are now able to work remotely and want to take advantage of all that Vermont has to offer,” he said.
He also reports an increase in first-time homebuyers who are taking advantage of low mortgage rates, as well as investors who are buying up apartment buildings in Burlington.
He said he thinks the competitiveness of Burlington’s market shouldn’t dissuade buyers if they think strategically about their budget. Buyers won’t be able to find a house for less than $400,000 in Burlington’s hill section, he said, but they might be able to find a more affordable option in the New North End or Old North End. Lipkin said more listings typically come online in the spring, which could offset some of the high demand that’s driving up prices.
While this market is advantageous for real-estate firms, Lipkin said he’s concerned that these market conditions are driving unaffordability in the area.
“We need good workforce housing,” Lipkin said. “We can’t have restaurant workers, teachers and firefighters having to live a half-hour outside of our communities.”
He said the city government should encourage more development, and residents should welcome new projects. He pointed to the downtown CityPlace project, which has drawn continued opposition from some locals. While that project will primarily cater to a middle- to high-income group of people, he said every development project is required to build a certain amount of affordable housing units, which will benefit the city.
He’s in agreement with Michael Monte, CEO of the Champlain Housing Trust, an affordable housing organization. Monte also thinks the key to making housing more affordable in Chittenden County is to build more of it, specifically for low-income families.
Monte couldn’t say whether Burlington’s booming real estate market is making housing affordability worse. Chittenden County, which has a renter vacancy of 1.9% as of 2018, can’t get much worse when it comes to competition for housing for both low-income buyers and renters, he said.
“It’s been bad; it’s still bad,” Monte said.
There have been glimmers of hope from some housing programs available through the first federal stimulus package Vermont received, Monte said. That money funded the expansion of some of Burlington’s homeless shelters and propped up rental renovation programs to get more units online. More aid will be coming in the second stimulus package.
Middle-class families are affected the most by the competitive housing market, Monte said. They’ll have to make adjustments and sacrifices about how they go about buying a home in a market in which high earners hold the advantage, he said.
Still, Monte said, “the truth is, middle-income folks still have more choices.”
