Is This a New Normal?
For most of last year, many wondered when the COVID-driven demand would come to a halt. Many projected a sharp decline once the pandemic ended, as people would recede back to metropolitan centers. Such a shift has yet to occur. While COVID-driven demand remains strong, the emergence of climate refugees has buttressed an already strong market. From a pandemic perspective and an environmental one, Vermont has been one of the most attractive states in the country for buyers.
All of these factors beg the question: is this the new normal? Is there no end in sight to what appears to be endless demand for properties that would have been considered drastically overpriced just 24 months ago?
Three Indicators of the Market (Sales Over $1M) and Where They Stand…
Days on Market, Sales Volume, and Gross Sales Volume all tell us that the market remains incredibly strong with no signs of slowing. The numbers below compare YTD numbers to pre-pandemic years prior to 2020 (between 2016-2019).
HIGH-END $1,000,000+ MARKET HIGHLIGHTS
- Inventory down 47% (152 vs 245 last year).
- Sales volume up 16% YTD (record 325 vs record 285 last year).
- Top sale: $33,735,317 486 Edson Hill Road, Stowe.
- Vermont’s high-end market continues to perform strongly despite record low inventories.
- COVID-driven demand for refuge and home-work balance remains a factor in the market, as does the strong stock market. As usual special properties, expertly presented, reaching out to a broad market with a strong value proposition, will have a competitive advantage
Limited Inventory and Its Effects on Pricing
Inventory remains very constrained due to the hot market over the last 18 months. Pre-pandemic inventory typically oscillated between 285 and 335 active listings above $1 million statewide. Current inventory above $1 million statewide stands at 152.
The combination of low inventory and high buyer demand has further increased pricing from 2020, which was a previous record!!
So far in 2021, our sales volume has already blown past our previous records in 2020. YTD our sales have surpassed last year’s totals by 16%. This percentage will likely increase to upwards of 20% by year-end. If the COVID-driven demand for refuge properties and a work-from-home lifestyle continues (as signaled by a backlog of 65 properties under agreement), 2022 promises to be another record-breaking year.
Year to Date 2021 – Top Sale
Property: 486 Edson Hill Road • Town: Stowe • Selling price: $33,735,317
This record sale included 185 acres and two homes. This same property transferred in 2018 for $10.5M.
Days on Market
Days on Market (DOM) is one of the leading indicators of current market conditions. In 2020 and 2019, we saw 187 and 190 average days on market, respectively. What is the number in 2021? 102 days on market YTD! That is a staggering decrease relative to historic norms. Between 2016 and 2020, we saw an average of 229 DOM.
Notable Sales per Town – There’s Stowe and Everywhere Else
The strength of the market and the breadth of that strength is well documented. However, when one begins to examine sales volume at town level, one statistic becomes clear: it’s Stowe and everyone else.
Stowe’s high-end market continued to see record-breaking activity so far in 2021. There were 53 sales above $1M to date and the majority of these sales traded at or above the list price. Multiple offers were a common occurrence. The average Days on Market in 2021 has decreased by nearly 80%, which is another indicator of the continued demand for luxury homes in Stowe. We are seeing buyers from all over the country, especially from the west coast where people continue to feel the profound impact of climate change, including the threat of forest fires and water shortages. Low inventory continues to be a challenge.
Waterfront sales on Lake Champlain have in the past been a major contributor to the high end sales in Vermont and this year has proven to be no exception. So far this year, there have been 29 sales of Vermont Lake Champlain waterfront properties over $1 million with 6 over $3,000,000 including this year’s record sale of $4.5 million in Charlotte.
Inventory, on the other hand, sits at a record low with only 7 houses on the lake for sale over $1 million. For the first time in over 30 years, there is no significant lakefront property for sale in Charlotte and only one for sale in Shelburne as of November 15th this year. This is a historic low.
Farms and Country Properties
The hubs for prime country properties: the towns surrounding Woodstock in central Vermont, and those near Manchester/Dorset in Southern Vermont, have also benefited by demand from both out of state and from upgrades by local owners.
LandVest’s direct sale at $7.1 million for a fully furnished estate in the mountains near Killington is a new high water mark. The buyer was from out of state, and a first time Vermont purchaser. What is particularly remarkable is the sheer number of country property sales at big numbers. Where a more “normal” year, such as 2019, yielded 18 sales over $1 million, there were 55 sales in 2020 and 72 sales in 2021.
The lack of properties to offer to eager buyers remains the primary constraint. It is also worth pointing out that Vermont remains a value, given that prices for special properties have, even with the COVID bump, not moved substantially above levels pre-Great Recession.
Mendonhall, selling totally furnished for $7.1 million, set a new benchmark for country properties in 2021.
With continued strong demand, properties that do come on the market see multiple buyers competing, which very often drives prices above the asking price.
We await 2022 to see what will become of this quite unprecedented market here in Vermont.
Ruth Kennedy Sudduth
201 DORSET STREET | Charlotte, VT | $2,595,000
906 SHERMAN ROAD | Waitsfield, VT | $3,950,000
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