Local real estate market showing mixed signals
ADDISON COUNTY — The good news, according to local appraisers, is that unlike many areas of the nation the bottom has not fallen out of the Addison County real estate market in the past three or four years.
The bad news? Well, just because the county is not as poorly off as say, overbuilt foreclosure centers like Nevada or Florida does not mean the market is booming.
Ferrisburgh appraiser Charlene Stavenow said sales indicate that prices in most segments are no more than holding their own.
“I think the market is stable still,” said Stavenow.
Certainly, there are some hopeful signs according to local Multiple Listing Service (MLS) data provided by Ferrisburgh appraiser and Middlebury town assessor Bill Benton.
According to MLS stats (the MLS system is operated through the Realtors’ organization):
• The median price of a county home sold through the MLS rose from $214,500 in 2010 to $235,000 through Dec. 28, 2011. The median is the point at which there are an equal number of sales of homes at lower and higher prices
• The total 2011 sales volume through Dec. 28 stood at about $63.8 million, compared to $44.1 million in 2010.
• There were 224 sold MLS listings through Dec. 28, compared to 186 in 2010, an increase of 20.4 percent.
• There were 554 MLS listings through Dec. 28 compared to 522, an increase of 5 percent.
• Time on the market shrank from 193 days in 2010 to 182 days through Dec. 28.
Benton drew two conclusions from those statistics: “It seems like there’s more activity, and indeed that’s the case,” and “That means supply and demand are getting closer,” a trend that would indicate a more balanced market between buyers and sellers if it should continue.
Regionally, there are also signs of modest improvement, according to a Dec. 21 National Association of Realtors press release that said existing-home sales in the Northeast rose 9.8 percent in November. Nationally, the increase stood at 4 percent.
SOFT IN THE MIDDLE?
On the other hand, appraisers acknowledge softness in the local market, especially in the middle price range.
Middlebury appraiser Bill Hinman said he recently talked to an experienced broker: “She said people were getting great deals this year.”
Hinman analyzed data that he said supports that point — the median price per square foot of properties sold. He offered figures that he said did not include homes that were unusually small or large.
According to Hinman’s calculations:
• In 2010, buyers paid $167 per square foot for homes that sold for between $150,000 and $199,999. In 2011, that figure dropped to $145.
• In 2010, buyers paid $149 per square foot for homes that sold for between $200,000 and $250,000. In 2011, that figure dropped to $133.
• In 2010, buyers paid $140 per square foot for homes that sold for between $250,000 and $299,000. In 2011, that figure dropped to $110.
“The median (sales price) might be up,” Hinman said. “But if you dig a little deeper, people are getting more bang for their buck.”
Hinman said that data does not contradict the increase in the median sales price in a market he calls “stagnant” overall because of a decrease in annual MLS sales from a more typical 250 to 300 a year.
“It doesn’t surprise me you’ve seen the median value go from $215,000 to $235,000, because there are a lot more people who would jump into that segment rather than the upper market segment,” he said. “You could still have declining market values and show the median price go up in one market segment, which is, in this case, the lower market segment.”
Hinman said another factor may be keeping the median sale price higher: Buyers are agreeing to pay list price, and sellers are then helping to pay buyers’ closing costs, often up to $5,000 or $10,000.
“In 2005 or 2006 we saw virtually no sales have concessions … (In 2011) we might have seen one out of six or seven,” he said.
But Stavenow noted a hopeful trend for that segment of the market.
“There are quire a few pending sales that are … 275 and under, which is great because there was a big gap there for a while,” she said.
And Benton said most appraisals he performs show that the softness has not translated into a decline in values, at least not in most cases.
“I’ve been appraising a few homes that I’ve come in 5 to 8 percent low, but I’ve appraised a lot where I’ve come in at the same number,” Benton said.
Meanwhile, the higher end of the market has shown some life.
“The $300,000-to-$500,000 market increased last year in terms of number and volume,” said Benton. “I think that interesting properties with unique characteristics sold well.”
Even the median per-square-foot data starts changing as the prices rise. Hinman’s figures show that in the $300,000 to $350,000 sales range, the number held from 2010 ($152 per square foot) to 2011 ($148 per square foot).
Some sales have reached the $700,000 range.
“Ferrisburgh has had a few sales in the high end that have helped the market during the year,” Stavenow said.
Certainly, the local market stands in contrast to one national trend. According to the Dec. 21 National Association of Realtors press release, “Distressed homes — foreclosures and short sales typically sold at deep discounts — accounted for 29 percent of sales in November (19 percent were foreclosures and 10 percent were short sales), compared with 28 percent in October and 33 percent in November 2010.”
According to RealtyTrac, Vermont had one in 15,712 homes in foreclosure as of September, compared to one in 118 in Nevada, one in 305 in Arizona, and one in 368 in Florida.
Stavenow said bad loans occur in Vermont, but remain rare enough not to make a major impact on the market.
“There have been a few more (foreclosures),” she said. “We have been lucky there haven’t been a lot.”
The appraisers did note some other trends in the county market. New construction remains limited, meaning land sales are slow.
“There’s probably a hundred home lots that are out there,” Benton said.
Stavenow noted sales on Lake Champlain have been quiet, while there has been some movement on Lake Dunmore.
Meanwhile, although Stavenow said there were a few good sales in Monkton and Bristol, the county’s largest town saw a relatively slow year.
“Middlebury has really, really not had the buyers that it usually has,” she said.
Overall, Hinman said smart sellers generally can get a fair price in a reasonable amount of time.
“Those people who are realistic about what they’re going to receive for their properties are selling them relatively quickly,” he said. “Those people who still want the big dollar, those properties have been on the market for upwards of two or three years in some cases.”
Stavenow saw some hope for the real estate market coming from some encouraging economic news, including decent preliminary retail numbers from the holiday season, and Vermont’s relatively low unemployment rate.
“I keep thinking there was a pent-up demand to go out there and do some shopping,” she said. “Maybe that is the beginning of some loosening up.”
Hinman remains concerned, though, that the economic recovery is fragile because of global inter-connectivity. Economic problems could also spell higher interest rates, he said, ending a time when rates have stood at historic lows.
“There are so many concerning elements globally that can impact our financial markets significantly,” Hinman said. “One default in Europe can send everybody into a tailspin.”
Improvement will probably be slow, Benton said, even with the numbers in the MLS system looking encouraging. He noted inventory remains high, and the market will have to catch up before property owners start to see their real estate appreciate again.
“I think it’s going to take a long time to change,” he said.
Andy Kirkaldy may be reached at email@example.com.
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