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Local real estate showing signs of life

THIS IS A rare sight in the Addison County market right now — a for-sale sign in one of the villages; this one is in Middlebury. Experts say demand is now outstripping supply, especially for in-town properties affordable for first- and second-time buyers.

A lot of things are selling in less than 30 days. A lot of them are selling at price, and we had one in Ferrisburgh that went at 6, 8% over the asking price.
— Bill Benton

ADDISON COUNTY — There’s good news out there for one segment of the Addison County real estate market, local experts said. 
Owners of homes in good condition in the county’s major villages or near Chittenden County can expect buyers, some of them from out of state, to line up quickly. 
“You put them on the market, and if they’re anywhere near the right price they’re gone in five days,” said Lynn Jackson Donnelly, a veteran Vergennes broker with the Berkshire Hathaway HomeServices Vermont Realty Group.
Amey Ryan, broker/owner of Middlebury’s IPJ Real Estate, echoed Donnelly.
“That $300,000 home in Vergennes, if it’s priced appropriately, will be gone within a week,” Ryan said.
Vergennes real estate appraiser and former longtime Middlebury town assessor Bill Benton said once COVID-19 showing restrictions were lifted in late April desirable homes started going for their asking price, or occasionally more.
“We’ve done a ton of sales in the last six weeks,” Benton said. “The demand side of the curve is still pretty strong. A lot of things are selling in less than 30 days. A lot of them are selling at price, and we had one in Ferrisburgh that went at 6, 8% over the asking price.”

TOUGH SEARCH
There’s a downside to this kind of sellers’ market: Even with historically low interest rates, buyers are frustrated. 
“That’s the hard part right now, finding reasonable housing for first-time, second-time buyers,” Donnelly said.
In part, Ryan said, buyers can’t find homes because some potential sellers are hesitant to market their homes, because in turn they worry they won’t be able to find houses to buy that they want.
“What’s happening is if you have local sellers looking to adjust their home size, to either bigger or smaller, if they put their house on the market and it goes under contract really quickly, there’s nothing out there for them to choose from to move to,” Ryan said. 
Data supplied by Benton points to demand keeping prices high, although 2020 county sales numbers are lower because the pandemic halted market activity completely for about six weeks. 
In the second quarter of this year 69 homes sold compared to an average of 107 in the same three months of 2018 and 2019. Brokers also note many properties now under contract will close in July. 
Benton also sees sales data supporting a 3% increase in market value, and the median sale price of county homes sold so far this year stands at $271,000, which is $17,000 more than 2019 and roughly equal to 2018.

INS AND OUTS
But those increased values might be selective. Benton cited homes in northern Addison County; Middlebury, Vergennes and Bristol villages; and Cornwall and Weybridge as in “desirable markets.”
Benton added homes that need TLC are not selling so quickly:
“I think that cost of construction and the cost of renovations are so high now that people want to have a move-in-ready house. We’re still seeing the really rough ones sit on the market a while unless they’re really discounted.”
Ryan agreed: “The harder houses to sell right now are the older homes that need a lot of work. But pretty much everything else is saleable.”
But a few older homes are selling. 
Donnelly said a segment of buyers want “elbow room” after being cooped up, possibly because they want distance from others and self-sufficiency given COVID-19 unknowns.
“They want their gardens. They want to put their clothes on a clothesline,” she said.
Benton backed that opinion: “The market last year was kind of slow for older farm houses out in the country, but we’ve had three or four of those sales occur in the last couple months, so that seems to be coming back now.”  

COVID-19 LOOMS
The specter of COVID-19 has hung over the real estate sector, just as it has over every other part of the economy. 
In-person showings and appraisals were called off in late March through late April. Brokers must question clients and customers about their health and possible contacts with others exposed to coronavirus, and log answers to allow for contact tracing. Home showings require formal sign-ins, owners must leave the scene, and brokers meet buyers at homes, with no ride sharing.
And brokers have seen out-of-state buyers looking for safer, low-COVID territory from which they can telecommute, although Ryan said it’s not been at the “frenzy” level seen in southern Vermont. 
“My sense is about 50% of the people I’m working with right now are from out of state. It might be slightly higher than that,” Ryan said. 
Donnelly said most of her buyers are looking to move locally, but she knows many others are helping out-of-state buyers.  
“There are a lot of lakeshore buyers who want a second home that could be full-time,” she said. “I think they’re almost positioning themselves so if there’s another crisis in New York City or Boston that they can say they’re done, I have a permanent house in Vermont.”
Two pending sales Donnelly knows of are high-end, one on the lake for more than $1 million, and another in Panton with lake views for $800,000 — and that property was sold based on video tours.
But the greater effect of the pandemic might be on the inventory end, Ryan said. 
“There were some sellers who said, ‘You know what, this is too much for me. I’m an at-risk person, and I’m not going to have people in my home,’” Ryan said. “And then there were other people who said, ‘Oh my God, everybody is going to want to move to Vermont from a big city. So let’s get my house on the market.’”
But more are probably waiting, leading to that sellers’ market. Donnelly is concerned that first-time buyers, or buyers who want to trade up and open up inventory for those first-time buyers, are going to get frozen out of the market.
She spoke of one family she’s worked with for a month, and she has seen homes that have picked up multiple offers before she can show them to her customers. Donnelly doesn’t want buyers to feel forced into hasty decisions. 
“We want our young people to get into reasonably priced housing and stay there and be able to raise their families,” she said. “I encourage people to keep looking and not get discouraged. If they have time to think about it, if there’s any hesitation, they need to stop and think about it and not rush into something that may be, long-term, a mistake.”

LOOKING AHEAD
As for the future of the market, especially with the pandemic, the experts said there are too many uncertainties to make sound predictions. Nevertheless, they could point to positives as well as negatives. 
Ryan said in past downturns, foreclosures didn’t prove to be a big problem in Addison County and Vermont, but she could see the pandemic stressing more homeowners. 
“This is different. I do think it will have a wider impact,” Ryan said.
Donnelly said the second quarter gives her hope, as do the number of “essential jobs” people hold in Addison County. But she acknowledged larger factors could come into play.
“It’s impossible to predict with all the things that are going on in the world,” she said.
Benton said he expects Collins Aerospace to continue to be an economic plus for Vergennes, the influence of out-of-state and Chittenden County buyers to help boost market demand, and noted values have been steady or rising for decades.
But the pandemic’s unknowns and its effect on the larger and local economies, including economic drivers such as Middlebury College, give him pause. 
“I don’t have a crystal ball,” Benton said. “I’m not really sure. It depends.”

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