The New Year brings reflection, assessment and strategy on all fronts, including real estate. Lamoille County and Stowe, VT set records in terms of the number of residential real estate transactions in 2014 - the most units sold, ever. This amount surpassed the number of transactions seen in the irrationally exuberant times of 2006. So everybody proclaimed in 2014 that the real estate market was fully recovered (the Stowe Reporter said so six month into the year when the market only had 8 more units sold than the same time the prior year - bold move).
Truth be told, the high-end market ($1.5mln) sputtered out of the gate and was a late arrival to the transaction party, almost all of the closing above $1.5mln started after September 2014. The fuel of low interest rates, the Vermont lifestyle selling at a premium and a lagging recovery on real estate prices made 2014 active, very active. This positive forward looking data seemed to go against the dower assessment of the State's economic condition as often written about by Art Woolf, a UVM associate professor.
His premise was that the US Census data showed that Vermont's population was diminishing and this is the cause for us having the second lowest unemployment rate in the country - not job growth. This loss of people would put greater pressure on those left to pay taxes, etc. and this would create an economic downward spiral for Vermont. (Detroit, but with mountains and landscape.) I largely agree(d) with his economic conclusion for the everyday resident. However, we all know Vermonters like to keep Vermont weird (that is Vermont doesn't always comport with economic trends). How could we be selling so many houses if the usual economic drivers of Vermont were failing (Vermont hasn't created a net new job since 2010 and has only seen decreases in the disposable spending of its population - come on Montpelier, get your act together!!).
Then "it" came out. Moving companies have some of the best data at projecting future trends in residential real estate. United Van Lines conducted research on where moving company's moved the most people to in the United States. VERMONT WAS THE FOURTH MOST POPULAR STATE TO MOVE TO IN 2014!! This isn't interest rate movement fueling demand - this is a structural shift in buyer mentality. Vermont cool is selling at a high right now. This begs the question, if we had enough activity last year to drive record sales then what happens when all the real estate search engines say Vermont homes searches are up over 100% from the same time one year ago (Stowe is up almost 200% from last year)?
This is the kind of structural demand change that will buck modest and controlled interest rate increases - which are coming. This is also the kind of demand change that moves prices. Vermont usually never sees large gains or losses in real estate values; take the national average, divide by two or three and that is usually where Vermont finishes. Add in factors like most all the reasonably priced houses were bought up in 2014 creating a lack of supply and it points to real estate prices increasing in the near future. Therefore, our prediction is that home prices will increase 4.5% in Vermont this year with the premier areas experiencing even greater pricing increases. Increasing interest rates will keep market pricing from accelerating at a greater pace. We also predict that 2015 will set another high water mark in total transactions.
If you would like to know where these buyers are coming from and what they are looking for, please call 802.585.1131 or e-mail firstname.lastname@example.org. This buying trend is being fueled by the only population demographic in the state to outpace the national average. These folks are flocking to Vermont!!