Archive for the 'Market Conditions' Category

Without question the most common question we get several times a day is, ” how is the real estate market?’. Well, we live in Vermont and that is not an simple question to answer. We certainly can’t refer to Standard and Poor’s Case-Shiller Home Price Indices to track how the residential housing market is doing in Vermont. There is simply not enough data available even in the best of times. In the market we have been in over the last 24 months, data needs to be generated and analyzed by brokers wishing to have a handle on the current conditions. Here at Vermont Country Real Estate, we work throughout the entire state of Vermont which allows us to keep a pretty good handle on just how the market is doing.

So, how is the real estate market in Vermont?

Glad you asked, the last few months have shown some very interesting trends statewide. The 2008 and 2009 real estate market in Vermont was by and large very flat. Most all sectors of the marketplace experienced a very strong slowdown. Curiously, here in Vermont this does not necessarily mean that the prices have gotten too high, but rather that the buyers are very few and hence what sales do occur do not offer enough data to draw conclusions. The usual response nation wide to a slow market is to lower the pricing and trigger a response from the marketplace. But again, we have not had sufficient buyers statewide to guage if that is going to elicit an upswing in the market. Fortunately, the marketplace here in Vermont is showing a very strong resurgence. Discussions with brokers statewide confirms that inquiries on properties by way of phone calls, emails and appointments for showings are definitely improved over what it has been over the last couple of years. And yes, this is translating into properties going into contract and closing.

What about pricing?

Clearly there has been a need for many properties to have a price adjustment to reflect current conditions. Many properties have been on the market for a very long time. A property that has been on the market for over a year does not necessarily mean that it is over priced. However, the effect is that many of the newer listings coming on the market are taking into account the fact that to be competitive they must be priced well. This is where experience and understanding of the market come into play. As the marketplace is gaining strength, the pricing is still reflective of a slower time. Now is the time to be looking if you are seriously considering buying in Vermont. The properties that have been on the market in many cases have had price adjustments that make them very attractively priced. New listings tend to be what I can only term “reactionary”.  The listing brokers want to create market interest and the sellers are usually only too aware that a correct listing price is the only way to gain that.

So in short, we seem to be having a marketplace where interest and sales are taking place while listings are reacting to a slower recent past. This is creating a condition that will only exist for a short period of time. Given the activity we are experiencing so far this spring, we should see a much stronger real estate market through this spring/summer season than we have seen in a long time.

Posted by Wade I. Treadway

The most common comment I hear from people looking at real estate in Vermont is how Vermont looks and  feels so special and unique. There are many reasons for this beyond the obvious beauty of the State, the friendliness of its people and the varied cultural and recreational opportunities. Many of the reasons are a bit subliminal such as no billboards, the cleanliness and it’s iconic small villages. But there is also a solid foundation of legislative tools that have been implemented over the years to make sure that Vermont doesn’t make the mistakes of other once pristine regions and states.

In my opinion, there are three legislative acts that have been instrumental in preserving that which we hold dear in Vermont. They are Land Gains Tax, Act 250 and Current Use Program. All were established in response to conditions that were seen to be detrimental to the health of Vermont. In essence they all are closely linked to land development  in Vermont.

The Land Gains Tax

The Land Gains Tax was established at a time that development was rapidly growing in response to the need for second homes for primarily the ski industry. In essence, it is a fairly simple principal that makes it very difficult for anyone to buy a parcel of land, subdivide it and quickly sell off the individual lots at a large profit. It is a digressive tax that expires after six years. It is based on the length of time the property is owned and on the percentage of profit. This has stopped the quick exploitative speculation that has ruined vast amounts of land throughout the country.

Act 250 is the permitting process that is triggered by subdivisions and development in the state. when first enacted in the 1980’s, it was a very daunting process. However, over the years it has been streamlined to not overly burden a developer and to carefully review all development to protect Vermont’s water resources and environment.

Current Use Program

Current Use Program was developed in the late 1970’s to help farmers and land owners with their property taxes by basing the valuation of the land on its productive value versus it’s traditional highest and best use value. To qualify, a landowner must own a minimum of 25 acres of forest or farm land, and in some cases, less farmland is required. A management plan is developed by a forester and then approved by the county forester. By keeping land in Current Use, a landowner gets a substantially reduced tax burden. The landowner cannot develop land in Current Use. It can be withdrawn from the program, but doing so requires payment of  a penalty. What this program has accomplished, is the betterment of Vermont forest land through proper management, and it lessens the need for a landowner to sell off bits of their land to pay for property taxes.

Unfortunately, during these economic times, the Current Use Program has come under scrutiny as a way of generating more revenue for the state by changing the valuation and availability of Current Use. To do so would be to tamper with the very foundation that makes Vermont what it is today. There is a very strong movement underway to keep Current Use intact and by properly educating the citizens of Vermont as to  just how important this seminal program is the future of Vermont.

View Vermont Country Real Estate’s Land opportunities

Posted by Wade I. Treadway

Clearly the year of 2008 has been one of the most relevent periods of time in the history of modern man. I think it safe to say that every institution of virtually all nations have had to reevaluate their place in the world and reposition themselves for the sake of future survival. The year saw political changes, financial changes and hopefully a radical change in the consciousness of all people. The complacent mindset of the twentieth century has hopefully been replaced with a greater understanding of the needs of the twenty first century.

The business of real estate brokerage has seen its share of changes. The traditional business model of a real estate agency has been reshaped by changes in buyers and sellers access to the internet. Never before has there been such access to the tools that brokers use to help educate and inform the buying public. The typical buyer of today has a clear understanding of market conditions, available properties and historic sales data. When we at Vermont Country Real Estate set up our website, we did so in a manner that would attract buyers and sellers looking for insight into Vermont Real Estate. Not only can all listings be accessed state wide, but past sales data going back to 1986 makes for a better understanding of market conditions today. It was our hope and has been proven to be the case that visitors to our site come back frequently for information about Vermont real estate and state and community information.

We welcome comments on how we can better serve your needs as we enter 2009. Helping you is why we are here, and we readily await the opportunity to serve your needs.

Ken, Kathy and I wish you the very best of this new year and look forward to strengthening the bonds, and increasing the opportunities we have with our clients, customers and colleagues.

Posted by Wade I. Treadway

Now that the foliage is mostly off the trees, another world opens up. Thats the magic and beauty of the four seasons of New England. While the woodlands and hillside trails are wonderful areas to study, explore and enjoy during the summer months, the opportunity to see some of these areas in their own context is best this time of year. The terrain of a land parcel is easy to see and understand without the cover of understory. How a building site might be accessed and a driveway built is much easier to see. The local and disant views are in full view. It’s also very apparent that with the removal of just a couple of trees how an  entirely new vista can be opened up.

I have found that over the last twelve years of my real estate career, most of my land sales have taken place between now and early winter,(January). It’s a great time to fully get the picture. As you select a land parcel to view, see if you can pinpoint the property on Google Maps. By using the satellite tab you can switch to an orthophoto. The orthophotography that is used for aerial views is shot during the early fall and late spring, when the foliage is off the trees. It is easy to recognize open fields, ponds and streams. Stonewalls and other property boundaries are easily seen from aerial photos. The different parcels can often be observed by their different tree types, conifers vs. deciduous. And woodland management over the years can quite often be observed.

Currently, the Vermont real estate market is very active with land sales and a good inventory. Throughout the entire Northeastern US, there are very few areas where you can still buy 10 to 500 acres at very affordable prices. The current instability in the financial markets appears to be driving interest in Vermont land parcels. And coincidently, right now is the opportune time to be viewing.

Posted by Wade I. Treadway

It seems we’ve just gotten into the swing of summer and have roughly half the things done that we wanted to have done, and folks start celebrating the Autumnal Equinox. Better well known as the first day of Fall. Now I generally lump spring, summer and fall into the broad category of non winter and it is all good. But somehow, the closing of one season and the start of another can take us by surprise. Just two weeks ago I recalled that I had better check on the dates for The British Invasion in Stowe. An annual trek that I always make. In my mind it was to be sometime next month or even the month after. Imagine my shock that it was in ten days. The reality of the rapid passing of the seasons was all too apparent.

I thought a lot about this as I drove up Interstate 89 on my way to Stowe. How summer seems to have passed so quickly. But has it really, we are still eating fresh corn out of the garden, a few succulent blueberries are still on the bush and this years abundance of wild blackberries seems to never end. So I can relax a bit in my thinking, but must not relax on the firewood issue. I was so pleased that the British Invasion would be blessed with cool temperatures and clear blue skies. ( It generally seems that if you get too many British enthusiasts in one place it will inevitably rain and be dark and miserable. ) The foliage on the mountainsides has started its yearly change from varying shades of green to a rich mosaic of reds, yellows, browns and orange. There is a faint smell of woodsmoke in the air. A reminder of the warmth of the fireplace hearth. So why would I miss summer with its heat. humidity, and flying insects. Fall is reason enough to celebrate the passage of time.

To further heighten my day before the Autumnal Equinox, I stopped along the White River in Bethel, Vermont and spent an hour trying to lure a brown or rainbow trout to my fly. No luck there but a sensational day to be in a river. So yes, I relish the changes of the season even if it takes me totally by surprise.

The British Invasion? Absolutely fantastic, a great collection of British automobiles, British music and plenty of food and drink in the tradition of Great Britain . Be sure to check out the website and make plans for next years celebration. As for this year, Happy First Day of Fall. Plan some time in Vermont to enjoy this wondrous time of year. Theres still plenty of time.

Posted by Wade I. Treadway

Conservation easements are often quite misunderstood. They are simply an instrument by which a landowner can protect their land from future development into perpetuity. Conservation easements are unique to each and every land parcel that gets conserved. They can contol not only future development but limit and control the uses of the land as well. First and foremost, their major benefit is to protect and continue proper stewardship of the land. However, there are distinct advantages from a tax standpoint to conserving land. To better understand the basics, I would recommend visiting The Nature Conservancy website. As a national organization. The Nature Conservancy is perhaps the most widely recognized and known advocate of conservation easements. However, as an individual becomes more educated into the specifics of conservation easements, they will most likely find many local organizations as well. Here in Vermont one of the oldest and largest overseer of conservation easements is the Vermont Land Trust. They not only oversee and enforcement the easements, they are instrumental in educating and guiding landowners through the legalities and benefits, and the writing of the binding agreement. Many regions and communities also have their own more localized land trusts. The Upper Valley Land Trust and Richmond Land Trust are just a couple of examples.

In the simplest form, a conservation easement strips away the ability to develop the land parcel. This in theory, drops the value of a property. By having two appraisals done, one with no restrictions and one with the development rights removed gives the differential by which an individual can gain tax credits. This is dictated by Federal Tax guidelines. Now I said in theory, it drops the price. In most cases and certainly in most areas of the country, this holds true. However, practice has demonstrated here in Vermont that a property that has a conservation easement on it, hence no ability to develop it beyond its current use, does not necessarily mean that the market price of the parcel is lowered. Indeed several of the record sales of the last decade in Vermont for private residences have been properties with conservation easements on them. The reason is that typically buyers of Vermont property are more concerned with the preservation of the land than selling off parcels for development. Of course each property is unique to itself and every conservation easement is equally unique, but in general, having a conservation easement on a property in Vermont does not necessarily mean that it’s fair market value is less or that it will be detrimental to the marketing of the property.

Conservation easements have protected millions of acres of private land throughout the country, and are one of the more successful means of preserving open space and wildlife habitat. I strongly recommend visiting the above referenced sites to better understand this important component of stewardship of our lands.

Posted by Wade I. Treadway 

It seems in this real estate market that buyers are hypersensitive to what they can gleen of signals from brokers and sellers. If the grass needs mowing or a fence rail is down seems to send a message to buyers that the property owners are in trouble and its time to strike. Given all the hype and misdirection the media is giving the real estate market, it’s to be expected. However, the most brazen sign of a troubled seller  to a buyer in the lowering of the price. That is a sure sign that the owner is desperate and needs out. Without question if a property has had a price reduction and a serious buyer looks at it, the interpretation is that it can keep going south in price. If the property is being represented by a responsible broker, nothing could be further from the truth. A conscientious broker always helps the seller establish a listing price on a property. Current information as to what has sold and what is currently available and its listing history are the most important tools for a broker, aside from sound experience. The key word here is current. If real estate was traded strictly as another commodity, it would have price fluctuations daily just like all other commodities. But of course it not, but an astute broker needs to stay closely in tune with market conditions and react to market conditions by way of informing the sellers of price changes. If a property is still on the market after 6 months, chances are very good that conditions have changed to where an adjustment in asking price might be appropriate. In the case of accurate and sound advice from a broker, a reduction is listing price really signals that the broker is doing their job and a new price is more in line with todays market. It has nothing to do with the financial stability or instability of the seller. As the real estate markets are changing so rapidly, it is entirely possible that regular price changes become the norm. The message to buyers is, do your homework and don’t rush to judgements that might make you look foolish.

Posted by Wade I. Treadway

Buyers and sellers in todays real estate market are getting inundated with vast quantities of market data that  make even the savviest clients perplexed at best as to what to do in todays marketplace. All it takes is the morning and evening news, a newspaper and a couple of magazines thrown in to draw into question, “what is going on?”  Here in Vermont the marketplace for real estate is varied depending on the area and seems to fluctuate wildly day to day in terms of response to advertising. But one thing is certain, all real estate brokers are working overtime to keep up with the changes. To that end, we have seen many price changes, restructuring of offerings and most importantly realistic pricing of new listings. If a broker is astute and careful, new listings will be priced to reflect current market conditions. With that said, here comes the information overloaded buyer thinking that based on everything that they have heard, that all listings can be severely discounted.  Does a weak real estate market mean that a newly listed property with a proper listing price must be heavily discounted to keep a buyer on track? Of course not, what it means is that a broker must do their utmost to ascertain the mindset of the buyer. They must educate the buyer as to what the market conditions are locally and how the property they are interested in fits the current value trends. There are definitely many buyers looking for bargains, and conditions are right for them to get a bargain. However, they must express that to their broker so the broker can focus on those listings that fit into the bargain catagory. Its a total waste of everybodys time and an insult to the sellers for a buyer to make a low offer just because USA Today says thats the way to do it. More often than not, a seller will be so put off by a low offer that further negotiating will prove quite difficult and end up costing the buyer more in the long run. 

Posted by Wade I. Treadway

Unquestionably the major reason people relocate to Vermont is the quality of life. So much is known, written and romanticized about the quality of life here, I will not digress. Many reasons exist as to why the quality of life is so apparent, not the least of which is the relative low population of Vermont. As larger metropolitan areas such as Burlington are growing in population, the more rural areas are actually declining in population. However, demographics aside, the very element that makes Vermont so attractive to visitors and residents is not so attractive to large national and international businesses that supply our basic needs. Vermont has always had a very hard time attracting and keeping health insurers. The fundamental reason is simple, we are not big enough of a marketplace to make operations profitable. And this prevailing corporate attitude extends to all areas of our daily lives.

One of the greatest boons of recent years to the development of Vermont has been the internet. Many people who have bought homes with the hope of retiring here are finding that they can make their permanent move now and continue to work by way of the internet. The diversity of businesses that are conducted out of Vermont homes is staggering.  And what a great economic boost, no impact and the ability to conduct business here. Just as the internet helped to spurn this new growth, it has been proved difficult for internet providers to keep up with the daily changes to internet business. At first we were elated to have dialup, finally we were connected. But it didn’t take long before dailup was inadequate much too slow for most of what people typically need for communications. So, we rent a space in town and drive in the have a DLS connection. A little deflating for the bucolic scene of sitting on the porch with a laptop conducting trades. Yet, a week doesn’t go by that we don’t get a flyer in the mail from Comcast, Verizon among others offering us great broadband access along with bundled phone service and television. A quick phone call confirms what we already knew, “you don’t have service available in your area”. Enter the Vermont State legislature. In a very forward thinking move, they passed an initiative for all of Vermont to have broadband connection. Simply put, they streamlined the regulatory hurdles usually associated with such projects. This has enabled Vermonters to take on the business of developing, installing and managing broadband service on their own. and if we are going to do such a thing, lets replace the existing infrastructure with the very latest, very best, a Fiber-Optic network. What is in essence a grassroots effort, Vermonters are in the process of forming their own community owned, subscriber funded state of the art network. Currently, Burlington, VT is fully connected through Burlington Telecom. East Central Vermont Community Fiber Network , is well on its way to connecting 22 towns and communities in central Vermont. I strongly recommend that you visit their website. It certainly demonstrates the resolve of Vermonters to get the job done on our own. This is not only the way of the future for Vermont in terms of telecommunications but the premise could very well set the stage for other independent projects to benefit Vermonters without needing reluctant out of state corporations.

Posted by Wade I. Treadway

The keyword here is, at the moment. Certainly as we watch the rest of the world dealing with the ups and downs of an unsettled real estate market, here in Vermont I get a strong sense from fellow brokers throughout the state that all is not lost. Indeed, the last twelve months have shown a steady increase in the amount of inquiries and sales have definitely been on the rise. The segment of the market that appears to be the least affected by the events of the last two years is the high end. Of course that is no surprise to seasoned brokers in Vermont. Prices at the high end have in many cases been on a steady increase. Many of the high end listings that have been on the market have had price adjustments. Which I might add many of them needed a reduction as they were priced wrong in the first place.

I have been watching the southern New England real estate marketplace for the last two years and have seen a very steady increase in pricing at the high end. Although inventories are getting high, there are still significant sales that substantiate these increases. This only helps the Vermont marketplace. Time and time again, buyers of Vermont real estate are amazed at how much value they get for their dollar in Vermont.

All things considered, there has never been a better time than now to buy in Vermont. Acreage prices are on the rise and good quality residences with a  good land component are in demand. This could change at any moment, but right now that looks doubtful. As Barbara Corcoran stated in a recent interview on NBC’s  Today Show, buyers waiting for the bottom of the market are going to miss opportunities now.

posted by Wade I. Treadway