Are You Ready for Vermont’s 2021 Real Estate Market?
The pandemic fueled the fire of Vermont’s already hot real estate market, building off of a strong year in 2019. Many, in both Vermont and out of state, had to rethink their living situations amid COVID-19 Vermont real estate agents have reported high interest in home buying despite record-low inventory, which has acted as a catalyst for competition within the market. Vermont remains as one of the few states with the lowest number of COVID-19 cases, creating a beacon of safety for many interested buyers.
So, what should Vermont real estate agents expect from 2021?
2021 Vermont Real Estate Outlook: Hot
The average home sale prices increased significantly last year. In September 2020, the median sale price reached $348,000, a 23.0% increase from September 2019. Looking ahead, Zillow sees home values increasing 9.6% in the next year. After a brief pause in the spring due to lockdowns, the real estate market quickly re-opened - and with a bang. Home prices and sales volume picked up in May and haven't stopped since. This momentum will likely continue in 2021, adding extra pressure to real estate agents to stay connected within the market and know which listings will best suit each client.
While home sales and home prices have increased, so has the state’s average home value. Vermont has the second highest home equity rate in the country, just below Washington. As demand for homes continues, so will the rise of home values. Also, the number of homes with negative equity is expected to decrease as home sales and home sale prices drive the value of homes up over the next year.
Delinquency rates in Vermont are also some of the lowest in the country (0.6%) thanks in part to the state’s low unemployment rate. In April, Vermont’s unemployment rate increased to 15.6%, but luckily this number has steadily decreased, and now sits at 3.1%. As the unemployment rate continues to drop, so will the delinquency rate on homes. Optimism around the COVID-19 vaccine and out-of-state residents will also help to expedite a dramatic market expansion.
2020 Vermont Real Estate Market Data
|Zillow Home Value Index||$273,024|
|1-Year Change on Home Values||+4.3%|
|1-Year Change on Rent Prices||+5.7%|
|Delinquent on Mortgages||0.6%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for Vermont
Vermont’s current home inventory is well below state records, putting pressure on interested homeowners and real estate agents alike. Inventory throughout the state is dependent on the area and price range. In areas like Northern Vermont, active inventory has decreased by 27.3%. Low inventory will raise concerns as the year goes on, especially if new development continues at its current glacial pace due to delays from the pandemic. Real estate agents will need to get creative and expand their radars to fulfill their clients’s needs. The seller’s market in Vermont is not going anywhere, so real estate professionals should be prepared for a busy 2021.
Vermont has been experiencing a steady stream of new residents from outside its’ green, mountainous border. The pandemic added to that influx of residents, though it’s no wonder why folks are flocking to Vermont it has become a safe haven for many Americans looking for a change in lifestyle since the beginning of the pandemic. Here’s how the state compares with the rest of the nation:
- Second in low crime and corrections
- Seventh in natural environment
- Eighth in education
- Eleventh in health care
The interest in homes is so high right now while mortgage rates remain historically low, creating a buying frenzy in the state. Vermont’s housing market is expected to continue to be hot entering 2021, with some fears behind the lack of inventory both hitting the market and being developed for the market. If development does not pick up, real estate agents should expand their horizons and consider finding homes that are in more rural communities.
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