Rutland real estate sales plunge in '07
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By Bruce Edwards Herald Staff - Published: March 31, 2008
Home sales in Rutland County fell last year following a national trend driven by the subprime mortgage crisis and a weakening economy.
Single-family home sales in Rutland County fell 15 percent last year, according to state property transfer tax data. Statewide, sales fell 16 percent.
There were 612 single-family homes sold in the county in 2007 compared to 717 the previous year. (Data reflects homes on less than six acres.) Statewide, there were 5,820 homes sold last year compared to 6,919 the prior year, state data shows.
But, Sean Sargeant of Sargeant Appraisal Services said, excluding the Killington market, home sales in Rutland County last year actually increased 4.5 percent. Sargeant's numbers include state property transfer tax data, Multiple Listing Service data and for-sale-by-owner data.
Betsy Reddy, 2008 president of the Rutland County Board of Realtors and an agent at Coldwell Banker Watson Realty, said so far this year sales in the county are down 20 percent for the same period last year. From Jan. 1 through mid-March, Reddy said 59 sales closed compared to 73 a year earlier.
Sargeant added that historically sales this time of year are slow and this winter was slower than usual because of the weather.
"We sell four times more homes in July and August as we do in January and February," Sargeant said.
He said based on his figures the market for homes priced at $200,000 and under remains very strong while homes between $200,000 and $500,000 are a bit slower. The market for homes above $500,000 is also very strong, he said. He said, though, it is taking longer to sell a home.
Michelle Murphy of Lang McLaughry Spera called 2007 a year where the real estate market corrected itself after several years of strong sales.
Based on MLS figures, Murphy said there were 582 homes sold in Rutland County last year, a decline from 2006 when there were 684 sales.
Despite a sluggish economy and the threat of a recession, Realtors like Murphy and Reddy said there are indications sales are picking up.
"I think we're going to see a really good spring," Murphy said. "There's plenty on the market right now and the buyers are ready and the interest rates are low."
In Rutland County, there's plenty of homes on the market to choose from with 667 single-family homes and condos on the market in mid-March, according to Murphy.
She said prices have moderated from a year or two ago while interest rates are low and likely to go even lower.
"Home prices have corrected and are now where they should be but not ridiculously low," Murphy said.
There's no question home prices have fallen nationwide over the past year or so and Vermont is no exception.
Sargeant said his figures, excluding Killington with its high-end ski condos and vacation homes, reflect a decline in both the median asking price and median sale price between 2006 and 2007.
In 2006, he said the median list price of homes in the county was $218,000 while the median sale price was $192,000. Last year, the median list price dropped to $195,000 with the median sale price falling to $175,000.
State property transfer tax data put the median sale price of a home in all of Rutland County last year at $159,500. In 2006, the median price was $157,000. Statewide, the median price increased in 2007 to $200,000 from $194,000 in 2006.
Sargeant also noted that based on his calculations the difference between the list price and the eventual sale price increased last year to 7 percent. He said in 2006 that gap was 5 percent.
The decline in home prices reflects in part the fact that there are more homes on the market.
"There is a lot more competition out there for buyers," he said.
In 2006, he said there were 493 homes on the market at any given time compared to 650 homes last year — a 30 percent increase.
Economist and University of Vermont professor Arthur Woolf said home sales statewide will continue to decline again this year, following an 18 percent decline last year and a 16 percent drop in 2006.
"We're basically seeing the unwinding of this housing boom that we experienced in Vermont as well as many parts of the nation," said Woolf, a partner in Northern Economic Consulting in Westford.
He added that the slowdown in Vermont has been far less severe here than in other areas of the country, but do track the nation as a whole.
Woolf said housing prices in Vermont peaked in the second quarter of last year and have fallen since then.
Since mid-year of 2007, home prices in the state have fallen by about 5 percent and will likely decline another 5 percent this year, he said. For 2007, Woolf said median home prices in the state increased 3 percent, the most anemic year increase since 1999.
"People are just holding back on purchasing, especially if the economy slows," he said. "The only thing that's kind of beneficial that would cause sales to go up is that mortgage rates are pretty low."
Bob Hill, executive vice president of the Vermont Association of Realtors, said Vermont's real estate market has fared better than other states or New England as a whole.
Hill also said the state has avoided the foreclosure debacle and subprime mortgage crisis that has surfaced in other states.
He and other Realtors said the negative news about the economy often becomes a self-fulfilling prophecy, keeping potential homebuyers on the sidelines.
Contact Bruce Edwards at bruce.edwards@rutlandherald.com.
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