Tim Heney, of Heney Realtors in Montpelier, says it’s a case of basic economics: supply and demand.
The demand for homes in Washington County is there. The problem, Heney said, is one of supply.
“We’re really in a supply-and-demand issue, because there’s been really very little new housing created in Washington County,” he said.
He said inventory of existing homes for sale in the county “is running half or less of what I would consider to be normal inventories.”
In Montpelier, he said there are roughly 26 homes for sale in all price ranges. He said, as a rule, there should be 80 to 90 homes for sale, which would give buyers more choices and different price ranges.
“Right now at 26 it’s tight,” said Heney, who joined his father in the real estate business in 1981.
Heney said the inventory in Barre City is higher but still lower than normal.
He said the median sales price in Washington County this year is $210,000, up from $199,000 last year.
Washington County is hardly alone when it comes to a shrinking inventory of homes on the market.
According to the Vermont Association of Realtors, while the number of homes for sale this year is up nearly 5, the inventory of homes has shrunk to 8.6 months from 10.3 . Homes are selling more quickly. Homes are on the market for a median of 131 days, a decline of 11 percent from the year ago period.
In the Realtors’ monthly market report, through the first nine months of this year, the Vermont median sales price was $218,293, a 1 percent increase over the same period a year earlier.
The number of sales, however, is down 5.2 percent from the same period last year.
In the three counties of northwestern Vermont, the median sales price jumped 12.2 percent from a year ago to $303,000 and increased 13.3 percent for townhouse-condo properties, according to the Northwestern Vermont Board of Realtors, which covers Chittenden, Franklin and Grand Isle counties.
Sales fell 12 percent for single-family homes and decreased 3.3 percent for townhouse-condo properties.
Homes are selling at a rapid pace in the three-county region. Average days on the market fell 26.8 percent in September to 60 days for single-family homes and fell 15.5 percent to 49 days for townhouses and condos.
With homes selling more quickly, the Northwestern Vermont Board of Realtors report shows that the inventory of available single-family homes for sale was down 20 percent in September.
In Rutland County, there is a supply issue as well.
“We have pockets of price ranges that are selling more slowly, not because people aren’t buying in them, because we have a lack of inventory in certain price points,” said Laurie Mecier-Brochu, regional manager for Four Seasons Sotheby’s International Realty in Rutland.
Overall, she said the Rutland market remains healthy.
Mecier-Brochu said homes priced between $160,000 and $325,000 are moving more quickly and “pretty well go under contract in a couple of weeks” after being listed.
Homes in the $400,000 to $600,000 range are selling more slowly, she said.
However, there is greater demand for homes above $600,000.
“We have seen 10 sales in the $600,000-$900,000 range, which is great, and I know that there are some pending in the same range,” she said.
She said one home sold this year in the $1 million range, but it was sold outside of the MLS network.
So far this year, 685 homes have been sold in Rutland County with a median sales price of $162,500, Mecier-Brochu said. For the same period last year, there were 715 sales with a median sales price of $149,000.
She said the lower inventory has put some upward pressure on prices but it’s not “going crazy.”
Interest rates have started to ratchet up slowly, but Mecier-Brochu said financing has not been a problem.
“It seems the lenders are there,” she said. “There are a lot of good programs with a variety of interest rates and cash down so they seem to be able to qualify pretty well.”
For first-time homebuyers, she said the lack of inventory in their price range makes it “a little harder to find the homes that these folks want to get into that don’t require a lot of work … .”
Heidi Bomengen, of Prestige Real Estate, said single-family home and condo sales in the Killington area are strong but inventory is at record lows. That’s especially true for condominiums, she said.
“I can tell you that the number of properties currently on the market is at its lowest point that I’ve seen in the 15 years I’ve been selling real estate,” Bomengen said.
She said sales are up approximately 20 percent over last year, with homes selling at a much faster pace.
Bomengen said the record low inventory has been good for sellers.
“I have never seen so many situations where there were multiple offers on a property and properties going for over the asking price,” she said.
The median sales price in the Killington area, home to the Killington and Pico ski areas, is $170,000, she said. Last year, the median was $144,600.
Interest rates have crept up over the last year. But for many buyers of Killington real estate, she said interest rates are a non-factor.
“I will tell you a lot of what we do up here is cash,” she said. “It’s always kind of been that way.”
Heney said the tight inventory has made homes in the Washington County area slightly more expensive.
“In general, the average in Washington County this year, right now is 3 percent,” Heney said. “So it’s not a huge average increase in sale price for this 12 months over the same previous 12 months.”
However, he said, there are exceptions like Barre City, where the average price increase is 13 percent, while in Northfield the average increase is close to 25 percent.
Heney cautioned that in small towns with relatively few home sales, “one or two bigger sales can really skew the old average.”
Heney said one area of concern is the number of potential young-adult buyers. Saddled with student debt after they graduate, Heney said it makes buying that first home more difficult. He said some sellers are willing to assist buyers with closing costs.
“That’s a pretty popular tool in the affordable niches,” he said.