Vacation homes sell at a reduced pace
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By BRUCE EDWARDS Staff Writer - Published: August 13, 2006
The vacation and second-home market in Vermont is showing signs of a slowdown, following a national trend of an overall softening in the housing market.
But Realtors in the state say business is good with no shortage of buyers.
"In our part of Vermont it remains a pretty good marketplace," said Ken Libby of Stowe Realty. "There's plenty of buyers."
But Libby also said that sales have slowed compared with last year. That's reflected in the inventory of available second homes for sale.
In the Stowe market, Libby said he's "seen a 30 percent increase in inventory in the past four months."
One day last week, there were 116 single-family homes listed for sale in the Stowe area compared to 60 homes the year before. There were 75 condos for sale compared to 35 last year at this time.
He said inventory is greatest at the low-end with second homes and condos priced in the $300,000 to $800,000 range.
"The high-end folks have enough money not to be concerned about the economy and gas prices," said Libby, who sits on the resort and second home committee of the National Association of Realtors.
Although vacation home sales have slowed in other parts of the country, Libby said the term "slow" is relative.
Las Vegas, which experienced a 54 percent appreciation in second home values last year, has seen a significant slowdown this year, Libby said, pointing out that the 2005 pace of appreciation was impossible to sustain.
In Vermont, there's been a similar but not as dramatic slowdown.
"We did 25 percent appreciation each year for three years in a row," Libby said. "This year it's 11 percent but it's still pretty good."
Judy Storch of Killington Valley Real Estate tells a similar story: business is good but not booming.
Storch said there are 120 condos and 30 homes on the market, twice as many as last year at this time.
"We're back to where we were three years ago," said Storch, who has been selling real estate since 1968.
With the market softening, she said any property that's "fairly priced" will continue to move. Like other Realtors, she said interest rates remain favorable.
If there's one thing that concerns Storch it's Act 68, the statewide property tax calculation for funding education.
"I'm seeing properties go on the market from people who can't afford to live here and these are full-time people." Storch said.
In the area around Lake Bomoseen and Lake St. Catherine, demand for lake front properties remains strong, according to Wenda Bird of Century 21 Bird Real Estate in Castleton.
"People are still buying lake property, there's no question about it," Bird said.
She said increased demand has meant a lower inventory of homes on the market this year.
One client paid $600,000 for a cottage on Lake Bomoseen, only to tear it down and build a new home, she said.
She said lake homes in the $500,000 to $600,000 range are common.
"We have another property on deposit that sold for a million," said Bird, who grew up on Lake Hortonia.
Typically, Bird said buyers are divided equally between residents and non-residents. However, she said this year there are more out-of-state buyers from places like Texas, California and Virginia.
"They're further away than just the Connecticut, New Jersey and New York crowd," Bird said. "I guess by their standards our property is inexpensive."
Lakefront property values have also soared, dictated by such factors as view, swimming and boating accessibility and whether the property has septic or is hooked into the town sewer system.
Six years ago Bird sold a summer cottage for $112,000 and today that same property would fetch between $400,000 to $425,000.
The services available around Lake Bomoseen also make it a sought after location. Bird said there are three restaurants, a nine-hole golf course, and several marinas
On the new construction end, a Ludlow builder said while he remains busy there's no doubt that second home construction has tapered off.
"Overall there's been a slowdown as you can tell by the amount of building permits being issued," said Doug Burns of Burns & Associates, a builder of vacation homes near Okemo Mountain Resort.
Burns builds high-end homes in the $1 million to $2 million range and so far there's no shortage of work.
In that price range, he said many buyers pay cash and are not affected by the economy.
"If you can afford a couple of million dollars cash, the interest rates aren't going to effect you," said Burns, who's been building homes for 20 years.
Libby of Stowe Realty said that feedback he gets from other Realtors around the state is that the second home market remains busy. He added that interest rates remain low by historical standards in the 6.7 percent range.
"I don't sense any doom or gloom," he said.
For several years, home sellers have been able to call the shots but Libby said that's slowly changing to the point where it's once again becoming a buyer's market.
Home sales nationwide have been the major economic catalyst with second home sales a growing segment of all home sales in the country.
"Three years ago the second home and vacation home market accounted for 28 percent of all home sales and last year it was 40 percent," he said.
Of the 6.2 million total homes sold nationwide last year, Libby said 2.5 million were vacation homes.
Contact Bruce Edwards at bruce.edwards@rutlandherald.com.
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