2022 was a volatile year for the Vermont housing market – brought on by massive external forces of unabated inflation followed by The Federal Reserve’s relentless interest rate hikes aimed at curbing the inflation. Both factors had the undesirable effect of making housing less affordable for Vermonters.
Interest rates have doubled over the past year, and this has put a wet blanket on the formerly red-hot real estate market. According to Senior Loan Officer Jay Vallieres at Movement Mortgage, LLC, he’s seen his borrowers lose 30 to 40% of their borrowing power because of these rate increases. The real-world impact is that a family that could afford a $700,000 mortgage a year ago, can now only afford a $420,000 mortgage today. According to Vallieres, rates have begun to ease somewhat and are lower than their high mark. Vallieres also states “Perhaps, with luck, the worst of it is behind us.”
The Impact of Higher Interest Rates
The result of the interest rate hikes has had an impact on real estate. The statistics are in, and they tell the story that in Vermont fewer homes are being sold than in past years, and it took more time for them to sell. Still, despite the rising interest rates, the real estate market has been more resilient than some predicted. Statewide sales today are still selling at 99% of their asking price according to the latest statistics. There remains a large unmet demand for homes in Vermont. Vermont continues to be a fantastic place to live and not everyone who wants to live here has found a home yet. As with any market, value is based on supply and demand. On the supply side, there still aren’t enough houses, and on the demand side, there are plenty of buyers who can afford to buy, so the market marches on.
Where That Leaves You
If you’re thinking of buying or selling in the next year, I wouldn’t let any of this information stop you from making a move. Keep perspective; your home is more than likely worth at least 99% of its record value. Moreover, in my experience, most people wait too long to downsize. Making a move before you need to can be the smartest move you make.
How to Prepare for the Present Market
Throughout my career, I’ve always encouraged sellers to make their properties shine before selling. Staging a home, updating, and fresh paint have always been important, albeit less important during the booming market. Make no mistake, those days are over. Buyers have gotten some of their power back and now can be more choosey. So, when it comes time to make a change, make sure you choose a good agent who understands the world of downsizing, and who can help you make a smooth transition.
Ben Durant is a leading Senior Real Estate Specialist in the State of Vermont and has a passion for supporting and defending his clients through the process of downsizing, right-sizing, and relocating in Vermont. Ben lives with his wife, Amy, and three children in Williston, Vermont. He can be reached at Ben@TransitionsVT.com or by calling directly at 802-355-6688. Visit his website at TransitionsVT.com.