Mad River Valley Monthly Real Estate Update for April

May 012012
 

Statics were taken on the last day of the month from the Northern New England Real Estate Network.
The towns of Fayston, Moretown, Waitsfield and Warren were included.

Nov 2011 Dec 2011 Jan 2012 Feb 2012 March 2012 April 2012
Residential homes:
for sale 123 124 124 130 136 135
under contract 9 5 6 7 8 10
sold – for the month 4 6 2 2 2 3
Condominiums:
for sale 103 106 112 121 129 127
under contract 2 2 4 7 11 5
sold – for the month 1 3 4 1 4 7
Land:
for sale 122 116 113 114 115 118
under contract 8 3 2 3 1 2
sold – for the month 0 2 1 1 2 0
Commercial:
for sale 19 18 18 19 16 16
under contract 1 0 0 1 1 3
sold – for the month 0 1 0 0 0 0

Analysis of the Mad River Valley Real Estate Market

Feb 172012
 

Here is a thoughtful analysis of the Mad River Valley Real Estate market by appraiser John Waldo. If you are a seller you won’t be very happy with what you read, but we are optimistic the market is finally starting to move in the right direction. Many thanks John!

MARKET CONDITIONS
The residential real estate market in Vermont (including both improved land and undeveloped land), like much of the nation, experienced a steady rise in the value of real property during the first half of the decade culminating in a sharp increase in both sales activity and property values near the middle of the decade. The period following the middle of the decade experienced varying but generally stable property values, declining sales activity, and lengthening marketing times. There were more definite signs of declining property values along with the other signs of a market in decline at the end of the decade. The economic features of the real estate market varied somewhat in different areas of the State, and between various property value brackets.

The dramatic decline in the market value of real property that took place in many real estate markets across the nation as well as in Vermont was due in large part to the imprudent actions over the decade of many large banks and other financial institutions. The national economy came near to collapse near the end of 2008 and was rescued by large federal bail-outs of the offending financial institutions at the end of 2008 and into the beginning of 2009. It is, in large part, this bank-driven economic collapse that is to blame for the sudden decline in property values at the end of 2008.

Across Vermont and in all value brackets and property types the 2009 residential real estate market experienced an over-supply of property for sale, declining sales activity, rising marketing times, and with only a few exceptions some decline in property values. The value trend analyses reported below shows that the subject market area experienced a declining value trend in 2009 along with declining sales activity.

Sale Activity/Value Trends
The following table shows the results of an analysis of all residential sales ($50,000 and up) that occurred in Warren, Waitsfield and Fayston that were processed by the regional multiple listing service over the past ten years. The number of sales that occurred and the average days on market are shown for the first four months of 2010, but no analysis of the data was done because there is too little data to make the analysis meaningful.

MULTIPLE LISTING SERVICE RESIDENTIAL SALES
WAITSFIELD & WARREN & FAYSTON
as of 4/30/2010

YEAR # SALES % CHG MEDIAN S.P. % CHG DOM HIGH S.P. LOW S.P.
2000 60 $183,500 274 $940,000 $72,000
2001 61 1.7% $189,000 3.0% 229 $1,500,000 $89,900
2002 63 3.3% $223,000 18.0% 185 $875,000 $65,000
2003 66 4.8% $260,000 16.6% 170 $850,000 $61,700
2004 73 10.6% $245,000 -5.8% 184 $1,490,000 $82,500
2005 64 -12.3% $320,000 30.6% 129 $3,175,000 $56,000
2006 62 -3.1% $310,000 -3.1% 159 $1,295,000 $85,000
2007 60 -3.2% $299,250 -3.5% 241 $1,875,000 $50,000
2008 47 -21.7% $333,333 11.4% 273 $1,300,000 $91,000
2009 39 -17.0% $242,000 -27.4% 223 $1,425,000 $85,000
2010 4 530

Sales activity increased on a year-to-year basis from 2000 to 2004 for a high point of the decade, and decreased steadily from 2005 through to the end of 2009. Sales activity in 2009 was the low point for the decade. Median sale price increased from 2001 through to 2005 (with the exception of a small dip in 2004), dropped slightly in 2006 and again in 2007, and rose to slightly above the 2005 level in 2008. Median sale price fell dramatically in 2009 to below 2003 levels. Marketing times generally decreased from 2000 to 2005, increased steadily from 2005 through to 2008, and declined in 2009.

This next table shows a comparison of the number of sales of residential property in the subject market area over the decade to the number of listings of residential property at the end of 2009 and as of September 16, 2011. Analysis of the data results in a supply of property that is for sale in years. With the listings data for the end of 2009, the average annual sales for the decade is 60 sales per year which is a 1.3 year supply and the average annual sales for the last two years is 44 sales per year or 1.8 year supply. With the listings data for September, 2011, the average annual sales for the decade plus 2010 is 58 sales per year which is a 2.1 year supply and the average annual sales for the last three years is 42 sales per year or 2.9 year supply.

The analysis of listings as of the end of 2009 is the most relevant to the appraisal based on the effective date of April 1, 2010, but the analysis of listings as of September, 2011 is useful in showing that the supply and demand situation in the residential subject market has not improved, but has actually worsened.

SUMMARY OF SUPPLY/DEMAND- RESIDENTIAL PROPERTY- WAITSFIELD & WARREN & FAYSTON

YEAR # SALES DATE OF LISTINGS RECORD # LISTINGS
2000 60 12/31/2009 80
2001 61 9/16/2011 121
2002 63 # SALES
2003 66 AVE SALES/ YR 2000-2009 60
2004 73 AVE SALES/YR 2008-2009 44
2005 64 # YEARS
2006 62 SUPPLY IN YRS BY DECADE SALES- AS OF 12/09 1.3
2007 60 SUPPLY IN YRS BY 2 YRS SALES- AS OF 12/09 1.8
2008 48 # SALES
2009 39 AVE SALES/ YR 2000-2010 58
2010 39 AVE SALES/ YR 2008-2010 42
2011* 28 # YEARS
SUPPLY IN YRS BY DECADE SALES- AS OF 9/2011 2.1
* As of 9/16/2011 SUPPLY IN YRS BY 3 YRS SALES- AS OF 9/2011 2.9

The following table shows a summary of an analysis of land sales that occurred in the subject market area (Fayston, Waitsfield, and Warren) from 2000 to 2010 with site area from five acres and up. The sales data was retrieved from the Vermont Real Estate Sales website. This is a by-subscription website that permits custom searches of the property transfer returns that are collected by the State of Vermont tax department. This data falls into the category of secondary data, as discussed above. Those sales with buyers and sellers with the same last name have been excluded, and several of the lowest and highest value sales have been excluded as being inapplicable to the analysis.

LAND SALES- 5 ACRES & UP/WARREN/WAITSFIELD & FAYSTON/2000- 12/31/2010

YEAR # SALES ACRES $ SOLD AVE S.P. % CHG
2000 41 911.9 $4,715,480 $5,171
2001 34 1019.3 $4,849,681 $4,758 -8.0%
2002 29 968.2 $3,456,550 $3,570 -25.0%
2003 29 702.5 $3,920,850 $5,581 56.3%
2004 33 758.2 $5,988,500 $7,898 41.5%
2005 25 559.1 $5,868,156 $10,496 32.9%
2006 14 342 $2,585,600 $7,560 -28.0%
2007 12 251.2 $2,004,661 $7,980 5.6%
2008 8 307.3 $1,541,733 $5,017 -37.1%
2009 8 310.5 $1,444,735 $4,653 -7.3%
2010 8 241 $1,095,400 $4,553 -2.2%
TOTAL 241 6,371 $37,471,345 $5,882
TOTAL LAND LISTINGS- 5/28/2010 97
TOTAL LAND LISTINGS- CURRENT 106 AVE DOM 558
LAND LISTINGS < 5 ACRES- CURRENT 50 AVE DOM 625
TOTAL DECLINE IN ANNUAL AVERAGE SALE PRICE 2007-2009 41.7%

The analysis takes the sum of the total number of dollars spent each year and divides by the total number of acres sold for that same year resulting in an average per acre sale price for each annual period.

Analysis of the land sale data shows value trends that are similar to the residential sales data above with a culmination of an overall rising value trend in 2005 followed by fluctuating but overall declining value trends through to the end of the decade. The main difference from the residential sale analysis is that after 2005 the land values expressed as annual average per acre sale price declined sharply and except for a small gain in 2007 continued a downward trend through to the end of 2010.

The 2010 land sale data, which is less relevant to the appraisal because the effective date of the appraisal is April 1, 2010, is helpful in that it shows that the value and sales activity trends that were established in 2008 and 2009 are not a short term phenomenon, but have continued to be a reality in the land market in the subject market area. This makes good sense when one reviews the large over-supply of existing residentially improved property that is for sale as shown above.

Recap of the Mad River Valley 2011 Real Estate Market

Jan 112012
 

Following is a recap of the 2011 real estate market based on MLS reported Real Estate Sales in the Mad River Valley towns of (Fayston, Moretown, Waitsfield, and Warren).

In 2011 there were a total of 104 MLS reported real estate sales.

54 residential sales ranging from $75,000 to $1,275,000.
1 @ < $100,000.
6 @ $100,000 - $199,000
22@ $200,000 - $299,000
10@ $300,000 - $399,000
8 @ $400,000 - $499,000
4 @ $500,000 - $599,000
2 @ $600,000 - $699,000
1 @ > $1,000,000

33 condominium sales ranging from $49,000 to $470,000
4 @ < $100,000
17@ $100,000 - $199,000
9 @ $200,000 - $299,000
2 @ $300,000 - $399,000
1 @ > $400,000

15 land sales ranging from $7,000 – $1,200,000.
8 @ < $100,000
5 @ $100,000 - $199,000
1 @ $500,000 - $600,000
1 @ > $1,000,000

2 commercial sales of $30,000 and $79,900.
Another commercial sale took place, but was not reported in the area MLS.


As the above graph shows, compared to the glory days of 2003 – 2008 the overall real estate market is clearly down.
Another way to look at it is to say we are back to +/- year 2000 levels.
Interestingly this is consistent with a number of other markets in the region and the northeast.
However, we appear to have avoided the collapse seen in other markets across the U.S.
Indeed, the good news is that despite the regional and national economic challenges real estate continues to sell in the Mad River Valley.
Mortgage rates are at historic lows (3.5% fifteen year fixed rate on a primary home!) and real estate continues to be one of the best hedges against inflation.
Clearly those who are best informed seem to be making the most prudent buying and selling decisions.

The luxury market has shown the greatest weakness in sales. As a result, the over $500,000 market offers some of the very best buying opportunities. Additionally, the land market continues to languish with only 15 sales (there should be 30 or more sales). As a result, there are certainly some great land offerings out there right now. Homes in the $200, 000 – $400,000 price range and condominiums in the $100,000 – $300,000 price range are seeing the greatest sale activity.

2012 looks to be an interesting year in the local real estate market. Overall sales in the $100,000 – $400,000 price range represent 70% of the market. So that is clearly where the best opportunity lies for sale activity.
Presently there are 120 residential properties for sale with 5 under contract, 103 condominiums are for sale with 4 under contract, and 111 parcels of land for sale with 3 under contract.
Whether a seller’s market or a buyer’s market three rules always apply: Desirable location, good overall condition, and realistic pricing. By contrast if you are in a less desirable location, with a lot of deferred maintenance and asking a premium price, then expect to be for sale for a very long while.

Please visit our real estate blog for monthly updates on real estate activity and of course do not hesitate to call or write anytime with your questions or comments.

From all of us at DMDRE best wishes for a happy, healthy and prosperous 2012.

Oil tanks to be regulated by the State of VT

Nov 082011
 

Effective Oct.1st, the design, installation and inspection of all residential and commercial above ground oil tanks are regulated by the state of VT. Contact your fuel company or heating technician to find out if your oil tank is in compliance

Get more details here: www.vermontfuel.com

Vermont Residential Sales over $500,000 offer challenge

Aug 192011
 

Based on a review of all residential sales in Vermont since January of 2011 homes in the over $500,000 price range appear to be continuing to lose value. However, homes are definitely continuing to sell in that price range.

In 2011 year to date 188 residential properties sold in Vermont for over $500,000. 130 +/- of those 188 properties sold for between $500,000 and $700,000.

Presently there are 56 residential properties under contract of sale in Vermont with an asking price of over $500,000. 32 of those properties are listed for sale between $500,000 and $700,000.

So more than half of all properties sold and under contract of sale over $500,000 are in the general price range of $500,000 – $700,000.

In the Mad River Valley 1 property is under contract and is scheduled to close next week. So there is not a lot of sale activity taking place in the Mad River Valley over $500,000. Perhaps properties for sale over $500,000 in the Mad River Valley are overpriced for present market conditions?

Sales prices range from $565,000 to $640,000. Some of these properties show wide discrepancies between asking price and selling price. Holy Smoke Road in Shaftsbury began with an asking price of $829,000 and sold for $565,000!

Let’s hope for some good economic news soon so we can see a resurgence of activity in the over $500,000 price range.