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Vermont Housing Market on the Upswing!
January 13, 2009
FOR IMMEDIATE RELEASE
Vermont Real Estate Market on the Way Up
Barre, VT. The President and owner of BCK Real Estate, John Biondolillo, declared that the worst of the residential housing market in Vermont is behind us and things are now moving in a positive direction.
“We are seeing the first time home buyers coming back to the market in large numbers hoping to take advantage of historically low mortgage rates. The key to the residential market is first time buyers. They don’t have houses to sell and can jump right in the market. Nationally 2008 was a year of extreme market volatility with the country in a recession due to the Wall Street turmoil and the residential housing sector. Residential housing led us into this recession a few years ago and residential housing will lead us out. The reduction of interest rates is a first step in getting the housing sector back on track.”
Biondolillo contends that while Vermont was spared the from the brunt of the real estate bubble that many areas of the country experienced, the downtown began in June of 2005. That’s when interest rates started climbing from 5.25% to 6.75% during a span of about 18 months. He said that in real terms that represents an increase of over 25% in the cost of borrowing money and that it effectively shut out the first time buyers.
“The housing market is like a ladder. The first time buyers jump on the bottom rung. The people who sell to them move up to a more expensive home and the cycle continues up the line. It will take 6 to 9 months for the positive effects to be felt in some of the higher price ranges but it is coming.” Biondolillo concedes that second home markets like Stowe and Woodstock will take longer to come back but he is encouraged by what is happening in the primary home markets in Vermont. Renters are doing the “buy versus rent” analysis and realizing that they are better off financially to own.
Biondolillo, who has an Economics degree from the University of Rochester thinks that 9 to 12 months from now some economists will look back and declare that December 2008 was the was the bottom of the market. He feels confident calling the bottom now. “Economists are great at looking in the rear view mirror and telling you where you have been. I’m out there in the trenches. I talk to many brokers and owners of real estate companies; they are all seeing the same thing I am…lots of first time buyers. Interest rates are lower now than they have ever been during the last 30 years. In the last three decades we have seen mortgage rates fluctuate from 5% to 20%. Prices are good, commodity prices such as gas and fuel oil are lower, borrowing rates are at historical lows. It doesn’t get much better than this for buyers or sellers. For the last 28 years housing prices have increased in April, May and June. Sellers who do not have a compelling reason to sell are refinancing and pulling their homes off the market. This is evidenced by the decline in single family homes on the market. On July 1, 2008 there were 406 single family homes listed in the MLS for sale in Washington County. Today there are 353 homes for sale. That is a 13% decrease in inventory in the last 200 days. Barring some unforeseen national financial disaster this has to be the turning point for Vermont.”
Biondolillo added, “Vermont banks and credit unions are still lending money. The Vermont financial institutions have not deviated over the years from their traditional prudent lending practices. Vermont has not been overbuilt like many areas of the country and we have had little speculative buying. There is no fundamental reason why our residential housing market isn’t well on the way to prosperity. Reasonable prices combined with low interest rates are a powerful combination. I’ve been in real estate in some form or fashion for 25 years. I’ve never seen so many opportunities for both buyers and sellers at the same time. It’s extraordinary.”
BCK Real Estate is a full service real estate company serving central Vermont with offices in Barre, Montpelier, Northfield, Rochester, and Waterbury Vermont. For more information call (802) 479-3366 or visit www.BCKrealestate.com.
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