Killington real estate activity slows, but prices break records
By Katy Savage
Real estate agents are seeing the lowest housing inventory in memory as homes sell for record prices.
Heidi Bomengen, the owner of Prestige Real Estate, said she’s never seen such low inventory.
“Never before, since tracking these data, have there been fewer sales,” she said in a newsletter. “Cause and effect: when there is little listed, there is little sold.”
Only nine properties were sold in the first quarter of 2023 — just two of which were single family homes. In the first quarter of 2022 there were six single family home sales.
“Inventory has been minimal for the better part of a year now,” Bomengen said. “The difference is that last year, properties came on the market and sold quickly. This year, few properties have even been listed for sale.”
Bomengen said properties still sell fast — as long as the homes are priced appropriately.
“When properties are listed, they sell quickly if priced for what buyers consider to be in line with their value,” she said. “Although little has been available, buyers have been reluctant to pay prices they believe to be excessive. The buyers seem willing to wait. If a property does not go under agreement within three weeks of being listed and those sellers truly want to sell, the sellers should consider reevaluating their asking price.”
It was the first time sales agents saw a seasonal ebb and flow since Covid.
“We felt like it was 2019 again,” said Nathan Mastroeni, a broker at Four Seasons Sotheby International Realty. “It was what we’d consider a normal pace.”
Sales have historically slowed around the Christmas holiday, when homes are rented and people are traveling. But throughout the pandemic, local real estate agents didn’t see seasonal sales.
“This quarter definitely seemed better than the fourth quarter last year,” said Mastroeni.
Demand is still high, despite high mortgage rates. The current average interest rate for a 30-year fixed mortgage was 6.93% on Thursday, April 20. But, interest rates may start to drop. Some analyses predict interest rates will start to decrease at the end of the year.
“We expect that 30-year mortgage rates will end 2023 at 5.2%,” the Mortgage Bankers Association said in a December 2022 summary.
The national news points to a slowing housing market because of the interest rates. Mortgage applications for new home purchases decreased 25.2% compared to a year ago, according to the Mortgage Bankers Association.
“The decline in activity was in line with single-family housing starts that were 32% lower than a year ago. Higher mortgage rates and a weakening economy held back buyers at the end of last year,” said Joel Kan, the vice president and deputy chief economist at the Mortgage Bankers Association.
But local agents have long said national trends don’t apply to Killington.
“We are opposite of what you watch on the news,” said Brett Williamson, a broker at Killington Valley Real Estate. “We’re still seeing cash offers on nearly every property. In this market to be competitive, you almost have to have a cash offer in your arsenal in order to get it.”
Higher prices
The prices of homes selling today in Killington are substantially higher than pre-pandemic sales listings.
Houses that were selling in the $400,000 range are now selling between $600,000 to $900,000. And, the average sales price is around $717,000 in Killington.
“We don’t see many houses that are sub-$400,000,” Mastroeni said.
Homes are also selling faster. Before the pandemic, it was typical to see 10-15 homes on the market. On April 19, there were four homes actively listed in Killington and three homes under contract.
“We’re probably three times lower than where we should be house (inventory) wise,” Mastroeni said.
The average time a home sat on the market in the first quarter was 20-30 days — that’s still a shorter period of time compared to pre-pandemic real estate figures, when homes sat an average of 200 days before selling.
“There is no question that we would have seen more sales in 2022 than in 2021 if there had been more inventory available,” said Kyle Kershner a broker at Killington Pico Realty.
He said some homeowners are reluctant to sell because of interest rates.
“That makes sellers think, ‘maybe it’s not a good time to sell,’” he said.
But Kershner assured it’s a good time for sellers.
“It doesn’t make sense to wait,” he said.
He also urged buyers to not wait as the prices of homes in Killington only appear to be increasing — a sentiment echoed by Williamson.
“Our values are where they should be considering Killington is going nowhere but up,” Williamson said.
Second homeowners
Demographics haven’t changed. Killington has traditionally seen homebuyers seeking second homes from New York, Boston, northern New Jersey and Connecticut.
“They’ve always been our four top markets and we haven’t really seen that switch,” Mastroeni said.
Most of the homeowners are seeking vacation homes that they can rent when they’re not there.
While the Killington Select Board established short term rental rules in 2020, requiring people to register their homes and pay a fee, that hasn’t derailed buyers.
“It’s not turning people away that they have to register as a rental house,” Mastroeni said. “A lot of people from big cities assume they’re going to have to pay a fee.”
Mastroeni said most don’t expect to make money off their vacation homes. They say, “I want a vacation house and if it can cover my taxes, great, if it can cover my mortgage, even better,” Mastroeni said. “They want to use it for a handful of dates throughout the year but the time they’re not here, they want it to cover their tax bill.”
New Records
Meanwhile, Killington home prices are breaking sales records. Williamson has a home under contract for $3.5 million — which would set a new record. The previous sales record of $2.75 million was sold in 2021.
Killington is still one of the most affordable resort towns in the area. Neighboring resort towns are seeing significantly higher priced homes. Properties in Stowe and Woodstock are listed for $20 million.
“There’s room to move up,” Mastroeni said. “It’s shocking to see those houses. It definitely makes people go, ‘wait a second, what does $20 million buy me in Vermont?’ It’s a gigantic conversation — we don’t have the village infrastructure. Stowe has a village and they’ve had it for many years.”
Killington voters recently approved a $47 million tax increment financing bond to build the new Six Peaks Village to expand luxury slope-side accommodations at Killington Resort and bring new chairlifts and trails, upgraded base lodges. The village is a decadeslong vision for the town — but it’s unclear when the permits will be approved and construction will begin.
“I don’t think in 10 years Killington will be at that pricing,” Mastroeni said. “That village infrastructure makes a difference. It gives a special reason to come — to entice people wanting to come to Vermont and spend that really high dollar number.”
Real estate agents predict better real estate activity next quarter.
“I wish I had a crystal ball” to know where the market was going from here, but “It’d be hard for me to fathom that prices will drop. Especially now with (Killington’s newly passed municipal) water system, talk of the village happening in my lifetime, new base lodge, and all the four-season recreational opportunities here,” Williamson said.
