Interest exceeds inventory: Local real estate hits records

Vermont lifestyle sought

By Polly Mikula

“It’s a seller’s market with way more buyers than you have inventory available for them to buy. It’s the true textbook definition, the power is in the seller,” said Nathan R. Mastroeni, MBA, Sotheby’s regional manager of offices in Rutland, Stowe, Middlebury and Burlington, with about 50 real estate agents combined. “One agent recently had 17 offers to purchase a property,” he added — a jaw-dropping number, but one that is not uncommon these days.

Kyle Kershner, broker-owner of Killington Pico Realty, said that he recently had one Killington property garnered 18 offers and a Pittsfield property get 11 offers, which “means a lot of potential buyers are still looking,” Kershner said.

Before last year, most markets in Vermont “had been seeing a slow steady increase building up to what was really already a strong market in 2019,” Mastroeni said. “Then the pandemic put the market in overdrive. And this is how it’s been for the past year even though prices have increased the demand is still very high.”

“This past year was basically the best year ever,” Mastroeni said.

In Rutland County, total real estate saw a decrease in inventory of nearly 10% in new listings in 2020 (from 1,207 to 1,092) but an increase of 15% in listings sold (from 851 to 975). The average sold price rose 23% (from $198,033 to $245,219).

The average single family home sold for $257,129 (up 25% over last year) and for condo-townhomes was $184,094 (up 12%), according to regional data provided by Sotheby’s.

“Prices are definitely up and they have been trending upward since the last low in the market after the 2008 crash,” Mastroeni said.

Tricia Carter of Ski Country Real Estate in Killington said definitively that this was the hottest the market has ever been — “Ever!” both for volume of sale and prices garnered.

Heidi Bomengen from Prestige Real Estate, which sells real estate in Killington exclusively, concurred, calling it, “absolutely unbelievable” and “mind-boggling.”

“It’s truly hard to believe it’s been sustainable like this for so long,” Bomengen said. “And there’s no signs that it’ll slow down, except that there’s just so little inventory on the market right now. A house will go up and be sold in three days!”

“Back in the 80s when a lot of new condos were built, interest was tempered by high interest rates,” Carter explained. “That really held back the steamrollers, so to speak,” she said, explaining that the interest rates were at least 16%, if not higher, back then.

However, today’s low rates don’t fully explain the hot market. “I’ve never seen so many cash buyers,” Carter added.

Motivations for making the move

“More people want to move because they can work remotely,” Mastroeni said. “People want to live where they play. A lot of people have just said, ‘Hey let’s do it!’ If there’s a decent internet connection, I can live there’,” Mastroeni said of the importance of broadband connectivity.

Lifestyle generally, and outdoor activities specifically, are the main reasons Mastroeni says people seek homes in Vermont.

“Recreation is the biggest driver,” he said. “The winter fun lifestyle here, particularly skiing, and now the installation of summer biking and so much more… it’s everything, including the laid-back slower pace,” he said, adding, “I know, I came from outside of Philadelphia so I can tell you first hand!”

“There is a strong draw to Killington,” Carter said. “City people are wanting to be more adventurous with their time and want to be in a place they can recreate year-round. Killington is just so well situated for that… plus we have lots of restaurants and entertainment right here. Everything is so close.”

Carter noted that buyers are almost exclusively from out-of-state. Noting that a quick look on the property transfer list each month consistently shows buyers from New Jersey are heavily investing in Killington property. And she noted, contrary to some, that many of her buyers are planning to stay and be full time residents, adding students to the local school populations.

“Which is a boom for everyone,” she said.

“Not every market segment has seen record breaking numbers — commercial sales didn’t have their best year ever,” Mastroeni said. Nor have all towns in Vermont enjoyed equal interest.

“Resort markets definitely have been the hottest spots in the state,” he said. “People in Boston who never thought they could live in Killington have now decided to give it a try. They can work from home now and go skiing three days a week — or for their lunch break. That was a driver for a lot of people saying, ‘Hey, if I’m going to move I want to move there’,” he said.

Stowe has been similar to Killington in its resort appeal, Mastroeni noted, with Middlebury and Burlington markets much more focused on residential properties and not quite as “hot” as second home sales.

Real estate sales data shows 2019 hit records, which were then beat in 2020 and now the first quarter of 2021 is beating those.

“Killington real estate sales broke records in 2020 in terms of volume and revenue,” Bomengen wrote in Prestige’s quarterly newsletter published in January. “By all accounts 2019 had been one of the best real estate markets in decades in Killington and those results were topped in 2020 when open for business only nine months of the year. One could argue that Covid-19 fueled the motivation to buy real estate in a less densely populated area known for outdoor and naturally ‘socially distanced’ activities.”

In 2020, Killington real estate sales topped $46 million for the first time ever, according to Bomengen.

The average sale price for a house in Killington was just under $500,000 (just under 2019’s record-breaking year); for a condo it was $225,000 (up 14% over last year); and for land it was $125,000 (up 27%).

But, with the first quarter of 2021 nearly complete, Bomengen says the 2020 records are getting crushed. According to her data, property sales in Killington will have exceeded $17 million in the past three month alone, the previous record had been just over $6 million for that quarter (see chart, right).

$2.65 million record sale

In early March, a stunning trailside five-bedroom, five-bath, three-level contemporary house set on an almost one-acre lot set a new record for single-family-home sale price in Killington at $2.65 million.

The previous record was $2.4 million, noted Kyle Kershner, broker/owner of Killington Pico Realty, who listed the home. That house was larger and was on the market for 1,200 days, he  noted.

Kershner said the $2.65 million home garnered five cash offers within two days of the listing. The agent for the buyer made a full-price cash offer with no contingencies on behalf of a Pennsylvania client, who had not viewed the property in person nor had owned a Vermont home before.

The amount of interest in this property was indicative of the increasing demand for luxury properties, Kershner said.

“In the last 15 years, Killington has averaged one $1 million-plus sale per year, but there were five in the last year, not counting pending sales,” Kershner said after the sale went through earlier this month.

Short-term rental factor

Out-of-state buyers tend to be geared towards resort locations.

“We hear, ‘I like Killington,’ or ‘I like Okemo’ a lot,” said Mastroeni. “Many will also determine their range of interest by a maximum drive time from Boston,” he said.

“They specifically want to be close to a resort because of the rentability,” he added. “They know they can rent it on AirBnb or VRBO when they’re not using it to help defray costs. Even if it’s just a little, like paying for the taxes on it, it can make a big difference,” he said.

Kershner agreed, noting that a substantial number of buyers use their properties and then rent them out for short term rentals when unoccupied.  He said the recent hot market in Killington goes hand-in-hand with and is “driven by the short-term rentals trend.”

He also has seen more buyers (individuals and companies) invest in multiple condos to use for rentals.

“A 2019 Vacasa study named the top 25 markets for buying a vacation rental and listed Killington as No. 2 in the nation,” Kershner noted.

Future predictions

“We don’t know what’s going to happen next, the market can change so fast. I would say vaccines maybe could change that? If businesses in the cities start to say that their offices are going to open and call remote workers back. I don’t have a crystal ball. We just don’t know,” Mastroeni said.

Carter echoed him, saying: “I would love to know, I wish I had a crystal ball.”

Bomengen said that while she couldn’t see too far ahead, she was pretty sure the next quarter would be strong. “We have so many sales pending that will be counted in the next quarter. I really don’t see it slowing down.”

Bomengen also noted that the market could see more inventory soon as the ski season (rental season) ends and homeowners are looking at the carry-over cost of their properties going into the summer.

“Any body still sitting on the fence should look at the prices —what they could get for their home— and they’ll understand that this is the time to sell,” she said. Adding, “The market has really not been predictable for the past two years, but it’s been strong, so I guess we’ll see what the future brings.”