Demand pushes prices up, particularly in Killington
By Polly Mikula
“Over $70 million year-to-date is more than the last three years combined,” Heidi Bomengen, owner of Prestige Real Estate, which sells real estate exclusively in Killington, wrote in the company’s quarterly newsletter published in October.
Last year, Killington real estate sales topped $46 million — a record — but this year sales are on pace to more than double that.
“Real estate records have been shattered by every measure: market revenue, sales volume, average sale price, days on market and inventory,” Bomengen wrote.
Tricia Carter of Ski Country Real Estate concurred, saying this was definitively the hottest the market has ever been — “Ever!” both for volume of sale and prices garnered.
In Killington, 184 properties have sold year to date, according to Bomengen. Sixty of those were homes, which sold for an average price of $675,000.
“That is more homes sold than the last two years combined with the average sale price climbing by more than 50%,” Bomengen wrote in the newsletter.
In 2021 alone, there was a 35% increase in the average sale price of a home from January to October 2021 ($500,000 to $675,000), according to data from Prestige Real Estate. For a condo, the average price is over $260,000, which represents 16% increase ($225,000 to $260,000) over the first three quarters of the year. And that’s on top of a 14% increase in average condo prices in 2020 over 2019. (House values in 2020 remained close to 2019 values.)
On average, homes in Killington sell in under 50 days and condos under 30 days, with the median number of days much lower, Bomengen noted. “The median number of days on market is just nine days!” she wrote in a letter to Killington residents, Oct. 1.
Bomengen has called it, “absolutely unbelievable” and “mind-boggling.”
Nathan R. Mastroeni, MBA, Sotheby’s regional manager of offices in Rutland, Stowe, Middlebury and Burlington, with about 50 real estate agents added: “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,” he 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 explained. “Then the pandemic put the market in overdrive. And this is how it’s been for the past year plus even though prices have increased the demand is still very high.”
2020 “was basically the best year ever” for real estate sales, Mastroeni said, and 2021 has surpassed even those records — by a long shot.
Why the demand?
“There is a strong draw to Killington,” Carter explained. “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, saying that a quick look on the property transfer list each month consistently shows this trend. She noted, however, that many of those buyers have stayed and become full time residents, adding students to the local school populations. “Which is a boom for everyone,” she said.
The 2020 U.S. Census bore that out with the population of Killington growing by 73.5% over the past decade — the largest rate increase in the state. In real terms, 596 full-time residents joined the town’s 2010 population of 811 for a 2020 population of 1,407 residents.
“Resort markets definitely have been the hottest spots in the state,” Mastroeni 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.
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… but 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!”
Carter also noted that low interest rates have played a part: “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.
A study done by Axios can help explain. It found that Vermont was among the top states high-income Americans moved to during the pandemic. The study analyzed the change among Americans earning more than $100,000 per household and found that Vermont had the highest percent influx of high-income earners moving in and the fewest high-income earners leaving.
“The findings from this study are totally in line with what we have witnessed with real estate purchases in Killington during the pandemic,” Bomengen wrote in a blog post. “The pandemic forced employers to find ways to accommodate remote workers from all over. Being able to now work from anywhere, people moved to Killington from cities like Boston, New York City, and Philadelphia, as well as, from densely populated areas like Long Island, Connecticut, and New Jersey. We have found that many choose Vermont because of the open space, the lack of crowds in stores and restaurants, the good school systems, the affordable real estate, and the proximity by car to those cities they left behind.”
In early March 2021, a 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 prices 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. This year, in just the first three quarters of 2021, eight homes sold for over a million.
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.
Killington also makes the “Top 5” of the theshorttermshop.com’s 2021 rankings and placed fourth on Rented.com’s list of top places to buy vacation rental property.
“There has never been a better time to buy than in 2021. Covid-19 has altered the tourism industry, shifting the demand away from big hotels and toward privately owned homes…” according to theshorttermshop.com.
Of Killington, it said: “It is a place of incredible natural beauty, including snow-capped mountains, vast lakes, winding rivers, and ancient forests. Killington is an outdoor person’s paradise, and millions flood here every year for abundance of fresh air and the great outdoors.
“This also makes it a hot area for vacation rental opportunities. Killington has a huge number of stunning cabins, chalets, and big, traditional homes to be snatched at a reasonable price…
“Killington is popular among skiers and snowboarders in the winter time, but it’s also a top destination in the summer. This means property owners have a full year of rental opportunity, making Killington a lucrative opportunity,” the analysis concluded.
While nearly all real estate agents say: “I wish I had a crystal ball,” when asked about about future predictions for local real estate trends, the question is constantly on their minds.
“It’s anybody’s guess how long this extraordinary seller’s market will continue!” Kershner wrote on the Killington Pico Realty Facebook page, Nov. 3.
“The market overall has low inventory and prices are still climbing, going into the winter it will be interesting to see if that continues,” Mastroeni noted.