Driven by a slow housing market Vermont home prices dipped slightly, but are the least affected by the financial crisis in the nation. The state had the lowest number of creative adjustable rate and subprime mortgages made by national bankers in the boom resulting in the nation’s lowest foreclosure rate.
It isn’t any coincidence that a number of economic indicators are already suggesting that what ever recession exists in Vermont has bottomed out and the state is pulling into a recovery. Vermont has one of the better unemployment rates in the country and has only seen housing prices fall from an average of 3 to 6%.
That’s not to say hard times haven’t impacted Vermont. Job lay-offs have increased and business closings are up. It was the first time in years that Vermont had any sort of unemployment problem, which led to some foreclosures, but industry data indicates Vermont has the lowest foreclosure rate in the country.
Housing sales got a boost from the first time home buyers’ tax credit and should see an improving trend in 2010, aided by the expansion of the credit to move-up buyers. The one part of the market that has seen a blow is the second home market, where homeowners are more likely to walk away from mortgages as a result of being unable to pay the mortgage.
In Burlington home sales rose in the spring as a result of the tax credit, but that’s also a typical cycle for the market, driven by better spring time weather following Vermont’s bitter cold winter months. The market sustained one of the lowest levels of deflation in the country, and Burlington is forecast to see home prices increase slightly in 2010 at 2.1% for the year.
The lower $150,000 to $200,000 price range saw more sales in Hartford, pushed by the first time buyers’ tax incentive. Hartford saw record high prices develop during the national boom only to see them soften as the market’s volume of sales slowed. Vacation home buyers are looking for deals in Hartford, but prices haven’t fallen enough on most properties to draw enough buyers seeking discounted properties to make purchases in greater numbers. Housing Predictor forecasts Hartford home prices to rise a modest 1.8% in 2010.
New residents including retirees from nearby New Hampshire and Massachusetts have become permanent residents of Vermont in growing numbers seeking a higher quality of life, and everything that the state has to offer in terms of outdoor activities like hunting, snow-skiing and boating.
In Waterbury at the Crossroads of Vermont the financial crisis slowed home sales for a while with the lack of readily available mortgage financing. But local lenders are approving mortgages in larger numbers these days giving the marketplace a boost. The higher priced homes that make up most of the housing inventory in Waterbury are beginning to see movement again in terms of sales, and are forecast to appreciate 2.4% on average for the year.