Manchester Vermont Real Estate Blog

One of the primary focuses of this blog is statistical analysis of the trends in the local real estate market in and around Manchester, VT. Having just concluded the second quarter of 2010, with some delays and a little procrastination I give to you the mid year review.

Looking at the residential real estate market in the southern Vermont towns of Manchester, Dorset, Arlington, Sunderland, Winhall, Peru, Londonderry, Danby, Rupert and Pawlet for the 12 month period of July 1, 2009 to June 30, 2010 we find that 216 properties sold with an average sales price of $350,000 and a median sales price of $250,000.

The numbers for the prior 12 month period of July 1, 2008 to June 30, 2009 show 164 properties sold with an average sales price of $394,000 and a median sales price of $299,000.

Comparing the two years we find that the average sale price declined by 11% while the median sale price declined by 16%. On the bright side, the transaction volume increased by 32% as buyers have begun to reenter the market.

It is also worth comparing the latest 12 month period to the results for the 2009 calendar year. My previous year end report showed that the average sale price had been $326,000 and the median sale price had been $231,000. The numbers reported above for the 12 months ended June 30, 2010 show both of these numbers have increased. The average sale price has gained 7.4% and the median sale price has gained 8.2%. This trend hopefully indicates that prices bottomed out sometime in 2009 and are slowly beginning to recover.

Turning our attention to the first half of 2010 we see that 87 properties have sold in the area. The average sale price of these 87 properties is $370,500 and the median price is $257,500, both above the trailing 12 month figures. This is yet another sign that prices are strengthening.

The local market won’t truly recover until transaction volumes return to levels that we saw in the early and middle years of the past decade (in the 270s in ’06 and ’07, in the 360 to 380 range from ’02 to ’05). So far this year we have seen 98 transactions as of July 26, 2010 (11 additional sales since July 1) with another 36 properties currently under contract. We will need to have another 91 properties go under contract and close between now and the end of the year in order to reach 225 transactions for the year. Given how quiet the market activity has been lately it would seem unreasonable to expect anything more than this for the remainder of the year, and even 225 may be a stretch.

The last piece of the equation in measuring the health of the local market is the current inventory of properties for sale. As of July 26^th there are currently 606 properties available on the market. Based on the 216 properties sold over the trailing 12 months we come up with a 2.8 year supply of properties based on current demand.

Until the number of buyers increases and the supply of properties decreases any price gains we have experienced will be on shaky ground and the positive trend noted earlier could quickly reverse itself again. Let’s hope the exceptionally low interest rates currently being offered by the banks (30 year fixed with zero points persistently below 5%) will draw additional buyers back into the market. If so we may be looking back in a couple of years at 2009 as the bottom of the market and 2010 as the first tentative steps towards recovery.