Manchester Vermont Real Estate Blog

The real estate market in and around Manchester continues to be a buyer’s market as evidenced by the performance of the market in the first quarter of 2010. There is a large oversupply of inventory on the market compared to the number of buyers. Smart sellers continue to lower their prices as they compete for the attention of the limited number of buyers.

New Listings – 161 new listings came on the market in the 1^st quarter: 55 were under $250,000, 65 were between $250,000 - $500,000, 28 were between $500,000 - $1 million, and 13 were over $1 million.

Price Reductions – there were 130 price reductions in the 1^st quarter, the average reduction was 7.6%.

Under Contract – as of the end of the 1^st quarter there are currently 34 properties under contract: 14 are under $250,000, 12 are between $250,000 - $500,000, 5 are between $500,000 - $1 million, and 3 are over $1 million.

Sold – 34 properties sold during the 1^st quarter: 17 were under $250,000, 11 were between $250,000 - $500,000, 6 were between $500,000 - $1 million, no properties sold over $1 million. The average property sold for 90% of asking price during this period of time.

To put the number of sold properties in perspective I have looked at the 1^st quarter performance for the previous 5 years: Q1 2009 – 24 sold, Q1 2008 – 44 sold, Q1 2007 – 54 sold, Q1 2006 – 54 sold, Q1 2005 – 61 sold. So we have recovered somewhat from the poor performance of 2009 but still have a ways to go to get back to the volumes we saw during the last peak years.

Turning our attention to the number of properties currently under contract we can begin to estimate what the 2^nd quarter is going to look like. The typical time to close tends to be somewhere around 45 to 60 days. So the current under contract number (34 properties) represents roughly half to two-thirds of what we might expect for the quarter. The next month’s activity will make up most of the additional sales volume for the quarter. Considering April is typically a slow month I am estimating that the final sales volume for the 2^nd quarter will come in between 50 – 60 properties sold unless we get a significant bump from the expiring home buyer tax credit.

Expanding our focus beyond 1^st quarter activity, we find that there are currently 525 active listings on the market. Looking at the trailing 12 months (4/1/09 – 3/31/10) we see that a total of 201 properties sold. This gives us a 2.5 year supply of homes on the market if the next 12 months are comparable to the previous 12. This type of oversupply will continue to put downward pressure on prices until we reach a better balance between buyers and sellers.

In reviewing first quarter performance, it raises the issue of seasonality. I am frequently asked by sellers, “When is the best time to put my house on the market?” From past experience I can say that late spring through early fall feels like the busiest selling season in our area, and conversely that the end of year holiday season and mud season seem to be our slowest times of year. But up until now I haven’t done any statistical analysis to back this up. In the near future I plan to and will share the results with my readers in a future blog post.

As a reminder, the statistics that I provide are based on the mls data for the 10 towns of Arlington, Danby, Dorset, Londonderry, Manchester, Pawlet, Peru, Rupert, Sunderland and Winhall. Some may argue that the activity in some of the outlying towns does not represent the market in Manchester. I would counter that the level of activity in those towns is fairly small compared to Manchester and a couple of the other larger towns and that exclusion of the smaller towns would not significantly alter the statistics or the conclusions that they suggest.