Are Out-of-State Buyers Impacting the Vermont Real Estate Market?

Many of our clients are asking about the pressure out-of-state buyers have been putting on our local real estate markets. Read more about our take on the matter!

Vermont is well known as a haven for second homeowners. A recent study places the Green Mountain State second in the nation for vacation homes per capita. While second, third, and even fourth homes account for 17% of the state's housing inventory, more and more out-of-staters are looking to Vermont to escape the new reality of COVID-19. So as you look for a new home, should you be prepared to compete against a cash offer from a New York or Boston couple looking for a home away from home?

To start, the Northwest Vermont real estate market is highly competitive. Offers are coming in at or above asking, and if you don't get an offer submitted within 48 hours, there's a good chance you'll miss it. While there are more offers from out of state, several factors place significant pressure on the market than a desire to get away from it all. There is heightened competition all over Vermont, and the factors driving competition is dependent on each market. 

Longtime popular second-home markets like Stowe and the Mad River Valley are facing extraordinary pressure from out of state buyers. Listing agents in these areas are receiving offers sight unseen from Southern buyers. The competition from non-Vermonters for these homes is growing each week. 

High-end markets around Burlington and Montpelier are starting to feel the impact as well. Buyers from Boston and NY with deep pockets are seeking a higher quality of life with a strong internet connection as companies embrace remote work. While we’ve seen some out-of-state buyers looking for a second home, the bulk of our out-of-state buyers are dreaming of relocating to Vermont full time.

Other markets along Lake Champlain and in the mountains aren't facing added pressure from out-of-state buyers, rather in-state buyers are gobbling up properties left and right. Vermonters are looking to traditional camp spots to escape the day to day of COVID-19, embracing a family campground mentality. While in-state buyers are adding pressure to the market, they aren't the most significant factors.

So, what are the other factors that are increasing competition?

Before COVID-19 entered our shared vocabulary, Northwest Vermont experienced a competitive seller's market, especially in Chittenden County. Recent events have only magnified the pressure from low-inventory and historically low-interest rates. We're now seeing pent up buyer angst creating multiple offer situations - a seller's dream scenario. 

With nowhere else to go and access to cheap money, more and more buyers are entering the market. On the other side of the table, fewer sellers are listing their homes. COVID-19 created a fear of job loss for many Vermonters who might have been planning to upsize, downsize, or relocate out of state. The U.S. economy's abrupt stop is making many in Vermont tighten their purse strings and sit tight until the pandemic clears.

Competition is stiff in markets around Burlington and popular second-home markets like Stowe. We could see this trend spill over into Franklin and Washington Counties, where affordability reigns supreme. Millennials who are ready for suburban life but don't have the capital to move into popular locales will extend their dollar and commute as they look to St. Albans and Barre.

So are out-of-staters increasing the competition of an already limited real estate market? Like always, it depends on location. Chittenden County has been facing pressure due to low inventory for years. An influx of out-of-state relocators only increases the competition. Now more than ever, buyers need a strategy in place to make a competitive offer. On the other hand, homeowners who have been thinking of selling will find plenty of pricing leverage in a competitive market. 

Want to learn more about your market? Connect with our friendly and knowledgeable team of Realtors today.