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They’re Going To Stay In Their Big Houses Until The Market Provides For Them

A weekend topic starting with Vermont Public Radio. “What are the causes of Vermont’s tight housing market — and why aren’t things getting better? Peter says he and his wife want to live somewhere on the I-89 corridor: Norwich, Montpelier, Waterbury. In terms of price, they can go up into the $300,000 range — but Peter says most of what they’re finding is pretty old, from the 1800s and early 1900s. And a lot of it is not in great shape.”

“‘Part of me, I love those older houses and I’m excited about like, ‘Hey, we’ve got this piece of Vermont history,’ he says. ‘And on the other hand I’m like, ‘Hey, you can’t heat that piece of Vermont history.'”

“‘I do think that we have a housing crisis in the state. And so I think that we need all hands on deck,’ says Maura Collins, head of the Vermont Housing Finance Agency. The agency finances and promotes affordable housing for low- and moderate-income Vermonters.”

“Collins says the so-called ‘housing crunch’ comes down to one central issue: affordability. ‘There is a joke that all the housing in Vermont is affordable if you were someone who was super rich,’ she says.”

“Collins says household incomes in Vermont have been pretty much stagnant for years. ‘They’re not moving up as fast or as high as housing prices have,’ she says.”

“Some important context here: Vermont isn’t the only place with a tight housing market. ‘It is across actually the United States at this point,’ says Debbie Jensen, president of the Vermont Association of Realtors.”

“She said in the seven days prior, there’d been 64 new listings in those three counties. ‘And those are residential, multi-family, condos, and it includes land also. And the median price is $349,000,’ Jensen says. ‘I can’t tell you that there’s a lot of millennials that can afford that type of price range.'”

“Jensen says she is seeing these prices for condos in Chittenden and Franklin counties. And she says that’s leading more seniors to stay put, rather than sell their larger homes to, say, young families. Meanwhile, young people who have started out in a condo? It’s hard for them to upgrade, so they’re not selling either.”

“‘That’s the dichotomy here, is that we don’t have that step from the $120,000 condo to the … $275,000 three-bedroom house. So that’s the crunch’ Jensen says. ‘So people are staying and they’re kind of making do. They’re going to stay in their condos, they’re going to stay in their big houses until the market provides that for them.'”

The Laconia Daily Sun in New Hampshire. “If you own a single-family home in Gilford, it’s an unequaled time to sell. It’s ‘list opportunity or missed opportunity’ time. Let me tell you why. In 2018, the median ‘closed’ price for single-family homes in Gilford was the highest since 1997, which is as far back as data go in the New England Real Estate Network Multiple Listing Service database.”

“Prices won’t climb forever. Don’t just take my word for it; ask someone who didn’t sell at the previous property value peak in 2006. Gilford single-family home values subsequently plummeted 30 percent over the next three years (that’d be like a $92,100 loss in value from today’s median price) and sellers had to either absorb the loss or wait with regret for well more than a decade for prices to recover.”

“Let me make a very simple case for why I think home prices are more likely to stall or decline than continue to climb much further. Let’s compare two factors: Gilford home prices and real median household income in New Hampshire and Massachusetts, where the preponderance of out-of-state buyers come from.”

“Gilford house prices grew 115.2 percent between 1999 (the market bottom) and 2017 (the most recent year for which income data are available). During that same timespan, median household income in New Hampshire and Massachusetts grew just 10.04 percent and 12.75 percent, respectively.”

“In short, home price growth in Gilford is far exceeding income growth in New Hampshire and Massachusetts. Add the chilling effects recent interest rate hikes have had on homebuyers and it becomes difficult to imagine that home prices will somehow continue to magically and indefinitely outpace earnings at the rate they have been.”

“Think about it: How do you buy a house you can’t afford, now that banks aren’t offering home loans to just about anyone, including unqualified buyers, as they did during the subprime mortgage crisis in 2006? You don’t.”

“Buyers become forced to wait until: a) prices drop, b) income skyrockets, or c) lenders repeat the mistakes of the past and offer mortgages that allow buyers to purchase more home than they can realistically afford. That’s why I think the divergence between home price and income growth suggests a coming correction in property values.”

“So please take note if you’ve been waiting for a great time to sell. It’s now. Prices are at their apex and days on market have plummeted. Inventory is low, giving sellers who list now a head-start advantage before inventory and competition inevitably increase.”

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This Post Has 34 Comments

  1. The last article was written by: Brent Metzger is a Realtor® with Roche Realty Group.

    I said long ago people in New Hampshire are the most honest when it comes to real estate.

  2. ‘So people are staying and they’re kind of making do. They’re going to stay in their condos, they’re going to stay in their big houses until the market provides that for them’

    Debbie is saying people in Vermont are greedy bashtards.

    1. The entitlement mentality is disgusting. Once house prices reach some peak dollar amount, all these people think they deserve that, as if anything smaller is an insult and is ripping them off. Nevermind the fact they are the ones actually ripping people off.

  4. Don’t worry comrade, once Bernie is president, he will appoint AOC as Secretary of Free Houses and you will all live in your dream house for free.

    1. By: Charles Curtis | June 18, 2016

      “Socialism failing to work, as it always does, this time in Venezuela. You talk about giving everybody something free and all of a sudden, there’s no food to eat. And who do you think is the richest person in Venezuela? The daughter of Hugo Chavez. Hello! Anyway, 0-and-2.”

      There isn’t much context here, but it appears watching Milwaukee Brewers infielder Hernan Perez — a Venezuela native — at the plate was what got Scully on the topic.

      https://ftw.usatoday.com/2016/06/vin-scully-dodgers-socialism-rant-video

          2. Goedeck,

            While I generally agree with your comment, I don’t see how these images in particular advance the globalist agenda. The globalists control the MSM and want us to embrace socialism. These images evoke the opposite response. Please help me understand what I may be missing.

  6. ‘There is a joke that all the housing in Vermont is affordable if you were someone who was super rich,’ she says.”

    Heckova job, Ben & Janet.

  10. And the median price is $349,000,’ Jensen says. ‘I can’t tell you that there’s a lot of millennials that can afford that type of price range.’”

    ___

    They can afford $1200 iphones, $3500 Macs, $12 craft beers and $17 avocado toast sandwiches. Weird huh?

    https://preview.tinyurl.com/y4leasv5

    “MILLENNIALS EXPECT TO spend more on their dog over the pet’s lifetime than they will on their own lifetime health care costs, according to findings published in a May survey from TD Ameritrade. The survey of 1,519 millennials could indicate the younger generation vastly underestimates the cost of health care in America, or the findings could reflect that millennial spending values are significantly different than those of previous generations.

    However, data suggests millennials are not spending money on items that further traditional long-term goals like retirement or homeownership. For instance, the Charles Schwab survey revealed that 60 percent of millennials buy coffee that costs more than $4 per cup, 69 percent buy clothes they don’t necessarily need and 76 percent will spend money on the latest electronic gadget.”

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