When compared to July, August was a decent month in the world of real estate numbers, especially considering the fact that August typically slows down, as families squeeze in their final summer trips, kids go back to school and parents focus their attention on getting everyone settled back into the school year routine. Interest rates also came back down a little bit this month, prompting some to get back in the market that had previously taken a pause.

The Cooling Off Continues

New listings across the entire state were up 2.6% from July and closed home sales saw an increase of almost 24%. Alternatively, in Chittenden and Franklin counties those numbers were even stronger with almost 12% more new listings coming on the market, over 16% more homes going under contract and a whopping 34% more homes closed! 

However, when we look back a little further, we see a slightly different picture than the short window that the numbers above give us - year over year, new listings were down over 5.5%, while 12% fewer properties went under contract and 20% fewer homes sold. And if we zoom out even further and look YTD (Jan 1st to August 31st), in 2022 home sales across the entire state fell by 13.3% compared to 2021 and closings dropped by over 18% - confirming what we already knew, which is that the market has been steadily (and more suddenly in the recent months) cooling off. 

The Bottom Line: The low inventory in our state is still a huge problem when it comes to both affordability and to supply in general. Inventory is a main driver in home prices and the more we continue to see such a low number of homes for sale and fewer new homes coming on the market, the more prolonged the challenges we currently face surrounding home prices and availability will be. 

Home Prices Trend Down…Finally!

When it comes to home prices, we are seeing things start to move in the right direction (at least what we think is the right direction, though some sellers may disagree ;)). Compared to July, the median sales price in Chittenden and Franklin counties was down just half a percent while statewide we saw a 5.5% drop, with the median home selling for $350,000. 

Price drops are also at the highest numbers we’ve seen in a while with 368 homes across the state of Vermont seeing some form of price adjustment in August, 79 of those coming from Chittenden and Franklin counties. These price adjustments don’t mean a whole lot since they are price adjustments to homes that were overpriced to begin with, but it does go to show that the days of overpricing and testing the market with your home have come to an end. You are much better off pricing slightly below market value and being “the best deal” out there than sitting around accumulating days on the market while you come back down to reality on your home's value. 

The Bottom Line: Sellers are and will continue to have a hard time adjusting to the changes in the market. Especially because, as we see from the numbers above, some areas of the state get hit with these changes harder and faster than others. For the last 2+ years, sellers have had it extremely good with sky-high selling prices, waived inspections, and rock bottom days on the market - and it only makes sense that they want that to continue. However, it simply isn’t going to and it will take a little while for things to adjust as more homes close out at these slightly lower prices and price adjustments get made as people start to see the downward trend. Low inventory is of course a driver of home prices, so the more inventory we accumulate the more helpful that will be to home prices as well. It is also worth mentioning that even with the slight decrease in home prices, a seller's situation right now is really not much to complain about when you consider that the average home is still seeing an 18% increase in the sales price from just last year, which we know already saw high selling prices to begin with!)

Want to know more about the market and how you can best navigate it? Get in touch - I love talking about real estate, learning more about your current situation and goals and seeing how I can help!