Vermont’s Market?

Helping you decide whether to buy or sell in the near future.

The deadline is here. The federal homebuyer tax credit opportunity will almost surely be gone by the end of the business day tomorrow (June 30^th). Despite pushes by states like Massachusetts and organizations like the National Association of Realtors® (NAR) to once again extend the tax credit, it is unlikely that Congress will make such an amendment.

 According to the NAR, up to 180,000 home buyers will miss out on the tax credit. NAR President Vicki Cox Golder told LoanSafe.org that these buyers will miss the June 30^th deadline through no fault of their own. “These are not buyers who just entered into the market. These are buyers who previously met all the qualifications for the tax credit, but find themselves at the mercy of a workflow jam with lenders or other delays…” said Golder. “It would be a tragedy for them not to be able to complete the purchase in time to claim the credit.”

 The NAR is pushing hard for Congress to quickly pass some legislation to extend the tax credit deadline, but many believe they will not be inclined to do so. The Massachusetts Association of Realtors is asking for a 90-day extension, giving buyers until September 30 to finalize their deals. But the Wall Street Journal is reporting that although Congress did extend the tax credit last fall, they feel it is unlikely to happen this time.

So how is this affecting us locally? Well according to NAR estimates, approximately 400 home sales in the state of Vermont will miss the deadline. That inevitably means that some folks here in the greater Burlington area, Chittenden County, and the rest of Vermont are going to be affected. And although we won’t know for certain until the end of the business day tomorrow, it appears June 30^th will be the final deadline.

First, you won’t be able to do this if you are a repeat buyer and you have a home to sell for obvious reasons, unless you can afford to buy another home without selling yours first. So, you’ll need to run, not walk, to a lender who is very familiar with all the different lending programs; VHFA (for Vermont real estate), FHA, VA, and conventional loans. You’ll need to get a quick pre-approval as well as reasonable assurance that the loan of choice is going to have good odds of closing by June 30.

Time is running out for the $8000 home buyer tax credit

Of course, the bigger problem is getting a deal signed by April 30. That’s where I (and other buyer agents) come in. You’ll need to stack the deck in your favor by joining forces with a buyers agent who is going to spend quality time to help you find and visit the homes you want to see up close.

Once you find THE place, you’ll want help in structuring the offer based on comps, market conditions, and certain conditions (contingencies) that make sense for a particular property. The idea here is to be able to buy at the lower end of the price range without killing the deal with unreasonable offers.

Then, it’s off to the races after reaching an agreement (signed contract). The closing process can be smooth, or not. Again, a buyer agent can oversee this phase of the transaction to avoid any unnecessary delays. My point is there is no time to waste at any point in the buying process.

The question remains, what happens if you miss this boat? Will life go on, just like it did after Y2K? An $8,000 credit is nothing to sneeze at, but like we all know in the business, people buy whenever THEY are ready, not when some program says to. At sunrise, May 1, 2010, there will still be an ample supply of homes to choose from, prices will still be benefiting buyers after 2 years of gradual declines (No, not lake front!), and mortgage rates will still be south of 6%, which is really a very good rate historically. However, years from now, there will be those people who brag at barbecues that they got a great deal on a home, plus $8,000 free and clear from Uncle Sam, and are now living the American dream..right Ryan?

Looking at these numbers, Chittenden County residential real estate as a whole has really stayed pretty steady. The correction was minor when comparing percentages in price per units sold with 2008 stats. The Burlington area market has seen a drop in prices per unit but total number of single family homes, condos, and multi-family sales in 2009, when viewed from a combined perspective, is actually above the number of units sold in 2008 by 83 units!  Any thoughts?

On 2/18/2010, I went to an education update on the appraisal process for existing single family homes in Vermont, and here’s what I found.

Appraiser’s are having a difficult time with their valuations of Vermont real estate these days due to the lower than normal volume of sales to use as comparables (land is even more difficult). Lower sales volume means fewer recently sold properties that are going to be available as good comps. All of the different features in a home comparison aren’t going to match up as closely, so you’re going to end up with a wider range of value due to approximate (rather subjective) adjustments that must be made to get homes equalized for a fair comparison. It’s one of those things that is part art and part science. Nowadays the art part is more dominant vs. the science, meaning one is less likely to get a precise value based on a really good comparable. As a Buyer’s agent, what this means for me is that I can be an even greater value  to my clients.  For sure, I need to be using correct assumptions about the value of different adjustments for each feature, but a buyer needs to have help in obtaining information about what price range makes sense for a particular property. Getting help in determining a realistic price range helps everyone reach common ground faster in regards to an offer that a seller will accept (assuming it’s not a short sale or foreclosure, or a fixer upper).

Even though I’m not an appraiser, I can at least do the math in a simple comparable market analysis to give my buyer a general idea about value in any given Chittenden County, Vermont  property.

So, it all comes down to the supposed valuation of a property vs. what a ready, willing and able buyer offers to pay. Let the games begin!

I saw this article online today and thought, “Man, it’s good to be in Vermont.”  Just thought I’d share it with you all.

Phoenix Office Landlords Offering up to 15 Months of Free Rent

Jun 22, 2009 – CRE News

Weakening fundamentals for the downtown Phoenix office market have forced landlords to offer up to 15 months of free rent to tenants that sign 10-year leases. The market’s 13 percent vacancy rate for class-A space has nearly doubled in the last few years and will increase further as a result of two projects that are nearing their completion – One Central Park East and CityScape.

I was doing some research on the US Department of Housing and Urban Development (HUD) website and I came across a pretty cool calculator that figures how much house you can afford with an FHA loan. It’s pretty cool how it breaks everything down. Use the detailed explanation for more info. This could be particularly helpful for first time home buyers.

http://www.ginniemae.gov/2_prequal/intro_questions.asp?Section=YPTH

Thank God we don’t have anything in Burlington, Vermont that looks like that!

It’s a beautiful location even when it’s frozen, and the price is great for a lot with lake frontage in Burlington.  Still, I don’t think it was shown once this winter.!!

The Setting sun on the frozen landscape makes me think of what is on its way in the very near future.

The lake is back to liquid (in most places) and the sun hangs high in the sky well past the drive home.  The sun is indeed setting on this frozen, barren real estate market and before we know it, both this property and the rest of the Burlington, VT market will emerge from the mud and will once again be warm, green and buzzing with activity. Are You Ready?

The thing that gets my attention right away with the 307 ranking. That’s out of 500. This means there are 306 metropolitan areas in this country that are better than Burlington Vermont and only 193 that are worse off.  I can only imagine whose on that list.  Don’t get me wrong, I’m not one of these people who thinks The Queen City is the greatest place on earth and you’d be crazy to live anywhere else. I just find it hard to believe that there are 306 better places to live!  Allow me direct your attention to some recent accolades the City of Burlington had racked up. This list doesn’t include the most recent Healthiest City in America ranking in Nov. 2008 by the Centers for Disease Control and Prevention.

Yes, the winters are brutal but the summers are beautiful.  Housing costs are high, but generally you get a lot of house for your money.

People look at these rankings before they move places. I know several people who quote these type of things all the time and they believe what they read even if they haven’t actually been there.  Burlington deserves a better ranking! I have been to a lot of cities that are about the same size as Burlington and have a College or University and none of them are as vibrant, and metropolitan feeling as the city by the lake. Burlington has a downtown grocery store (City Market), Pharmacy (Rite Aid), department store (Macy’s), and a full fledged Mall with a Starbucks, just to name a few things.  “Big deal,” you might be thinking. Very few cities of 40,000 residents can make this claim!

Lets take a look at a few that are about the size of Burlington. Concord, the capital of New Hampshire has a population of around 42,000 and has no downtown dept store or Starbucks. There is a small health food store (Concord Cooperative Market) downtown and a Market Basket at the bottom of the hill on the edge of downtown. I personally wouldn’t count this as a downtown grocery store, but I’m sure people would argue that one. There is a pharmacy right downtown (CVS). To be clear, when I say pharmacy I mean a large national type store with a lot of stuff in addition to a place to fill your prescriptions.  To be fair, I don’t know where Concord ranks in the book. It could be below Burlington. I welcome any comments on this topic especially from people who have this book. I just realized that Burlington also has a Movie theater and a performing arts space (several of them).

Flagstaff, Arizona has about 60,000 and I don’t even want to make the comparison because I don’t want to embarrass anyone from Flag. I love the place but it’s no Burlington.

Same goes for Prescott, AZ

I could go on and on but I think you get the point… Burlington Rocks!

I appreciate any comments on this topic.