Here is an interesting report on housing appreciation in Vermont. It compares Vermont with national trends. This article is published with permission from the Vermont Property Owners Report.

-
Nancy

In Weakening Market,
Vermont Appreciation Still Above Average

Published by:
Vermont Property Owners Report
September 6, 2006

The Sept. 5 edition of the federal Housing Price Index reports that during the second quarter, existing homes in Vermont appreciated at a quarterly rate of 2.45% (or an annualized rate of 9.8%), well above the national quarterly appreciation rate of 1.17% (or an annualized rate of 4.68%). Quarterly appreciation in the
Burlington area (1.94% for the quarter, or 7.76% on an annualized basis) was lower than in the state as a whole.

 

Vermont was the only New England state to exceed the national average appreciation rate, according to the federal report. Maine and Massachusetts actually experienced negative appreciation during the second quarter. Whether below-average appreciation rates eventually turn up in Vermont as well remains to be seen.

 

Compared to a year earlier, the index showed that house prices had appreciated 10% on a national basis (11.28% in Vermont). A federal spokesman said the data showed that the housing market is cooling in a very significant way in almost every region of the country, but more strongly in areas that have recently seen very high appreciation rates.

 

The 10% national appreciation rate over the past year is based on mortgages for both actual sales and refinancing. When refinancings are dropped from the calculation and appreciation is based on just actual purchases ­ which we think may be more reflective of the market ­ the national appreciation rate over the past year drops to 8.27%.

 

Other recent data have also described a slowing real estate market in the U.S. These reports include:

 

  • The number of existing U.S. home sales in July was 4.1% lower than in June and 11.2% lower than a year ago, according to the National Association of Realtors (NAR). The median price of an existing home sold in the Northeast in July was 2.1% lower than a year earlier, the NAR said.
     
  • The NAR¹s Pending Home Sales index for July, based on the number of contracts signed in that month and thus a leading indicator for actual sales volume in later months, was down 7.0% from June, and was 16% lower than July 2005.
     
  • The pace of new single-family homes sales in July dipped 4.3% from June, and was down 21.6% from July 2005, according to the U.S. Commerce Department. On a year-to-date basis, actual new home sales were down 14.2% compared with the first seven months of 2005.
     
  • In Massachusetts, the number of single-family home sales in July was off 25.3% compared to a year earlier, while median house prices declined 3.5% over the year, according to the Massachusetts Association of Realtors. The volume of existing home sales in Massachusetts has decreased for nine of the last ten months.
     
  • Nationally, the inventory of properties for sale has risen from 2.7 million to 3.8 million over the past year, a 39.9% increase, according to the NAR.
     
  • Mortgage applications for home purchases fell in late August to their lowest level since 2003, according to the Mortgage Bankers Association. 

It's hard to find any bright spots for property owners in the current real estate picture, but we did find two: 1) mortgage interest rates have been dropping this summer, which might bring buyers off the sidelines and 2) the number of people using the Internet search term “homes for sale” has increased 42% over the past five weeks, according to CNBC, and in the past the trend of such queries has reportedly been a good predictor of sales of existing homes in the next month or two.

 

All rights reserved. Copyright 2006 by Vermont Property Publishing, Inc.

 

Vermont Property Owners Report

P.O. Box 1564

Montpelier, VT 05601

Phone: (802) 229-2433

Fax: (802) 229-0194

E-mail: phildodd@vermontproperty.com

Web: http://www.vermontproperty.com/

 

Vermont Property Owners Report is a 28-page bimonthly printed newsletter about Vermont and Vermont real estate.  We cover the real estate market, tax and legal issues, state news and practical advice for Vermont property owners and buyers. Subscription price is $49 per year, plus 6% sales tax if being sent to a Vermont address. To subscribe, or for more information, please call (802) 229-2433 or visit www.vermontproperty.com.