Vermont Buzz

2006 3rd Highest Sales Year!

WASHINGTON, January 25, 2007 -  Report from NAR

Existing-home sales eased but prices stabilized as inventories tightened in December, while 2006 was the third-highest sales year on record, according to the National Association of Realtors®.

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – eased 0.8 percent to a seasonally adjusted annual rate1 of 6.22 million units in December from a level of 6.27 million in November.  Sales were 7.9 percent lower than a 6.75 million-unit pace in December 2005.

There were 6,480,000 existing-home sales in all of 2006, down 8.4 percent from a record 7,075,000 in 2005.  The second highest total was 6,779,000 in 2004; NAR began tracking home sales in 1968.

- National Association of Realtors

What is Inclusionary Zoning?

Inclusionary zoning is a land-use concept in which local ordinances require builders to include a certain amount of housing for low- and moderate-income households. In contrast, exclusionary zoning is a technique that effectively drives up the cost of housing, excluding lower-income households from the community. Exclusionary zoning practices have been under attack in communities around the country for decades, most notably in New Jersey, where the historic MountLaureldecisions have led the way in promoting inclusionary zoning techniques and creating affordable housing.

A book, “Field Guide to Inclusionary Zoning” by Frederik Heller includes background information on inclusionary zoning, case studies on what works & what doesn't, considerations in developing inclusionary zoning ordinances, and information on the Mount Laurel doctrine.

- from the National Association of Realtors

Home Improvement Spending

According to the Joint Centerfor Housing Studies at Harvard, Americans spent $168.7 billion on home improvements and repairs in 2006, 1.5 percent more than in 2005.

At the same time the Joint Center came out with its data, the National Association of Homebuilders' survey of remodelers found that kitchen and bathrooms remain the top remodeling jobs, and master bedroom suites and great rooms are the two most popular home additions. The remodelers were surveyed during the first three quarters of last year.

The bulk of the demand for remodeling jobs continued to come from the baby boom generation, according to the NAHB research, which was conducted in conjunction with the quarterly surveying used to produce the NAHB's Remodeling Market Index. However, work requests from 30- to 40-year-old members of Generation X are on the rise, and they are turning out to be bigger spenders than the generation preceding them, the NAHB data show.

Rising energy prices last year appeared to have little impact on the demand for jobs related to improving residential energy efficiency, and a majority of remodelers were involved in making modifications for aging-in-place, although they said that most consumers aren't familiar with the concept. My feeling is that the NAHB should hold a contest to come up with a better description than aging in place, which better describes how I feel when a late train makes me miss the start of an important meeting.

In the first quarter of last year, when remodelers were asked about their most common jobs during 2005, 75 percent reported being hired to remodel kitchens, 67 percent remodeled bathrooms, 57 percent added rooms, 44 percent provided whole house remodeling and 40 percent replaced doors and windows.

This article was taken from the Realty Times - January 25, 2007. "Home Improvement Spending Up Marginally" by Al Heavens

50-Year Mortgages?

First there were five-year loans. Next, the Federal Housing Administration was created in 1934 to pioneer the 30-year mortgage. Then last year, several lenders reprised the concept of a mortgage with a 40-year term, and old idea whose time might have finally come.  And now, a Toronto mortgage firm has come up with what it calls North America’s first 50-year amortization program. The loan is aimed at non-prime, high-ratio borrowers who could choose a 50-year term in five-year increments, according to Boyd  Sousanna, president and chide executive officer of the Reliant Home Warranty  Corp.  No word on whether the loan is or will be available in the United States.      Realty Times – April 2006

Housing Affordability Index Hits Lowest Point in 15 Years

The National Association of Realtors reported that the Housing Affordability index has fallen to its lowest level since 1991.   What this means for the average consumer (household) is that the combination of interest rate hikes, real estate appreciation, and other costs have put buying a new home out of reach for some and made it less feasible for others.  At the least expensive end of the housing market, it puts some first time buyers out of contention for a purchase.  This has somewhat of a domino effect in terms of making it more difficult for those who plan to move up to the next level in housing.
In Vermont, the average sale price for a residence reached $219,700 for the month of October.  In October of 2004, the average sale was $183,300.   For the year 2002, the average sales price was
$153,800; in 2003, $166,700, and in 2004,$186,200.  Though appreciation has been high over the past few years, Vermonters should not expect this trend to continue.  Though I don't believe Vermont will experience a housing bubble" effect, appreciation rates should decline (and have in the most recent quarter).    Stay tuned...

New York Market, St. Joseph to the Rescue

New York Brokers are beginning to see longer market times.  They are even using St. Joseph's statue, long a staple of challenging Vermont markets and often ordered by the dozens.
If you are desparate to sell your home, even St. Joseph will help. 
You might try lowering your expectation for a high price first!
New York Times article