The state of Vermont has recently updated their travel restrictions. Beginning today, Friday, April 9, visitors to Vermont no longer need to quarantine as long as they are fully vaccinated or have a negative COVID test within 3 days of entering the state.
Demand for luxury homes + low inventory + price appreciation = sellers’ market
By Karen D. Lorentz
A stunning trailside five-bedroom, five-bath, three-level contemporary house set on an almost one-acre lot has set a new record for single-family-home sale price in Killington at a $2.65 million. The previous record was $2.4 million, noted Kyle Kershner, broker/owner of Killington Pico Realty, who listed the home. Noting the property was a “perfect balance between luxury, ski-on/off convenience, and style,” Kershner said it garnered five cash offers within two days of the listing.
The responses were indicative of the increasing demand for quality luxury properties, he observed, explaining there used to be an expectation for properties listing at over $1 million that they’d take one or two years or more to sell. “In the last 15 years, Killington has averaged one $1-million-plus sale per year, but there were five in the last year, not counting pending sales,” Kershner said. “That’s a major shift,” he added, opining the Killington luxury market has attained “critical mass” and “a reputation for offering a community of high-end luxury homes.” The previous $2.4 million single-family-home record a few years ago was for a larger home, but it was on the market for 1,200 days, he noted.
He said that property sales in Killington and nearby towns have been increasing for several years now, and that the demand has created appreciation in prices for homes and condos, adding the market had picked up in 2018, gotten hot in 2019, and continued its upward trend in 2020 despite the hiatus caused by the Covid-19 pandemic, which paused nearly all sales for a few months. Kershner noted that it is not uncommon for properties to sell for more than the asking price, noting multiple offers and increasing bids have led him to put a deadline on bids so as to be fair to agents and buyers – by allowing enough time for agents to reach their respective clients for virtual or actual showings. One Killington property recently garnered 18 offers and a Pittsfield property had 11 offers. That means a lot of potential buyers are still looking, he said. Further illustrating the demand for Killington vacation homes, Kershner said the agent for the new record sale was from Manchester, Vermont, and made a full-price cash offer with no contingencies on behalf of their Pennsylvania client, who had not viewed the property in person nor owned a Vermont home before.
Factors driving demand
In 2020, sales of properties were humming along when Covid-19 hit in mid-March and real estate action “went to zero,” Kershner said. The first quarter of 2020 was strong except for the last two weeks of March; it was the second quarter that was most affected. While real estate agents were allowed to show properties again in May, it took awhile to get to a closing date. By the end of May, the exodus from the cities had begun. The results were “the third and fourth quarters were record breaking,” Kershner said, adding that the “Covid rebound” furthering many potential buyers’ interest in moving to Vermont, seeking a safe haven. However, most still plan to use their purchases as second homes and not primary residences, Kershner stated.
Kershner pointed to the “gig” economy of short-term rentals (AirBnB and VRBO) as a factor that created the upward trend in demand for vacation properties, noting a substantial number of buyers use their properties and then rent them out for short term rentals.
Noting that the prior busy vacation property market of 2003-2007 was driven in part by the national “flipping craze” (driven by TV shows like HGTV) of purchasing fixer uppers, making changes, and selling for a profit, Kershner said he thinks the recent uptick to a hot market in Killington was “driven by the short-term rentals trend.”
Another factor that drove the upward trend was the enhanced reputation of Killington Resort and town as a year-round vacation haven. Investments in both winter (new lifts, new trail flow, new lodges) and summer attractions and activities (adventure park, mountain biking, events), Killington’s hosting of the World Cup, the addition of a year-round season pass, the expansion of Killington Mountain School programs, and summer children’s camps run by the town, all contributed to the “hot” real estate market in the Killington area that began in 2019, Kershner noted.
In addition, there is broad range of buyer types from the active lifestyler to families to others like the couple from Florida who rented a condo in the summer and have now made an offer to purchase one. They aren’t skiers and will probably rent it out winters, Kershner said.
He also has seen buyers invest in multiple condos, which can be used for rentals and take advantage of the short-term market rentals trend. “A 2019 VACASA study named the Top 25 markets for buying a vacation rental and listed Killington as No. 2 in the nation,” he said. These factors have contributed to a steady real estate market year round, and the traditional slow times have become “a thing of the past,” Kershner concluded.
All short term rental properties in the Town of Killington, i.e. rental units offering rentals of less than 30 consecutive days, require registration with the Town of Killington effective January 1st, 2021. For complete information and a registration application, please click the link below:
The state defines a short-term rental (STR) as a residential property rented for less than 30 days at a time, and for more than 14 days in a given year. Killington has approximately 900 STRs as a result of its proximity to the Killington-Pico ski resort, and the variety of four-season events and activities in the region.
The term for all permits will run from Nov. 1 to Oct. 31. For this first year, owners have until Jan. 1, 2021 to get their properties registered.
RUTLAND, Vt. (WCAX) Spring and summer are usually busy for real estate agents. And we've learned most have been even busier than usual. Our Olivia Lyons explains why the coronavirus pandemic has a lot to do with the increase in sales.
Real estate agents I spoke with say the demand for houses is incredibly high across the state.
Reporter Olivia Lyons: How has the real estate business been lately? Joan Watson/Watson Realty & Associates Joan: It's like a house on fire!
Real estate agents all over Vermont say there aren't enough houses to keep up with the abnormally high demand. Interest rates are low for buyers and out of staters are fleeing pandemic hot zones for Vermont after realizing they can work remotely from anywhere.
"As soon as we reopened again for real estate, it just seemed as if the flood gates had opened and buyers were just at an all-time high," said Mark Montross of the Catamount Realty Group. Montross is working with multiple clients leaving larger cities to retire in Northern Vermont. He also sees many millennials opting to buy instead of rent.
Kyle Kershner of Killington Pico Realty typically sells secondary or vacation homes in the Killington and Pico area. "This is typically our busy time and now we have a whole new set of fundamentals that are adding to the demand we would normally see," Kershner said.
But it's not just homes in touristy areas. Real estate agents tell me people are buying primary and secondary homes all across the state.
"I listed a house in Mendon today and within three hours I had seven showings scheduled for it," Kershner said.
Many locals are realizing they need to upsize or downsize after being home for so long.
"As soon as a property comes on, I'm always quick to get in there to show them and we'll write an offer up and then next thing you know, there's four or five other offers on the table," Montross said.
Many buyers are paying over asking price and taking big chances. "People are buying houses without even seeing them. And not just locally, but long-distance," Watson said.
Kershner says those buying houses sight unseen aren't unemployed and while this brings money to the economy now, it can hurt future home sales. "I do think we're going to see a long run of high demand and probably considerable price appreciation, and that's going to have a sort of detrimental effect on affordable housing," he said. Kershner told me Vermont has had a negative outflow of people for years. But he predicts that gap will close and Vermont will see more people moving into the state, than out.
These last few weeks have been unlike anything we have experienced before. Taking good care of yourself and your loved ones has never been more important, and we sincerely wish you the very best of health and well-being in these difficult and challenging times.
Impact on Real Estate
What impact the coronavirus threat and economic downturn will have on real estate in Killington and the surrounding communities is unknown at this time. We can certainly expect a “pause” of some duration in both buyer and seller activity. Respecting social distancing protocols, many homeowners will restrict showings, buyers may not be able to travel to see properties, and home inspections, appraisals, title searches, bank closings and legal services may all be limited, if not completely unavailable.
Killington Pico Realty remains committed to serving our customers and clients. For the health and well-being of our customers, clients, staff and agents, we have closed our physical office until further notice, but our agents and staff are working remotely to provide the best service possible under the current conditions. Feel free to contact any of us with questions, comments or concerns. While you may not be able to view properties in person at this time, all Killington Pico Realty listings include professional photography and videography, and you can view our complete inventory online at:
As always, we appreciate your business and are grateful for your loyalty and support. We are confident that by working together, our economy and our communities will come through this challenge and be stronger than ever.