‘It’s pretty much insanity’: Pandemic-weary out-of-staters make Upper Valley housing market a feeding frenzy

Valley News Business Writer
Published: 5/1/2021 9:42:27 PM
Modified: 5/1/2021 10:01:38 PM

WEST LEBANON — How crazy has the real estate market become in the Upper Valley? Ask Amanda Addington.

Addington and her partner, both 32, share a one-bedroom apartment in Hartland with their cat, Gary, and since September have been actively looking to buy their first home. They want to settle in the area with a bigger place.

The professional couple — she works in the development office at Dartmouth College, he is a social worker in Vermont — have visited 23 houses and condos, from Canaan to Quechee and Enfield to Thetford. They’ve made eight offers, not one less than asking price.

And every time they have been outbid by another buyer.

“We knew it would be difficult, but we didn’t expect this at all,” said Addington, who moved to the Upper Valley three years ago. “We thought with the number of offers we’ve made one of them would work out.”

Addington’s experience illustrates what many people are facing after a year of pandemic-fleeing city slickers and suburbanites flowing into more rural communities and driving up home prices. As buyers from out of state, many of whom can offer cash and dispense with contingencies, flood into the Upper Valley, less affluent buyers rooted in the community are crowded out of contention.

On top of that, the number of houses on the market this spring has dropped significantly because of the strong demand.

“There are a lot of cash buyers right now. A lot of people are getting left out of the market,” said Nan Carroll, a Hanover broker with Coldwell Banker who has been selling homes in the Upper Valley since 2003 and who estimates that of her sales over the past year “90% are from out of the area.”

Recent analysis of real estate transactions supports Carroll’s observation.

The Vermont Center for Geographic Information, using property-transfer tax addresses collected by the Vermont Department of Taxes, found that property sales in Vermont to out-of-state buyers increased 38% in 2020 over the prior year. Among individual Vermont towns in the Upper Valley, the surge to out-of-state buyers is even greater: up 97% in Woodstock (36 sales to 71 sales), 29% in Hartford (106 sales to 137 sales) and 113% in Norwich (8 sales to 17 sales).

Those findings sync with an analysis of address changes published last month in The New York Times, which, relying on U.S. Postal Service data, shows that the Lebanon area had one of the biggest influxes of population in the country, ranking 7 out of 926 metro areas measured with a 3.7% positive net shift in in-migration from 2019 to 2020.

Meanwhile, The Wall Street Journal published a list in conjunction with Realtor.com of the most-sought places in the country for home buyers seeking appreciating values with “appealing lifestyle amenities” and ranked Lebanon-Claremont 183 out of 300 metro markets (Concord, N.H., was No. 8, Manchester-Nashua, N.H., was No. 9, and Burlington, Vt., was No. 92).

That sounds about right to Paul Rea, a Randolph real estate broker who specializes in Orange County.

“It’s a lot of folks from Massachusetts, New York, New Jersey, all around the country, who are looking for the safety and security that Vermont offers,” Rea said of the buyers he’s seen over the past 17 months.

Rea, who normally sells 35 to 40 houses a year totaling around $6 million in sales, said he sold 64 properties totaling $10 million in sales in 2020, exceeding his prior 2018 record of 42 properties totaling $7.5 million in sales.

But the result of record-breaking real estate sales means that the number of homes available for sale has depleted, in some Upper Valley towns to near-zero levels, a nadir real estate agents say they never recall seeing.

“Usually this time of year, in February and March I’ll have 25 to 30 listings and up to 40 and 50 in April and May,” Rea said last week. “Today I have two: a duplex and a one-bedroom mobile home I just listed this morning and that will probably go in a couple days.”

The roaring market in 2020 Upper Valley home sales driven by the pandemic continued to surge through the first quarter of the year, according to data collected by the real estate trade groups in both New Hampshire and Vermont.

Closed sales of single-family homes in Grafton County jumped 21.1% to 230 between January and March while the median sales price increased 29.1% to $270,950, says New Hampshire Realtors. Closed sales in Sullivan County ticked up 0.9% to 118, but sales volume increased 36.2% to $36.9 million and the median sales price rose 23.4% to $215,900.

All those home sales mean more tax revenue to the state and county, said Grafton County Register of Deeds Kelley Monahan. She said her office accepted 17,541 documents — records pertaining to deeds, mortgages, and liens — in fiscal year 2020, an increase of 2,473 from 2019, processing $12.4 million in taxes and fees distributed to the state’s tax coffers, Land and Community Heritage Investment Program and Grafton County.

Based on the real estate activity over the past nine months, Monahan estimates her office is on track to record 22,000 documents and collect “more like $15 million to $16 million” in revenue for the fiscal year ending June 30. Parties typically file at the beginning or end of the workweek.

“Fridays and Mondays are always insane,” she said.

Home sales have been galloping apace in Windsor County in Vermont as well, with data showing just how few properties remain available on the market this spring, typically the busiest time for home sales, according to the Vermont Association of Realtors.

In Windsor County, a total of 183 home sales closed during the first quarter, up 36.6% from the same period a year ago, while new pending sales — sales contracted but not yet closed — jumped 18% to 256. Closed sales volume skyrocketed 87.6% to $69.6 million and new pending sales volume soared 62.6% to $113.2 million.

The median sales price in Windsor County rose 35% to $277,754 and the average sales price rose 37.3% to $380,305 during the first quarter, the VAR said.

At the same time home sales have shot up, the number of homes for sale has plunged.

In March, there were only 125 homes actively listed for sale in Windsor County compared with 448 in the same month of 2019. Active listings plummeted in White River Junction (from 36 to four), Norwich (23 to five), Woodstock (45 to 14) and Randolph (29 to 6), according to VAR.

The crunch is not only freezing out Upper Valley people who want to buy their first home but also presenting issues for homesellers who will need to find another place.

“The first question I ask my owner is: Do you have a place to go to because I don’t want to make you homeless,” said Vanessa Stone, an Enfield real estate broker who focuses on the Mascoma Valley.

Stone said that in the 32 years she’s been selling real estate the current frenzy surpasses even the hot home-selling market of the early 2000s before the crash of 2007.

She had an open house on April 24 for an 1,800-square-foot home on Kilton Pond in Grafton which was listed at $299,000. Over five hours, 62 parties signed the registration book (there were actually more than 62 people because most parties had multiple persons). Stone, who won’t say how many people bid or what the ultimate sales price was because the sale is pending) had to field three agents on site to handle the throng.

They added a second open house on Sunday, when 13 more parties showed up.

“Seventy-five parties in two days,” she said. “I never had anything like that happen. There were local people but also people from Massachusetts, New York, Connecticut, you name it. It’s pretty much insanity.”

Conrtact John Lippman at jlippman@vnews.com.

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