There was a story recently that Vermont's real estate had actually appreciated in price by 17% from the 3rd quarter of 2009 to the 3rd quarter of 2010. While the data supports this statement, it is important to analyze the data to figure out the cause of the jump.
The jump in prices was an increase in the median home price. The median home price of Vermont homes is the point at which half (50%) of the homes sell over that price and half (50%) sell for under the median price.
The reason that the median prices increased in the 3rd quarter of 2010 is that it was the first quarter since 2008 that a first time homebuyer tax credit was not available. The first time homebuyer tax credit provided a great incentive for first time purchasers to buy and they did in droves while the credit was available.
The result of the large number of the first time homebuyers in 2009 and the 1st and 2nd quarters of 2010 caused a drop in the median sales price. This occurred because first time homebuyers tend to purchase less expensive homes than people buying their 2nd or 3rd home.
While I would like to be more optimistic about the data, I think buyers and sellers need to be realistic about what the data actually is showing. If we can see the same growth for consecutive quarters then I think the data would be valid.
