Many buyers in Vermont found 2019 to be a frustrating year. The combination of low inventory and high demand meant buyers had a difficult time finding a new home. This was particularly true in Chittenden County and even more so for buyers looking for homes between $250,000 and $350,000.
The question is will conditions be more favorable for buyers in 2020?
We believe that conditions for buyers will improve in 2020 so long as the trends we are seeing continue.
The first encouraging trend is the amount of new housing being constructed, particularly in Chittenden County. While homeowners (and analysts) tend to isolate the rental market and sales market, ultimately all housing helps balance the supply and demand. If the creation of new housing units, whether they be apartments, condos, or single family homes, outpaces the influx of new residents into Chittenden County then the supply will grow faster than the demand. If the housing supply grows faster than demand, the prices, whether they be rents or sales prices should at the very least stabilize and possibly decline slightly.
The pace of construction for all combined housing types has been at a historic high rate for the past couple of years in Chittenden County. Apartment construction has been quadruple its historic annual average and new home construction has been robust as well.
Along with more units being built, buyers should also continue to see historically low interest rates in 2020. At the beginning of 2019 many forecasts were for interest rate increases. However, the Federal Reserve cut interest rates three times during the year and buyers are once again seeing historically low rates to start 2020.
Finally, we are seeing less frenzied activity in the market. While some houses still receive multiple offers, we are seeing buyers now being able to be a bit more selective. If this trend continues and the inventory continues to increase, buyers should find 2020 to be a better year than 2019.