Vermont Housing Market: Trends and Forecast 2025-2026

Thinking about buying or selling a home in Vermont? While the market has cooled slightly compared to the past couple of years, the market still remains relatively competitive. The rise in inventory is a notable shift that provides more choices for buyers and allows for more realistic pricing, leading to a more balanced market.

The Green Mountain State's real estate landscape is unique, shaped by factors like its stunning scenery, thriving communities, and a relatively limited housing supply. Let's delve into the current market conditions to give you a clearer picture.

Vermont Housing Market Trends in 2024

Home Sales in Vermont

The number of homes sold in Vermont provides a valuable snapshot of market activity. According to Redfin's September 2024 data, 640 homes were sold, reflecting a 9.09% decrease compared to the same period last year. This decline suggests a cooling market, potentially due to several factors, which we'll explore further below.

While this decrease might initially seem alarming, it's important to remember that the market fluctuates, and a year-over-year drop doesn't automatically signal a collapse. In my opinion, this slowdown is a natural correction after several years of rapid growth, and more likely a sign of a market heading towards a more balanced state.

Home Prices in the Vermont Housing Market

Despite the decrease in sales, home prices in Vermont remained relatively stable. The median sale price in September 2024 was $406,100, showing a modest 3.0% year-over-year increase. This slight increase is intriguing. It indicates that despite fewer homes selling, prices held their value, suggesting continued demand, albeit a tempered one. This situation might be attributed to the limited inventory, which we'll discuss further in the next section. As a Vermont real estate professional, I've observed that the desirability of Vermont’s unique lifestyle continues to support home values.

Housing Supply: A Look at Vermont's Inventory

One of the most significant factors impacting the Vermont housing market is the availability of homes for sale. In September 2024, 3,537 homes were listed for sale, representing a substantial 32.8% year-over-year increase. This jump in supply is a significant shift from the previous seller's market.

The increased inventory likely contributed to the drop in sales volume. However, a 4-month supply, still represents a relatively tight market. In my experience, anything less than six months of supply is generally considered a seller's market and this suggests that while there's more choice for buyers than in recent years, there's still healthy competition.

Key aspects to note about the housing supply include:

• A significant increase in the number of homes for sale (32.8% year-over-year increase)
• A rise in newly listed homes (15.5% year-over-year increase)
• A moderate increase in months of supply (+2 years over year), moving the market towards a more balanced position, however still somewhat favoring sellers

Market Trends in Vermont's Housing Market

The Vermont housing market presents a mixed picture. While fewer homes sold in September 2024, prices remained relatively strong, showing moderate growth. The substantial increase in available properties is a notable development. A few key trends emerge from the data:

• Shifting from a Seller's to a More Balanced Market: The increased supply is signaling a shift away from the extremely competitive seller's market seen in previous years. Buyers now have more choices and less pressure to make quick, over-priced offers.
• Price Stability Despite Lower Sales: The continued price growth despite fewer sales indicates underlying demand that supports prices, which to me suggests a healthy market adjustment rather than a market collapse.
• Competition Still Exists: While the market is becoming less intense, it's far from a buyer's market. The 4-month supply and data on homes selling above list price suggests continued competition, especially in desirable areas.

Demand and Competition: How Competitive Is The Vermont Housing Market?

Looking at the percentage of homes sold above the asking price and those with price reductions can help to gauge market competitiveness. In September 2024, 30.2% of homes in Vermont sold above their listed price. This figure is down 10.8 percentage points compared to last year, indicating reduced competition. However, it still means a significant number of homes are attracting multiple bids. This suggests that despite the increase in available homes, high demand persists in specific markets and segments.

Meanwhile, 22% of homes experienced price drops, up 3.3 percentage points year-over-year. The increase in price drops points further towards a more balanced market, providing opportunities for buyers to negotiate better deals.

A Closer Look at Specific Vermont Locations:

While statewide data provides an overview, the Vermont housing market varies significantly from one region to another. Areas like South Burlington and other towns bordering Burlington, might see continued strong performance due to proximity to employment centers, education, and amenities. Conversely, more rural areas of Vermont may experience more pronounced fluctuations based on seasonality and specific local economic conditions. To gain a deeper understanding, it's important to look at specific town-level data.

Vermont Housing Market Forecast 2024-2025

Predicting future market trends with certainty is impossible; however, considering current factors, it's likely that the Vermont housing market will continue to evolve towards a more balanced state in the coming year. The increase in inventory is easing intense competition, offering buyers more options, and potentially tempering price escalation. However, Vermont's limited land and high demand relative to supply might still create pockets of high competition for desirable properties.

 

According to Zillow, as of late 2024, the average Vermont home value sits at $395,523. This represents a 1.7% increase over the past year. Homes in Vermont are currently pending after an average of about 15 days on the market. This relatively quick sales pace, combined with the modest price increase, paints a picture of a market that isn't exploding, but isn't stagnant either. It's a nuanced picture, and we need to dig deeper to understand the future.

One crucial thing to keep in mind is that Zillow’s data relies on its Zestimate algorithm. While helpful as a broad overview, it's not a perfect predictor of individual home prices. Local market nuances, specific property conditions, and even the time of year can heavily influence the actual selling price.

Regional Breakdown: A Deeper Dive into Vermont's Housing Market

Vermont's housing market isn't uniform. Different regions experience different pressures. To truly grasp the Vermont housing market forecast, we need to look at key metropolitan statistical areas (MSAs). Let's examine projected changes.

Region	Projected Growth (October 2024)	Projected Growth (December 2024)	Projected Growth (September 2025)
Burlington, VT	0.1%	-0.2%	0.8%
Rutland, VT	-0.3%	-1.3%	-0.1%
Barre, VT	-0.2%	-1.0%	0.0%
Bennington, VT	-0.4%	-1.0%	0.5%

This data suggests a somewhat varied picture. Burlington, the state's largest city, shows modest growth, despite a small dip projected for the end of 2024. Rutland, Barre, and Bennington all project some price declines, though they're not catastrophic and show potential for recovery by the end of 2025.

Factors Influencing the Vermont Housing Market Forecast

Several factors contribute to the current state and future predictions of the Vermont housing market. These include:

• Tourism and Second Home Ownership: Vermont's stunning natural beauty and outdoor recreation opportunities attract many tourists and second-home owners. This can drive demand, especially in popular resort areas, counteracting potential declines elsewhere.
• Limited Inventory: Vermont, like many areas, faces challenges with housing inventory. A shortage of available homes for sale can push prices upward and create competition among buyers.
• Seasonality: The Vermont housing market shows some seasonality, with increased activity during the warmer months. This is typical of vacation and second-home markets.
• Economic Conditions: The overall economic climate in Vermont, national interest rates, and employment rates all significantly impact the housing market's performance. A strong economy generally translates to more robust home sales and higher prices.
• Infrastructure and Development: Investment in infrastructure and new housing developments can influence supply and potentially alleviate housing shortages. The pace of such investment influences the market in different areas.

Will Home Prices Drop in Vermont? Will There Be a Crash?

The question on everyone's mind: will the Vermont housing market crash? Based on the limited data available and my experience covering the Northeast real estate market, a complete crash seems unlikely. The projected declines in some regions are relatively modest and don't indicate a widespread collapse. Remember that the housing market is cyclical. Periods of slower growth or even slight price drops are normal parts of this cycle. However, the severity and duration of any potential downturn are impossible to precisely predict.

A Look Ahead: Vermont Housing Market Forecast for 2026 and Beyond

Predicting the market beyond 2025 requires more speculation and caution. However, based on current trends, a few possibilities exist:

• Gradual Growth: A gradual and steady increase in home values seems most probable. This would likely be characterized by regional variations, with some areas growing faster than others.
• Stabilization: The market could also stabilize, with prices remaining relatively flat. This scenario is possible if inventory levels rise and demand remains consistent.
• Continued Moderate Growth in Specific Areas: Regions attracting new residents or major investments would most likely continue to see moderate growth despite overall market trends.

Any forecast beyond 2025 hinges significantly on national and local economic factors. Unforeseen circumstances, such as changes in interest rates or significant shifts in the economy, could significantly affect the outcome.

Conclusion:

The Vermont housing market presents a unique set of opportunities and challenges. While the data suggests modest growth or stability in some areas, it’s crucial to remember that localized factors, such as the availability of homes for sale, significantly impact individual markets. It’s a good idea to thoroughly investigate the area you are interested in before making any major decisions.