Clarity and Collaboration in Q3 2022
Q3 2022, brought more clarity as to the direction our market will head as we finish out 2022 and head into 2023. Q3 brought an overall move back to a more traditional real estate market with less frenzied activity and a more measured approach from buyers and sellers. While this means a shift away from a dominant seller’s market, it also allows for opportunities for both buyers and sellers to transact in a more collaborative way.
The trend we were monitoring in the second quarter of 2022 carried into Q3. There was an overall decrease in sales volume, however, it was not as significant as we saw in Q2. A similar trend was seen across the board, with a fewer number of new listings, and lower average listing and selling prices. There were increases in median selling prices and average days on market. Even with the overall trends providing more market clarity, one interesting data point was that the average final selling price was 97% of the last listed price, slightly below Q3 2021, which was 100%. While there was a slight decrease in this percentage it is still a sign of a strong market.
Interest rates, having moved from a low 3% to almost 7% since the start of Q2, have had a more significant impact on the overall market than almost any other factor outside of the economy as a whole. This continues to be a factor that all of us monitor. While these rates seem much higher than many buyers have ever experienced, they are still historically low. We are finding that buyers who are well qualified are still willing to move forward as the market is presenting them with opportunities they haven’t seen in 2 to 3 years.
Across the region, excluding Waterbury, there was a decrease in inventory. In Stowe, there was a 14% decline in new listings, and in Lamoille North, there was a 22% decrease in new listings compared to last year. Waterbury saw an increase in inventory, by 23%.
We are transitioning to a more balanced market, returning to less of a fevered environment, one where both buyers and sellers can work together to reach the common goal of a successful transaction. As we make this transition it is important to have the right real estate professional on your team to assist in navigating these collaborations to a successful outcome.
Stowe saw a decrease in overall sales volume compared to Q3 2021, with a 21% decrease in Q3 2022. This decrease was also reflected in the number of new listings slipping by 14%, with a total of 30 new homes coming on the market. The median and average selling prices moved in different directions during Q3. The average sales price dipped by 34%, this was driven by higher interest rates, buyers facing less competition, and an overall transition away from a seller’s market. The median sales price rose by just over 10%, which can be attributed to the gains seen in overall property values since 2020. The average selling price for Q3 was $1.342M, down from $2.068M in 2021. The median selling price was $990K, up from $890K in 2021.
The luxury market in Stowe remained strong in the third quarter of 2021, there were 10 sales above $1M, with the highest selling price of $3.25 million. Q3 2022 had 5 sales above $2M, which helped to drive the average and median sales prices higher than a year ago. The average sales price for the luxury segment of the market was $1.965M in Q3 of 2022, compared to $1.662M a year ago. The median sales price was $1.612M in 2022 compared to $1.298M a year ago. These increases reflect the overall strength of the luxury market as well as the renewed interest in the Stowe area from high-net-worth buyers.
Currently, there are 33 homes on the market in Stowe ranging from $425K to $17.5M. The majority of these homes are priced above $1M, 23, in total. There are 7 homes priced between $2M and $4M, 5 between $4M and $10M, and 3 homes priced between $14.9M and $17M.
The condo market saw a 28% decrease in both the number of sales and the number of new listings compared to Q3 of 2021. There was a dramatic decrease in average days on market by 53%, confirming buyers’ desires to have a place in Stowe without the responsibility of a single-family home. The average days on market in Q3 2022 was 25 compared to 60 a year ago. The average sale prices declined slightly by 7%, to $714K. The median sales price rose by almost 2% to $562K compared to a year ago. Properties like Topnotch, Landmark Meadow, and Butternut Lane all saw continued strong sales at or above $1.5M, setting a new level of equity for these properties.
Land saw a drop in parcels sold year over year with just 2 trading in Q3 2022, compared to 6 tradings the year prior. Since there were only two parcels sold in Q3, it’s too small of a sample size to rely upon in terms of the overall movement of the average and median pricing. What is evidenced is that the choices of higher quality lots with sizable acreage, views, and ease of building are becoming hard to find within the Stowe market. It’s likely this trend will continue as building in the area has reached a higher level than seen before 2020.
For the second quarter in a row, our office is proud to report that we represented the sale of the highest-priced commercial property sold in Q3 2022 with the sale of the Golden Eagle Resort. We represented the buyers in this transaction, which sold for $13M; a property that has over 80 hotel keys, developable land, and sits on 31 acres.
In Lamoille County, an area comprising 9 towns, in addition to Stowe, there was a decrease in overall sales by 10%, which was reflected in the market as a whole. The average price decrease was similar to Stowe, decreasing by 30%, compared to Q3 2021. The median sales price grew by 11%, again showing the gains these markets have seen in overall value in the past two years. There was a market wide reduction in homes available by 22% compared to a year ago, with a slight increase of days on market by 12%. While there was a decline in the numbers as a whole we found that the attractiveness of Lamoille County, offering Vermonters access to high-quality jobs, healthcare services, and lifestyle activities continues to drive home sales in this area.
Land sales mimicked the home sales in that there were declines in overall parcels sold, 23, compared to 40 a year ago. The average price increased from $115K to $141K, this is mostly due to the fact that many lower-valued parcels traded out of the market last year. The median sales price barely increased, again showing that more highly valued properties are trading in Q3 2022. The average days on the market was 85 and the median was 21, compared to 145 and 48 in 2021. As land becomes harder to find in Stowe and for those who want more space and privacy, land north of Stowe remains a very attractive option.
Waterbury was the only local market to see gains in terms of the number of sales, with an increase of 5%. Although modest it still reflects the desirability of this location. The market continued to excel in terms of the sales price compared to listing price, which was up by almost 1.5%. The average and median sales prices increased by 15% and 19%, respectively. The average sales price went from $518K to $598K and the median sales price went from $440K to $525K. There was a large drop in average and median days on market, 45% and 33% respectively. There are 8 active listings available, ranging from $295K to $850K, this is an increase of 23% compared to a year ago.
One land parcel sold in Q3 2022 compared to 3 during the same period last year. There are currently only 3 parcels on the market priced between $175K and $450K.
Given Waterbury’s overall size and lack of inventory, we expect the sales there to continue to flow quickly through the market as they come on. Interest rates might have a slowing effect, but with so few options to choose from that may take past Q4 2022 and into 2023 to come to fruition.
In transitional markets, making sure you have a trusted advisor to help you determine the right pricing strategy is of the utmost importance. Our agents are equipped to provide their clients with up-to-the-minute market data, helping clients make informed decisions in an effort to achieve the best outcome. Having access to agents with market knowledge, and expertise, along with leading technologies gives you access to the support and advice that is critical for Sellers and Buyers when navigating a changing market. As always we’re here to help, don’t hesitate to contact us.