Best values, rates as selection tightens, brokers say
By Karen D. Lorentz
The prices are good, interest rates are low, and the inventory selection is good but beginning to decrease, according to real estate brokers in the Killington area, who are very busy. Many credit a buyer’s market and good values for vacation properties with their summer success.
“Houses and condos are as affordable as they have ever been. There are unbelievable values, making now the time to buy,” stated Joe Rodolfy, a loan originator with HomeBridge Financial Services in Rutland.
“Prices have already bottomed,” he added, noting he’s just had his busiest spring and summer for condos in Killington.
Brokers Bret Williamson, Tricia Carter, Lenore Bianchi, Ted Crawford, and Kyle Kershner have all been “very busy” and report more people paying cash now. Lenore Bianchi, a broker with Ski Country Real Estate, said her three recent closings — a Woods unit, a house, and a condo —have all been cash sales. Due to the difficulty of obtaining mortgages on condos selling in the $50,000 to $80,000 range, Tricia Carter, of Ski Country Real Estate, recommends people looking to purchase lower priced properties consider getting a home equity loan if they can’t pay cash.
Roldolfy explained that difficulty noting that lenders can’t recoup expenses on small mortgages.
He said that rates on conventional mortgages on second homes and condos have “risk-based pricing” that utilizes such factors as: credit score (the biggest factor); type of purchase — house or condo; the size of the down payment; and the loan size. He said that rates will vary but generally run 3.5-4.5 percent on 30-year condo mortgages and 3.5-4 percent on homes. A perfect credit score and a loan over $200,000 will usually get the better rate, he noted.
Ted Crawford of Prestige Real Estate advises purchasers who aren’t paying cash to use a local lender, noting that it takes longer for out-of-state lenders to offer a mortgage. They aren’t familiar with local properties and can hold up a closing, he said, noting one lender wanted to know what a Terra Median was (it’s the indoor pool, exercise, spa complex at the Woods Resort).
It’s also a good idea to get “pre-qualified by a mortgage company familiar with area properties — use one of the mortgage companies suggested by your agent” for a timely closing, he stressed.
Carter adds that it takes longer to obtain a mortgage now, 6-8 weeks whereas it used to take 4-6 weeks. One tip she offers is to read the complete letter from a lender. “People often see the congratulations, you have been approved for a loan but if they read further they can find pages of conditions. If they miss them, that can lead to a predicament and hold up a closing,” she warned.
Buyers tend to be user-owners versus the investor-owners (those who rented out their units) seen in the 1980s before the 1986 Tax Reform Act that disallowed taking a loss on second home rentals. Smaller one and two-bedroom units were popular with investors, but families tend to want larger units as they use them now, Bianchi said.
Noting he’s the “busiest I’ve ever been,” Brent Williamson, a broker with Killington Valley Real Estate, credits savvy purchasers who recognize good values and low interest rates as well as being able to capitalize on renting out a property when not using it, including summers.
Coupled with the many improvements to the resort area and expansion of summer activities, he said it’s an attractive time for second-home buyers and particularly families with the many things do in the area from summer camps to biking. He has already noticed some summer rental success and said it is also possible for purchasers to both use and rent their properties in ski season. He even noted that there are still some deals where investor purchasers “can make money.” But he also agreed that it’s best to use a local lender because they know the properties and big banks don’t, explaining that some banks won’t finance a Mountain Green condo because it has a front desk like a hotel.
Recalling the 8.5-16 percent mortgage rates in the 1980s, Carter agrees that people are seeing more opportunity now. “Compared to the West, prices are very reasonable and people are finding a Killington vacation property is a good place to park their money and boost a portfolio,” she said.
“All the activities and new events at the resort and in town, especially the expansion of biking trails, is turning the town into an athletic, four-season resort. You can get here by train, plane, and car,” she added of the easy accessibility.
Inventory and pricing
“Inventory is tightening, especially for larger three bedroom condos. Prices remain good but will start to rise as inventory decreases,” Bianchi said. She cited two identical floor plan units with one selling in the $120,000s but the other listed at $150,000 and the owner refusing a lower offer. The buyer really wanted it and paid the price, she noted. Because short-term rentals are very good, some owners are unwilling to sell in the current low-priced market, she added.
There’s a limited supply of condos in Killington but a two-plus year supply of homes. Home prices range from $165,000-$2.99 million. Condo prices are starting to increase but there are still very good values, Crawford said. Prices for two-bedroom condos range from $70,000-$200,000 depending on location, amenities, and the homeowners association while 3- and 4-bedroom units range from $100,000-$715,000, he said. At Pico, slopeside condos range from under $50,000 for a one-bedroom/bath unit to $109,000 for two bedrooms/two baths.
“There are always more condo sales in Killington than home sales, mostly due to affordability and convenience factors. Demand for luxury condos and homes has been limited; the greatest demand seems to be in the sub-$300,000 price range for homes, while condos with low association fees are in greater demand than those with high carrying costs, even if amenities account for the higher dues,” notes Kyle Kershner, broker/owner of Killington Pico Realty.
“For three calendar years, we have seen a small, but consistent increase in sales volume for both single-family homes and condominiums in Killington, he added, citing statistics from his website that show sales increasing.
2015: 28 single-family homes, 70 full-ownership condos
2014: 23 single-family homes, 66 full-ownership condos
2013: 21 single-family homes, 61 full-ownership condos
“This year is on pace with last year and there are quite a few properties under contract, so I expect we will equal or surpass last year’s volume by the end of the year,” Kershner said, noting that year-to-date comparisons for all property sales show 88 in 2016, 95 in 2015, and 81 in 2014.
“Inventory for single-family homes is stable, with about 24 months of supply; condo inventory has come down from about 24 months to 12 months. These are all positive signs for the market, but have not yet translated into price appreciation, so it remains a buyer’s market and is an exceptional time to be a buyer with low property prices, adequate inventory, and mortgage rates remaining at historically low levels,” he concluded.
