The housing market continues to be dynamic. While inventory levels remained low, the remote work trend had enabled greater mobility in the marketplace as buyers were able to relocate from more populous urban areas. Our market in Vermont has observed an increase in out-of-state buyers, which jumped 38% in 2020. Today, the buyer demand remains, which has had an effect on the economic balance of supply and demand. As a result, home values in Vermont and across the nation have risen at an unprecedented rate, and bidding wars became commonplace among buyers. 

As the proverbial dust settles from the Pandemic, and we adapt to the conditions of today’s housing market, many seem to be posing the question - what lies ahead for 2023? 

Home values are at a record high; the result of a highly constricted marketplace due to steady buyer demand (regardless of rate environment), and ongoing inventory crunch, which creates a strong foundational support for these elevated prices. We have already seen the rate of value increases start to level out, and even some softening in rural markets. This observation is aligned with the prediction by many economists who say the market is more likely to correct itself from the double-digit percentage jumps in home prices we’ve seen over the past few years. A far cry from a ”crash” and appreciation growth is projected to continue to be positive.

Nonetheless, experts say whether home prices rise or fall in the coming months will likely remain region-specific. The only regions expected to experience declines would be in areas that were on the higher end of the pandemic price booms, such as Austin, Texas; Phoenix; and West Coast metro areas, and where development at scale has been able to take place. According to the FHFA, Vermont experienced an average degree of appreciation compared to other national markets, with a 55.2% appreciation statewide in the last 5 years. If you’ve been in your Vermont home for over one year, chances are you have more equity than you realize. 

It’s worth noting that today’s homeowners stand on far more secure footing than those coming out of the 2008 crisis. Homeowner equity is currently at the highest level it’s been in the past several decades. Between current mortgage securities and with many borrowers having positive equity in their homes, the result is a very low risk of a market crash. If buyers are sidelining themselves in wait for a crash - they will be disappointed. We recommend connecting with an agent or meeting with a local lender to discuss the various buying programs available. Buyers that are adaptable and resourceful will have the upper hand this summer.