By Shawn Cunningham
© 2020 Telegraph Publishing LLC

Talk with any area Realtor about the current property market and one word that comes up nearly every time is “crazy.”

Real estate sales in this part of Southern Vermont have heating up as the number of houses available – what Realtors call “inventory” – is in decline creating a seller’s market.

In the rush to find safe, less-crowded places during the Covid-19 pandemic, people from around the northeast and even farther afield are snapping up second and even primary homes at a mind-boggling rate — and sometimes sight unseen.

“It’s definitely picked up,” says Gary Coger of Four Seasons Sotheby’s International Realty. “Most of the buyers are coming from urban areas in New York, New Jersey, Connecticut and from Boston. They’ve found out they can work from home and have more space.” Coger said that out-of-state buyers account for 75 percent of his business now.

“Normally, Springfield doesn’t get a lot of out-of-state buyers,” says Lori Muse of Lorie Muse & Associates. “Usually it’s 75 percent local but lately it’s more like 50/50. It’s similar to the period after 9/11 when people wanted to get out of the city. They wanted to feel safe and secure.”

From the beginning of the pandemic, the problem for many of those people – and the real estate agents who work with them – was the state’s quarantine requirement for visitors, which made shopping for homes by touring them impossible. Realtors turned to video and FaceTime tours until May 29, when the Scott administration loosened the regulations to allow buyers with a signed sales contract to travel from their homes directly to the property being purchased for a tour before turning around and going directly home in the same day and not making “nonessential” stops.

And so, as the pandemic spread in April and May, the real estate market heated up and included some who were buying properties without ever having visited them.

“If you told me four months ago that people would buy and close on things they haven’t seen, I would not have believed you,” said TPW broker Betty McEnaney, “It’s crazy. There have been a lot of whole years that are not as busy as now.”

Every broker has at least one story of a house going on the market and immediately receiving multiple offers with some above the asking price. McEnaney tells  of a “delayed showing,” which means the home was listed but would not be shown until the residents moved out. On the first day of being shown there were seven appointments while several offers were made sight-unseen.

“A house that’s new to the market and priced right can get multiple bids and even sell without a single showing,” says Joe Karl of William Raveis Real Estate Vermont Properties. “We have a closing coming up where the buyer had seen the house from the outside and bought it based on a FaceTime tour.”

Karl said that the pandemic has “awakened” the market for homes in the $500,000 to $900,000 range and that some of these larger transactions are taking place at a distance.

Poor connectivity is a ‘deal breaker’

One factor that enters into the decision of where to buy is the availability and quality of high speed internet because whether they want to live here full time or not “…buyers want to be able to easily work from home,” says Steve Stettler of Four Seasons Sotheby’s.

“They’ve done the research and are looking at towns where the internet is good,” says Coger. “They are looking in towns that have VTel fiber optic and to a lesser extent Comcast. Not having that is a deal breaker.”

Coger added that “Chester has been doing pretty well,” since it is almost completely wired with VTel fiber optic.

McEnaney agreed, noting it’s especially important for those who want to live in the country. “Towns with fiber optic service are more appealing. Comcast is great, but it only goes so far and if you want a country home, it won’t make it to your house. Towns with no high speed internet in rural areas won’t see as many buyers.”

A wave of closings coming

While the selling has gone forward, some of the other work that goes with transferring property ownership has bogged down. For various periods of time, many town clerks offices were closed or did not allow visitors. That slowed the research needed to prepare title searches. Even as those offices have re-opened, there are often restrictions on the number of people who can work there and appointments are necessary.

Appraisals required by banks that are making the mortgages are also taking more time.

“Bank appraisals used to take 10 to 14 days. Now it can take four to six weeks,” says McEnaney. And because appraisers may not be able to find comparable sales on which to base an appraised value sometimes those values do not reach the amount being borrowed. If that happens the buyer must put up more money or the seller must reduce the price. If neither of these happens, the property could go back on the market to try again.

Londonderry Town Clerk Kelly Pajala says there haven’t been a lot of closings yet, but she believes they are coming based on the number of title searches being done. “That means stuff is pending,” says Pajala.

Chester attorney Bill Dakin, who ushers through many real estate closings, agrees, but with a cautionary note.

“Beginning next week or in two weeks there is extraordinary activity coming,” says Dakin. “We are busy and other attorneys are busy. There’s a lot of activity but until there’s an actual closing and the check clears, there isn’t a deal.”

Dakin says July and August will be busy with fewer closings in September. “But there may be more in the pipeline,” he adds..

“There used to be two cycles in real estate sales,” says Karl.”The first was from Christmas to late March – when Little League and the golf courses open up in Connecticut. The other was mid-July to the end of summer but the pandemic has changed everything. We haven’t ever seen inventory levels so low and we may not have much to sell later this summer.”

Strange stories of a strange market

Like any frenzied market, this has produced its share of odd stories.

“In the past, buyers have had connections to the area, but we’re hearing from people who have never even been here looking for property – it’s bizarre,” says Karl, who had a call from someone looking for a home in Maine, New Hampshire or Vermont, as if it were all the same.

Karl says he has also heard of people buying land without perc testing for a septic system or one that contained a buried oil tank. Dakin said that the buyers’ attorney should bring that up before a closing.

“There’s also a lot of daydream buyers,” said Karl, “people looking for land and talking about tiny houses with big gardens.”

Muse worries that the combination of people making decisions that might be rash and the uncertainty in the economy could lead to problems down the road.

“I’m just speculating on this, but I’m concerned that we are going to see a big increase in foreclosures and people just walking away.”