[68vette]

Unemployment is not the issue. The issue is there are plenty of low paying jobs. some are excluded, but the majority of jobs in Vermont and all its counties are jobs that don't pay well. From the American Community Survey of the U.S. Census Bureau, after adjusting for inflation, the median income of Vermont households was essentially unchanged from 2000. People think their incomes are not as bad as what other states pay for the same job. Yet, The “Housing Wage” is well over two times the state’s minimum wage, and would equal an annual income of $39,595.17. Over 300 occupations, more than 53% of Vermont’s non-farm occupations, have median salaries less than this Housing Wage. In simple terms, A renter household must earn $19.03/hour while working full time to afford a modest 2-bedroom unit at HUD’s Fair Market Rent (FMR) and only pay 30% of their income for rent and utilities. The numbers if I recall correctly are higher for home ownership. In Vermont, this is why people have to rely on their homes as retirement income. I'm not saying Vermont is the only state is this boat or that it's the worst, but we have been slowly making our way to the bottom of the list for over a decade. In 2009, over 34,000 renters only (I'm not sure about the home owners numbers at this time) were cost burdened or paying the majority of their incomes to rent. Add another three years of poor economic growth (stagnant incomes) in the mix and that number is higher.
I agree, a home should never be considered part of retirement. We as Americans were accustomed to home value increases for decades, that many unfortunately fell into that quagmire. Nationally, we are looking at another year or two of declining home prices. The economists are saying a large number of foreclosures will hit the market this summer due to processing delays after fraud, or so-called "Robo-signing," were uncovered in the fall of 2010. Given the finalized mortgage and foreclosure settlement reached in early February between 49 state attorneys general and five of the nation's largest lenders, foreclosures will be on the rise again. This also ties into why Vermont continues to have home prices not impacted as harshly. We have a low foreclosure rate. When homes are foreclosed on, it distresses property sales lower and the value of homes around them, and that pushes more borrowers into a negative equity position, owing more on their mortgages than their homes are currently valued. We are not seeing this right now in Vermont. If a neighborhood has several foreclosures, it's possible for this to been seen, but this is far from the norm in Vermont.

[jenny1951]

Windsor must be the exception, then. It doesnt surprise me, though. And that is very bad news indeed. I retired due to illness and was hoping to sell my house to move into a more affordable and manageable apartment. But even with putting $20k down in 2007 and loads of updates (to the tune of around $40k) I am underwater by around 20k. I can't refinance because my Social Security income is too low. Buying this house was a huge mistake. But I don't regret living in Vermont.

[68vette]

Housing prices, like the price of other goods and services in a market economy, are determined by the interactions of supply and demand. People’s demand for owner occupied housing, is primarily determined by the price of housing, population growth and household formation rates, and income growth. Today, population growth in Vermont is low. Looking at the foreclosure rates as well as homes for sale, Windsor, Windham, Bennington and Rutland counties have huge numbers of homes for sale. It looks to be more than the rest of the state combined. This has an impact on prices. If people are moving out of state in these numbers or a large number of people flood the market with homes for sale, prices have no option but to decline. There are only 139 foreclosures in the whole state, this is not the cause for declining prices. It looks to be that the southern counties are flooded with homes for sale.

[OhBeeHave]

Originally Posted by 68vette

Housing prices, like the price of other goods and services in a market economy, are determined by the interactions of supply and demand. People’s demand for owner occupied housing, is primarily determined by the price of housing, population growth and household formation rates, and income growth. Today, population growth in Vermont is low. Looking at the foreclosure rates as well as homes for sale, Windsor, Windham, Bennington and Rutland counties have huge numbers of homes for sale. It looks to be more than the rest of the state combined. This has an impact on prices. If people are moving out of state in these numbers or a large number of people flood the market with homes for sale, prices have no option but to decline. There are only 139 foreclosures in the whole state, this is not the cause for declining prices. It looks to be that the southern counties are flooded with homes for sale.

I would be curious to learn how many of those homes are being sold by 2nd homeowners for whom the economy has grown too lean?

Out of curiosity I phoned my neighbor, who is with the RE office which originally listed my home, and inquired what my place could reasonably be listed for so that it might see some action. $200K. I paid $175K in 2004 for a house in need of work, put work into it, added out buildings. My work into it is closer to $45K, which would put me $20K behind. At this point in time I don't need to sell, but feel it is to my benefit to know where the house stands should I need to. Her advice was to sit tight as there are a glut of homes on the market.

[jenny1951]

As the real estate saying goes; location, location, location. Many of the foreclosures haven't even hit the market yet. Three on my street alone in the past two years, one down the block, a couple more in town. Windsor is really hard hit. When I looked for a house under $140k on the Vermont side of the river in 2007, there were exactly two, including mine. In the past year, there have been several, nicer ones to be had for much less than that. The sad part is that it may take several years to get back to where I could sell and walk away paying what I owe. That isn't a possibility for me.

[68vette]

There may seem like a large number of foreclosures on the market in Windsor and/or Windham Counties, but the total for all of Windsor County is 11 and a total of 15 in Windham County. It could be your area is depressed because they are mostly located in your area? The real reason I would guess prices are down is because of the number of homes for sale. The typical response for when a market is flooded with homes for sale is decreased prices. Windsor County has 578 homes for sale and Windham County has 683 homes for sale. This is almost 1300 homes for sale in two small populated counties. These two counties almost make up half the homes for sale in state.

[Quebecoise30]

Originally Posted by flu189

It's just amazing that when you would think the beatings would cease, or at least take a break to offer some respite with what appears to be an extremely costly winter season looming in the not too distant future, the tax burden just keeps growing unchecked. I thought my tax bill which just arrived was stunning, but today I read where the residents of Sunderland in the SW part of the state are being literally bludgeoned with a 31% increase over last year. I guess the attitude is that we had better get as much money as fast as we can before more and more folks are threadbare. I guess it does not come as a surprise that the moving industry is the one facing steady business. My older son's friend works for one and over a dinner conversation affirmed that business outbound is picking up for those that can afford to relocate.

Sad to say, but we had a job offer in Vermont--which we love--but had to turn it down due to the ridiculous cost of living. so sad.

[FrugalYankee]

And one of those is mine.

I inherited it 15 years ago, tried unsuccessfully to sell it, rented it out for several years and have now decided that I will take a low ball offer before I rent it out again.

My RE agent tells me that average time to sell a home these days is 18 months.

I don't think the issue is foreclosures. My information is strictly anecdotal and not statistical, and it is to the effect that there are plenty of people who would like to buy but who are uncertain if they will be able to carry a 15-30 year mortgage. Rather than go for it and possibly run into problems if one of the wage-earners loses one of their jobs, they continue to rent. Heck if you are a renter and run into financial trouble, the state will pick up your rent tab. Not so for homeowners.

It looks to me like the available homes are simply piling up on the market as more get added and few are sold. When driving around I see many homes for sale that are occupied; I get the impression the owners live there, want out of Vermont, but can't afford to move until they sell their home.

If the economy were better down here I am sure that there would be more buyers who would be willing to take the step but as it is, everyone - potential homeowners and banks are being very cautious.

[angelo129]

Originally Posted by FrugalYankee

My information is strictly anecdotal and not statistical, and it is to the effect that there are plenty of people who would like to buy but who are uncertain if they will be able to carry a 15-30 year mortgage. Rather than go for it and possibly run into problems if one of the wage-earners loses one of their jobs, they continue to rent. Heck if you are a renter and run into financial trouble, the state will pick up your rent tab. Not so for homeowners.

I hear you. Of course, as a long-time renter due to frequent moves for business reasons, I can tell you that there are other (different) potential difficulties with renting if you happen to run into a financial squeeze. At this point, we could buy a house in Vermont, but won't do so for a few reasons: 1) the lack of jobs that pay an acceptable wage, 2) the ongoing increases in cost of living, without any increases in wages for most people, and 3) the fear of getting into somewhat the situation you are in now. A house limits one's mobility, and mobility is a necessity in a volatile job market. We know any number of people whose bank accounts are being drained by houses they own (but can't sell) in places they had to leave for lack of jobs.

[jenny1951]

Originally Posted by 68vette

It could be your area is depressed because they are mostly located in your area? The real reason I would guess prices are down is because of the number of homes for sale.

Yes, Windsor is the worst I guess. I had friends warn me about buying here, but I never anticipated the house would be worth so much less in just a few years. I suppose when an apartment opens up where I am waiting, I will have to walk away. Not much choice there, unless by some miracle I get an offer. I would stop paying for it now, but my credit is excellent and I hate to destroy it because then I won't be able to get the apartment.