Vacation properties saw a surprising increase in sales last summer, compared to 2008. Vacation home sales processed in the July through October period were up 61.6%, and vacation condo sales were up 68.6%. Of course, these vacation market sales are being measured against a period of very low vacation property sales just before and during the 2008 financial meltdown.

According to brokers, the most notable aspect of the market has not been vacation sales – which they say are still slow – but the increased activity in the lower end of the primary home market prompted by low mortgage rates and the first-time homebuyer tax credit.

Nationally, sales are up and prices are down. In the third quarter, total existing home sales were up 11.4% compared to the second quarter, and 5.9% above a year ago, according to the National Association of Realtors (NAR). In contrast, Vermont primary home sale volume this summer and fall was down 15.9% compared to 2008.

The national median existing single-family price came in at $177,900, which was 11.2% below the third quarter of 2008, the NAR said. In Vermont, the median price of a primary home is down 4.5% compared to last year. Both nationally and in Vermont, the lower median price may partly reflect stronger sales of “starter” homes and weaker sales in the upper half of the market.

Within Vermont, the various markets are behaving quite differently. Broker Seth Warren, of Seth Warren Real Estate, with offices in Windsor and West Windsor (a.k.a. Brownsville), is well-situated to see those differences. His firm covers three types of markets: the primary home market in Windsor; the upper-end rural vacation, retirement, and equestrian home market in Brownsville; and the ski resort market at Ascutney Mountain.

In Windsor, two-thirds of sales are to first-time homebuyers, which has fueled sales of smaller, cheaper homes, Warren said. Inventory is up, but it is not alarmingly high, he said. Values may have slipped between 10% and 20% since the peak of the market in 2005 or 2006, he estimated.

The Brownsville second-home market, which is similar to the nearby Woodstock market, has been “pretty quiet,” he said. Last year, there were 20 homes sold in Brownsville; this year there have been five sales so far, most of them involving foreclosures or sellers with financial pressures, Warren said. They have sold for as much as 40% below peak prices, he said.

However, most sellers are not willing to lower their properties that much, and are in a position to hold out for higher prices, he said. “When the dust settles, I think the price changes for high-end vacation homes in places like Brownsville and Woodstock and Manchester will be muted compared to other parts of the state,” Warren said.

At Ascutney ski resort, there has only been one sale a year for the last two years, he said, compared to 6 to 8 per year before that. A three-bedroom slopeside condo at Ascutney used to sell for $270,000, but right now there are two foreclosed units for sale at $159,000, he said. If sales do not pick up, Warren said the market at Ascutney could be headed toward a “catastrophic” situation.

Other ski resort towns are also seeing weak sales. In Stowe, third-quarter sales in the local MLS were half of last year’s number, according to broker Leslie Gauff, of Coldwell Banker Carlson Real Estate. Buyers seem to be waiting to see if the market has bottomed, she said.

In Stratton, however, activity has picked up “quite a bit” in the last two months, with buyers – who are expressing more optimism about the economy – shopping for bargains, mostly in the market under $500,000, according to broker Betsey Cetron, of Winhall Real Estate. Prices are lower, making for good opportunities for buyers, she said.

In the Middlebury area, which is mostly a primary home market, the market was “surprisingly busy” this summer and fall, according to broker Nancy Foster, of RE/MAX Champlain Valley Properties. Buyers are attracted by prices that are flat or down a little and by today’s low mortgage rates, but they “are being very picky because there are so many homes to choose from.”

Foster also noted that buyers “are not stretching themselves like they did a few years ago – they want to be very comfortable financially.” She said the financing process has become much more difficult, making it harder for people to move to the area, even if they have jobs waiting.

Broker Lori Pinard, of C21 Jack Associates in Montpelier, reported that in Washington County so far this year, the number of residential sales is off just 3.9% compared to the same period last year.

The median price has fallen from $187,500 to $169,500, but the average price has been steady and the number of days a property is on the market has fallen slightly to a median of 112 days, she said.

Inventory in the city of Montpelier is up a bit from last year, but even with 53 active listings “there isn’t much selection if you are looking in a specific size or price category,” Pinard noted.

Nationally, the very high end of the market has been weak, with asking prices being slashed in markets like Aspen, CO. The high-end Vermont market has also been slow, with high inventory, but some sales are now occurring, brokers and attorneys say.

Among other recent high-end sales, one home on 248 acres sold in Bridgewater for $5.4 million on Oct. 22. The same property sold three years ago for $7 million, a price that some appraisers at the time thought was unrealistically high.

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