Is Vermont Land a Good Investment?

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Is Vermont Land a Good Investment?
By

Bart Waldon

Tucked away in the scenic northeastern corner of the United States lies the small but mighty state of Vermont. Known for its rolling green mountains, quaint towns and villages, maple syrup, craft beer and artisanal cheeses, Vermont has long attracted visitors and transplants alike for its slower pace of life and natural beauty.

In recent years, Vermont has also begun garnering attention as a potentially solid real estate investment opportunity. With demand rising and available land limited due to strict zoning laws, some posit that Vermont property could present smart money-making prospects for land investors and developers.

Below we’ll analyze several key factors to evaluate if putting your cash into Vermont land is likely to pay dividends or not in the current market climate of 2024.

Vermont’s Hot Housing Market

Vermont real estate, especially residential, has been on a tear in recent years. The median single family home price rose nearly 20% from 2020 to 2022 statewide, with even faster growth logged in popular destination areas like Burlington and environs.

Inventory has not kept pace with demand either. As of January 2023, active listings sat 30% lower than the previous January according to Vermont Realtors data. With fewer homes for sale to go around, bidding wars have become the norm driving up sale prices.

This imbalance between high buyer interest and lagging housing stock has created substantial equity gains for Vermont homeowners. Those who purchased property 5+ years ago have likely seen their investment double or more on paper.

Rapid home price appreciation may lead some to believe vacant land holds similar profit potential. But can lot and acreage values keep up with the hot housing market? Or is buildable land due for a cool down instead?

Digging Into Vermont Land Prices

Let’s look at key land price metrics to better understand the Vermont land investment proposition.

Statewide, the average per acre price for vacant land rose around 5% year-over-year from 2021 to 2022. However, median cost per acre actually dropped 6% over the same period sitting at $7,500 as of June 2022.

So, while the midpoint price softened a bit, higher value trades above the median lifted the statewide average. We see similar divergence at the county level:

  • Chittenden County: Average per acre price up 20% since 2021 but median per acre price down 15%
  • Rutland County: Average per acre climbed 61% while median fell 44%
  • Windham County: Average per acre increased 13% yet median dropped nearly 35%

Drilling down even further, average land values within Burlington city limits doubled year-over-year with median prices jumping 71%. However, go just 10 minutes outside city limits into South Burlington and both metrics fall with average acreage cost down 68% and median price slipping 30%.

What does this tell us about the Vermont land investment outlook?

While residential real estate demand keeps pushing home prices higher across Vermont, vacant land presents a far more mixed picture. Trophy parcels in the most coveted areas like Burlington continue to break records. Yet just minutes outside of metro centers, both average and median land prices show signs of stagnating if not softening somewhat.

Sprinkle in rising interest rates making financing large purchases more expensive in 2023/2024 and this tempers bullish expectations for vacant acreage returns going forward.

State Incentives Boost Appeal for Developers

If rampant housing shortages teach any lesson though, it’s that more high-density building must occur to temper price growth and inflation. And little unused land remains in Vermont’s tightly regulated confines, especially surrounding urban hubs.

Recognizing this dynamic, Vermont introduced new legislation in 2022 focused on spurring more construction starts. Tax incentives, permit reform and $40 million allocated towards infrastructure expansion all aim to catalyze housing developments.

Builders able to purchase approved lots in targeted zones can recoup 50% of land acquisition and permitting costs from Vermont’s new incentive fund. In a state notoriously difficult for securing permits quickly, fast-tracking projects from shovel ready inventory proves enticing.

More housing-friendly policies bode particularly well for land buyers able to snap up and subdivide larger acreage plots just outside metro regions. 15-25 acre parcels near growing commercial centers become prime targets for multi-unit housing projects with fast-track state backing.

Savvy investors may enjoy higher returns developing approved properties in the years ahead compared to simply land banking raw acreage speculatively.

Key Factors Impacting Vermont Land Investment Potential

As we weigh whether Vermont land offers strong money making upside in 2024, several key factors come into play:

Location 

Choice acreage near Vermont’s most vibrant communities continues appreciating the fastest. Yet markets moderate quickly further out from population hubs. Windham County posts the highest median land values due to second home demand, though higher density Chittenden County offers more opportunity long-term.

Intended Use 

Parcels zoned for housing/development or with near-term approval potential net highest returns thanks to state building incentives. Yet land banking remote wooded acreage for personal use or future subdivision sells easiest in Vermont’s thriving real estate environment.

Market Timing 

Despite S&P/Case-Shiller indexing Vermont property 30% higher since 2020, land prices outside hottest zones show signs of plateauing in 2023. Earlier buyers reaped largest gains, but well-selected parcels still hold appeal for developers.

Economic Conditions 

Pandemic-era migration into Vermont appears slowing with return-to-office plans taking hold. And rising interest rates cool demand and investor appetite. Any recession could hit rural Vermont harder long-term.

The Vermont Land Investment Outlook For 2024 

For buyers with longer time horizons seeking stability over rapid gains, Vermont land still holds appeal despite 2022 showing early price growth cracks.

Strategic investors and developers should concentrate efforts on approved inventory near Vermont’s fastest growing job centers to maximize state incentive potential. And those looking to build residential compounds in Vermont’s scenic countryside may shop aggressively in 2023 before rate lock-ins expire.

Yet for those hoping to bank double digit returns flipping raw acreage specs in the near-term, Vermont land’s outlook appears more precarious. As housing construction catches up to buyer demand in coming years, property appreciation should moderate accordingly.

In closing, Vermont land a good investment still largely depends on your purchase timeline and site specifics in 2024 and beyond. State building incentives sweeten approved development plays amidst easing land gains otherwise. Target location and intended use wisely when buying acreage, and Vermont land can retain stable long run growth potential ahead.

Final Thoughts

Vermont offers much natural splendor and appeal as one of America’s most scenic states, driving consistent property interest that’s lifted real estate values sharply in recent years. Yet savvy land investors know location and market timing remain paramount. While approved development sites in Vermont’s growing metro centers appear best positioned for returns in 2024’s cooling market, vast acres further afield face more uncertainty. With strategic lot selection and reasonable hold periods still, Vermont land can provide stability and modest gains for years ahead across cycles. Though no longer the outsized returns seen at peak frenzy, Vermont property retains lasting virtues other states may envy when purchased wisely. The state’s incentives boost greenlit projects, but remain selective when banking on future subdivision potential alone.

Frequently Asked Questions (FAQs)

Is it a good time to buy land in Vermont in 2024?

Vermont remains a desirable state to own property in 2024 due to its natural beauty and steady real estate appreciation over time. However, land values outside prime development zones show signs of plateauing after rapid gains earlier. Savvy timing and location selection are key when investing in Vermont land this year.

What type of land has the most investment potential in Vermont?

Approved parcels zoned for housing or multi-unit development near growing job centers like Burlington offer the most upside currently. New fast-track permitting and 50% cost subsidies from Vermont make approved inventory most attractive in 2024 versus raw, undeveloped acreage.

How fast does Vermont land typically appreciate?

On average Vermont land values climb 5-7% a year. However prime parcels in core metro areas similar to Burlington have logged 20%+ annual gains at peak market frenzy. Expect more moderate single digit returns for most acreage during 2024’s cooling phase.

How difficult is selling Vermont land?

Vermont’s allure helps land here sell easier than many states, but still often takes 1-2 years to attract buyers unless discounted significantly below market value. Developers snap up approved lots fastest while remote, wooded acreage appeals more to lifestyle buyers willing to wait for the right fit.

What factors impact Vermont land prices the most?

Location, zoning potential, infrastructure access and local economic health drive Vermont land valuations and buyer interest most. Parcels nearer to growing population and job centers with housing or subdivision upside warrant the steepest premiums long-term.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.

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