Vermont's stunning landscapes and rural charm have made it a long-time favorite for those seeking the serenity of New England. However, the question is, is investing in Vermont land a wise financial decision? Recent statistics indicate promising trends that potential investors should consider. According to the USDA's 2017 Census of Agriculture, the average farm real estate value in Vermont—including land and buildings—was $3,820 per acre, marking a 2.1% increase from 2012. Moreover, the state experienced a 6.9% rise in the number of farms between 2012 and 2017, a stark contrast to the national decline. These figures signify a strong agricultural land market in the Green Mountain State, but investors need to look beyond the numbers.

The Booming Housing Market in Vermont

Vermont's real estate market, particularly in residential areas, has gained momentum in recent years. From 2020 to 2022, the median single-family home price surged nearly 20%, with hotspots like Burlington witnessing even greater increases.

As of January 2023, active listings were down 30% compared to the previous January, leading to competitive bidding wars that have escalated sale prices. This imbalance between high demand and lower inventory has resulted in considerable equity gains for homeowners; those who purchased properties five years ago could see their investments double.

While some may think that vacant land will mirror this home price growth, the reality may be different. Can the value of lots and acreage keep pace, or is a cooldown in buildable land prices on the horizon?

Analyzing Vermont Land Prices

To evaluate the investment prospect of Vermont land, let’s analyze key price metrics. Statewide, the average price for vacant land rose around 5% year-over-year from 2021 to 2022, although the median cost per acre dipped 6% to $7,500 as of June 2022.

This indicates that while high-value transactions lifted the average, the median price softened due to a decline in lower-tier trades. Looking further into county data, we observe the following trends:
- Chittenden County: Average per-acre price increased by 20%, but median price fell by 15%.
- Rutland County: Average acreage price rose 61%, while the median decreased 44%.
- Windham County: Average land value grew by 13%, yet median prices dropped nearly 35%.

Interestingly, Burlington's city limits saw average prices double year-over-year, with median prices jumping 71%. However, just ten minutes outside city limits, values plummeted, as average prices dropped 68% and median prices slid 30%.

Understanding the Investment Outlook for Vermont Land

Despite the rising demand for residential real estate pushing home prices higher, vacant land presents a mixed picture. Prime parcels in sought-after regions like Burlington continue to break price records, yet areas just outside urban centers show signs of stagnation or decline.

With rising interest rates making financing pricier in 2023 and 2024, optimistic expectations for land returns may need tempering.

State Incentives Enhance Developer Appeal

The housing shortage in Vermont underscores the need for more high-density development. Limited available land, particularly near urban hubs, has prompted the state to implement new legislation in 2022 aimed at stimulating construction.

The state offers tax incentives, permitting reforms, and a $40 million fund for infrastructure expansion to encourage housing developments. Builders acquiring approved lots can recover 50% of land acquisition and permitting costs, making it a lucrative opportunity for developers.

Strategic investors can capitalize on this by targeting larger plots just outside metro areas, which are primed for multi-unit housing projects.

Factors Influencing Vermont Land Investment Potential

When contemplating whether Vermont land can deliver solid returns in 2024, a few key factors must be considered:
- Location: Premium acreage near vibrant communities appreciates fastest, while areas further from population hubs can moderate rapidly.
- Intended Use: Parcels designated for housing or that can receive near-term development approval yield the best returns, thanks to state incentives.
- Market Timing: Although prices have soared since 2020, certain land prices outside the hottest areas appear to be plateauing in 2023. Investors who buy wisely still see potential.
- Economic Conditions: Recent trends indicating a slowdown in migration to Vermont and rising interest rates temper investor enthusiasm and may impact future valuations.

The Vermont Land Investment Outlook for 2024

For buyers with a long-term vision, Vermont land still offers solid appeal, even as signs of price growth stabilization emerge.

Investors and developers should focus on approved inventory near job centers to maximize benefits from state incentives. If you’re keen on constructing residential compounds in scenic Vermont, now may be the time to act.

However, those hoping for quick, high returns on raw acreage may find the outlook more challenging. As housing construction catches up to demand, property appreciation rates may moderate.

Final Thoughts

Vermont stands out for its natural beauty, contributing to consistent property interest that has sharply elevated real estate values. Yet, successful land investment relies heavily on strategic location and market timing. Approved development sites in Vermont’s growing metro centers may offer the best prospects for gains, while distant acreage may face uncertainty. Collaborating with trustworthy partners and making informed decisions will enhance your chances of success.

Frequently Asked Questions (FAQs)
- Is it a good time to buy land in Vermont in 2024?
Vermont remains attractive for property ownership due to its enduring beauty and real estate appreciation. However, prices outside prime areas may be plateauing. Savvy buyers can benefit from timing and location selection.
- What type of land offers the most investment potential in Vermont?
Approved parcels for housing or multi-unit developments near growing job centers provide the best returns currently due to favorable state policies.
- How fast does Vermont land typically appreciate?
On average, land values increase by about 5-7% yearly, but specific high-demand areas can see even greater increases.
- How difficult is it to sell Vermont land?
Selling in Vermont is generally easier but can take 1-2 years unless priced attractively. Developers seek approved lots, while remote woodland lots appeal to lifestyle buyers.
- What factors most impact land prices in Vermont?
Location, zoning potential, infrastructure access, and economic conditions all heavily influence land valuations. Targeting properties near growing job centers ensures higher long-term value.