For Kate Barido, finding a home in northwest Wisconsin’s Sawyer County should have been a breeze. Born and raised in the county, home of the Fresh Water Fishing Hall of Fame and the Lumberjack World Championships, Barido grew up mountain biking its renowned trails and is former marketing director for the American Birkebeiner Ski Foundation, which hosts the area’s signature cross-country ski race, affectionately known as “the Birkie.”
Despite her deep roots in the community, the hunt for a home that can accommodate her and her husband, two young children, dog and “a lot of bicycles” has been an “emotional roller coaster,” said Barido, 41. When she started looking for a Sawyer County home last summer, after nearly 20 years living out of state, she found that most homes listed within her price range of up to $450,000 were “completely outdated,” she said, and would require pricey renovations. She made offers on several homes that weren’t ideal, she said, but they were all rejected.
Barido’s husband is a contractor, and the family is considering building a home, but “the construction costs are extremely high,” given the price of lumber and other materials, she said.
For now, the family has squeezed into an 800-square-foot, two-bedroom, one-bath rental — a lifestyle more typical of New York City than northern Wisconsin. And they’re trying to be patient while they continue to search for a piece of land where they can one day build a larger home. “It would be nice to have an extra bedroom,” Barido said.
In small towns across America, housing inventory has evaporated in recent years, crushing dreams of home ownership for many. From rural areas to charming communities and off-the-beaten-path locales, housing inventory has plunged in the five years ending in April, according to a MarketWatch analysis that focused on counties with at least 500 listings in any month and under 2,500 in all months of 2017. In Sawyer County, Wis., with its vast forest land and lakes, housing inventory has dropped 87% — the biggest percentage decline of any U.S. county, big or small, over that period. The county had just 79 listings in April of this year, down from more than 600 five years earlier.
When it comes to small towns, no region in America has been impacted more by the inventory crunch than New England, where eight small counties have seen houses available for sale tumble by more than 80% in five years.
MarketWatch analyzed more than five years of monthly housing inventory statistics from Realtor.com, a website that aggregates listing data from the Multiple Listing Service platform used by industry practitioners. The total listing count, both active and pending listings, was parsed at the local level and used to create a new MarketWatch tool. The tool allows you to search the more than 2,000 counties that had at least 50 listings in any month of 2017, and see the change in homes available for sale today.
The data signal a new reality for many rural areas unaccustomed to cutthroat housing competition. In terms of months of housing supply, for example, rural Wisconsin counties such as Sawyer would traditionally have roughly double the inventory available in metropolitan areas, said David Clark, an economics professor at Marquette University and a consultant for the Wisconsin Realtors Association. But over the last several years, that gap has all but disappeared, and in April rural Wisconsin counties had just 2.8 months’ worth of supply, only slightly higher than the 2.3 months’ worth of supply in metropolitan counties, he said.
What changed: Many baby boomers have sought out retirement properties far from the bigger cities, Clark said. People with newly flexible work arrangements have flocked during the pandemic from the cities to more remote areas, real-estate agents said. Home construction slowed due to supply-chain issues, high materials costs and labor shortages. And, as inventory thinned, according to Realtors, many homeowners backed away from plans to list their properties for fear they wouldn’t be able to find another place to live.
“We’re in unprecedented territory now with inventory as tight as it is,” Clark said. “There are no good places to move to.”
As mortgage rates rise, demand may cool and ease the inventory crunch in some areas. But in many of the smaller towns now suffering some of the most acute housing shortages, local real-estate experts said there are longer-term factors likely to keep a lid on inventory, ranging from state and local permitting and zoning issues to lack of buildable land.
In Sawyer County, for example, undeveloped lakefront land is dwindling as new arrivals snap up waterfront property. The area draws everyone from fishing aficionados to lovers of gangster lore. Chicago mobster Al Capone had a Prohibition-era hideout in the county, and today one of the area’s icons is the “Big Musky,” a 4½-story-tall fish sculpture that looms over the Fresh Water Fishing Hall of Fame.
Sawyer County’s proximity to Eau Claire, Wis.; Duluth, Minn.; and the Twin Cities made it a natural draw for pandemic-era remote workers seeking access to outdoor recreation, local real-estate experts said. Whether they were buying a vacation home or a permanent residence, “people wanted out of the big-city life,” said Charlie Munich, a locksmith and mayor of Hayward, Wis., the seat of Sawyer County. Now, most contractors in the area are booked solid and “aren’t even answering their phones,” Munich said. Some people are hiring contractors who are willing to drive over from Minneapolis, he said, because “the locals are overwhelmed.”
The median Sawyer County listing price per square foot was $246 in April, up nearly 50% from a year earlier, according to data from Realtor.com, which like MarketWatch is owned by News Corp. Matt Albrecht, broker at Woodland Developments & Realty in Hayward, said he could “make an awful lot of money” selling his current home, which has jumped more than $100,000 in value since he bought it in 2015. But, ideally, he’d want to move to a lakefront home — which is all but impossible to find. If he sells, “where are we going to go?” he asked. “There’s nothing else on the market.”
Early this year, Jenifer Prouty Hoffman had a plan to build some much-needed housing in Vermont’s Bennington County. Hoffman, a Realtor, is married to a general contractor, and the couple were looking to build a subdivision of 20 to 24 homes in the town of Shaftsbury, she said. They had maps and drawings detailing how they’d lay out the roads and the styles of homes to be built. That should have been great news for Bennington County, where housing inventory declined 82% over the past five years, to just 109 listings in April, according to a MarketWatch analysis of Realtor.com data.
Then the obstacles started to pile up. First, the cost of construction was climbing fast, with labor and materials expenses skyrocketing, Hoffman said. Then there was the cumbersome process of obtaining wastewater, stormwater runoff and other permits, Hoffman said, and dealing with a state land-use law that generally imposes an additional review process on developments of more than 10 homes. “We put quite a lot of time and effort into design and planning,” she said. But given the regulatory hurdles, “it feels extremely overwhelming,” and she has shifted the project to the back burner for now, she said.
The fact that the process discouraged Hoffman, the 2021 Vermont Realtor of the Year and a third-generation Benningtonian married to a builder with decades of experience, underscores the challenges facing would-be developers in the state. In some cases, developers must navigate multiple, overlapping permitting processes, and “in the worst-case scenarios, you have the town telling you to go left and the state telling you, ‘No, you need to go right,’ ” said Maura Collins, executive director of the Vermont Housing Finance Agency. “That duplication of oversight can add to the cost and the risk and uncertainties for housing developers.”
That’s one factor contributing to a statewide housing shortage in Vermont, local real-estate experts say. Of the 20 counties nationwide whose housing inventory plunged more than 80% over the past five years, according to the MarketWatch analysis, eight were located in small-town New England. They included three Vermont counties: Bennington, Washington and Windsor. Like many rural areas across the country, parts of Vermont have drawn waves of remote workers during the pandemic. That pressure comes on top of longstanding issues like aging housing stock, the popularity of seasonal vacation homes, permitting and zoning issues, and public opposition to development that further constrain the supply of available homes.
Just before the pandemic started, the Vermont Housing Finance Agency estimated that the state would need more than 5,700 additional homes between 2020 and 2025, Collins said. Given the migration to the state during the pandemic, she said, the “reality will likely be higher.”
Some real-estate agents in the area say they’re going to extraordinary lengths to find homes for buyers with moderate income. Lori Hurley, a broker in Bennington, recently worked with a client who qualified for a mortgage backed by the Federal Housing Administration. But she knew that the home he could afford wouldn’t pass the inspection required as part of the FHA appraisal process, she said, and the seller wasn’t willing to make the necessary repairs. So Hurley found local contractors who were willing to donate their labor, paid for about $1,500 in materials out of her own pocket, and got the electrical, roofing and painting done so that the house could pass the inspection, she said.
“I have my plate filled with all these heartache stories” of buyers struggling to find homes they can afford, Hurley said. “How do you look at a family so desperate, when you’re in a situation to help?”
State and local policy makers are trying to tackle the problem. The Vermont Housing Finance Agency, for example, is launching a pilot program that aims to encourage construction of moderately priced homes by covering the gap when construction costs exceed a property’s appraised value. “Since we have so little new construction, there’s really not a lot of comparable homes and the appraised value can be artificially lower than what we know the market will support,” making it difficult for potential buyers to get mortgage financing at the sale price, Collins said. If a home costs $450,000 to build, but a mortgage lender will only approve financing based on a $430,000 appraised value, for example, this program would help cover the difference.
The program will also allow for an affordability subsidy if a home’s sale price, based on its appraised value, is still too expensive for a moderate-income buyer. That subsidy will stay with the home permanently, so it can lower the price for the next buyer in line, Collins said, if the initial buyer sells the home.
Towns are scrambling to pave the way for more housing without paving over farms and mountaintops. Some have converted empty commercial spaces to residential units. And in Bennington County, the towns of Bennington and Manchester have recently revised bylaws to encourage higher-density housing and mixed-use developments that include residential units, said Jim Sullivan, director of the Bennington County Regional Commission. That’s a delicate balancing act, said Janet Hurley, Manchester’s zoning administrator and planning director. “One of the main draws of Manchester is these pastoral, rural vistas,” she said, and as the town allowed for more density in its core, it increased minimum lot sizes in its more rural areas.
Manchester is also weighing the development of at least 40 to 50 apartments on town-owned property downtown, said Hurley, the zoning administrator — but the plan is controversial. “Plenty of people don’t want things to change,” she said. “They want to see Manchester as it is, and not get any more urban-looking.”
Asher Edelson, 27, is one of the rare homebuyers who has beaten all the odds. After moving to Vermont from Florida about three years ago, he quickly became a community leader, serving as a teacher, school-board member, and chair of the Bennington Town Democratic Party and of the State Rehabilitation Council, which advocates for services and resources for Vermonters with disabilities.
Edelson’s initial efforts to buy the North Bennington home he was renting weren’t successful. The landlords, he said, showed no interest in selling. When he started looking around for other homes to buy around the start of this year, there was only one property that appealed to him. Unlike most homes in the area, it had been on the market for some time — perhaps, he said, because the four-bedroom home has only one working bathroom. Edelson made an offer at the asking price, and it was accepted.
“I think I hit the jackpot,” Edelson said of his new home.
In many of Maine’s postcard-perfect towns, the number of homes available to buy has also plunged. Overlooking the Sheepscot River in Midcoast Maine, the town of Wiscasset has claimed the title of “prettiest village in Maine” and is known for Red’s Eats lobster rolls, which create summer traffic nightmares on Route 1 paralleling the Atlantic Ocean. It is also the seat of Lincoln County, where the number of homes for sale has fallen by 86.5% in the last five years to 65 in April.
Total listings in Hancock County, home of Acadia National Park, dropped from 889 in April 2017 to 142 in April 2022, or 84%. Housing inventory tumbled 83.2% in Franklin County, where lake and college towns like Rangeley and Farmington are located.
Jill Mayhew, a Realtor in Hancock County, said more people are moving to the coastal area to take advantage of outdoor natural recreation, creating a frenzy of demand. In the past, it would have been unusual for one house to receive 11 offers, but that is what Mayhew said recently occurred after one house was shown to buyers for three straight days with every viewing slot filled.
“People realize that they can work from home,” Mayhew said. “If I can work from home, I can live anywhere I want to.”
Ryan Wallace, director of the Maine Center for Business and Economic Research, said the acute housing shortages in Maine are related to a surge of migration to the state. Wallace noted that the influx included early retirees, second-home buyers and people who can work from anywhere, many with higher-wage jobs tied to metropolitan areas. In much of Maine, Wallace added, the housing stock is overwhelmingly old and the building of new houses is slow, with material and labor both expensive and scarce, a problem that predated the pandemic.
Daniel Brennan, director of MaineHousing, which administers federal grants for homelessness and rental assistance, said the flood of people moving to Maine has squeezed young local families looking to buy a first home. In response, the state’s Housing Finance Agency has increased its down-payment assistance program grant to $5,000 from $3,500. Maine has also directed federal stimulus money, authorized tax credits and loosened zoning restrictions to mitigate labor and supply issues related to home building, and make affordable housing more accessible.
Nevertheless, Brennan said, the state is in the depths of one of its biggest housing crises due to the shortage of single-family homes.
In the westernmost county of New York, 420 miles from the Empire State building, there recently were only 158 homes available to buy, down from 1,200 in the same period five years ago. Nobody would mistake Chautauqua County for Manhattan, but these days its real-estate market is every bit as competitive. Chautauqua County has seen the second biggest percentage drop, 86.8%, of housing inventory in the country for counties that had at least 500 listings in a single month of 2017. Bordering Lake Erie, it’s a nearby vacation destination for residents of cities including Cleveland and Pittsburgh.
A local broker, Steve Holt, has noticed the exasperation of home buyers. He said people are paying all cash for homes or putting a significant amount of money down, and most of them are leaving out contingencies, like home inspections. Many buyers are losing multiple bids on homes, and properties are even being sold sight unseen.
“A lot of my calls are from buyers frustrated because they can’t compete with all-cash offers,” said Holt. “I’ve been doing this for over 25 years, and I have never seen this much cash out there.”
How did Chautauqua become a poster child for the nation’s housing-inventory shortage? Holt points to its nice residential communities and resort towns that are relatively close to such bigger cities as Buffalo, Pittsburgh, Cleveland and Toronto. He also described improvements in infrastructure, specifically a major expansion to the sewer district over the last 10 years that has made it easier for communities to grow. Good school districts and the relative lower housing prices compared with some big cities have also fueled demand. Holt said that people who can now work remotely are making their vacation spot a residential one, too.
The Chautauqua Institution, located in the county, is touted as a place for middle-class America to make purposeful use of leisure time, according to Emily Morris, its chief brand officer. Founded in 1874 as a place for Sunday-school teachers to receive training, it now serves as the location of a nine-week summer “multidisciplinary festival that centers on lifelong learning.” About 100,000 people visit every year, mostly during the nine-week program.
Morris believes that the Chautauqua Institution, like other tourist destinations, has become a more attractive place 12 months of the year rather than a place people visit for a weekend or a season. “Our aspiration as an organization is to build out more activities and programming outside of that summer assembly, much more significantly than we have already, and it’s great to have more people in the region to be a part of that.”
Mark Gordon had been casually looking for a place in the region after attending the Chautauqua Institution’s events for many years and finally put an offer on a place in November. He said that he was only able to buy the property in such a hot market because it was distressed and needed a lot of work. The list price was $499,000. His $400,000 all-cash bid won out.
“It’s a summer community that’s highly sought-after with very limited housing,” Gordon said.
For Gordon, the renovations have been difficult, with supply-chain backups and labor shortages among plumbers, electricians and architects holding up progress. He said he started ordering appliances in the fall, anticipating delays, but some are just now showing up over six months later. Gordon also had to remove and replace all the furniture and has experienced backorders on large items.
He said he only found an architect after making many calls. “I had to get some architectural plans to do some foundation repairs. A number of the architects gave me dates well into 2023, which serve no purpose for me trying to get it done this year,” Gordon said.