Following is an article I found on Bloomberg.com that adds to the many reasons of why Vermont is a great place to live:
Jan. 29 (Bloomberg) -- Vermont is avoiding the foreclosure crisis plaguing homeowners across the U.S., perhaps owing to traditions of thrift, modesty and self-reliance -- bolstered by laws that protect buyers and land.
The foreclosure rate in Vermont is the lowest in the U.S., 0.04 percent of all homes in the state, according to RealtyTrac Inc. of Irvine, California.
“People in this part of the country don’t like to risk anything unless they really have to,” said Gary Ely, 71, of St. Johnsbury. “Across the country people charge, charge, charge; people in this part of the country tend to be conservative.”
Vermont homeowners also may be protected by having a small and older population, a housing shortage, and lending and environmental laws. It had 137 of the 2.3 million foreclosures in the U.S. last year, while Nevada led with 77,693, or almost 7.3 percent of its housing units, according to RealtyTrac.
One Vermont law sets an annual interest-rate level known as the declared rate. It’s the 12-month average of the interest rates banks charge each other to borrow money. This year’s rate under the 10-year-old law is 6 percent.
Lenders that offer a mortgage at a rate exceeding the declared one by more than 3 percentage points, or that charge more than 4 points, must give borrowers a list of other loan companies, said Tom Candon, deputy commissioner for the Banking, Insurance, Securities & Health Care Department.
That shows borrowers whether lower-cost mortgages are available from other sources, he said. It also discourages lenders from charging higher rates.
Establishing a Ceiling
“Lenders used that as a ceiling so they wouldn’t have their potential borrower shop around,” Candon said. “We have conservative people and they are going to take a really close look.”
State and local laws discourage the kind of speculation that spurred development in some states, said Robert Hill, executive vice president of the Vermont Association of Realtors in Montpelier. If a site for home construction is found to be on prime agricultural soil, the project is halted. The house must be built elsewhere, other land must be purchased and put in a trust as an offset, or the builder must go to court to seek clearance, he said.
“The permitting process is extremely difficult to maneuver in Vermont,” Hill said. “Any developer or builder has to make a significant investment of time and effort. You just can’t come in here and throw stuff up overnight.”
Vermont’s population of 621,270 makes it smaller than every state except Wyoming. Even so, demand has outstripped the supply of housing. With no surplus of homes, prices didn’t collapse when buyers decreased, Hill said.
Sales, Price Declines
The number of homes sold dropped to 3,000 last year from 3,800 in 2007, while the average price declined to $275,000 from $280,000, according to the realtor association. The figures exclude residences that weren’t sold through an agent.
The age of the population may have damped enthusiasm for extravagant houses or esoteric loans. Vermont’s median age in 2006 was 40.4 years, surpassed only by Maine’s, according to U.S. Census Bureau estimates. The U.S. median was 36.4.
That leads to “fewer foreclosures and people doing fewer dumb things with their money,” said Nick Ward, 60, interim director of the Vermont Historical Society in Montpelier, the state capital.
Vermont does have 3,000 subprime loans, according to a report this month by the state Housing Finance Agency and the Champlain Valley Office of Economic Opportunity. More than half of those are adjustable-rate mortgages with an initial interest rate that will be reset after an introductory period.
In 2007, 11 percent of all homes bought in Vermont were financed with subprime loans, according to the report. Of all active mortgages in Vermont, 3 percent have subprime, adjustable- rate loans, Candon said.
Trigger Events
Based on calls to the state mortgage assistance program, 53 percent of foreclosures in Vermont are blamed on job loss, 20 percent on medical problems, 14 percent on divorce and 14 percent on adjustable and subprime mortgages, he said.
People in Vermont don’t like shows of conspicuous wealth, said Paul Searls, a professor at Lyndon State College in Lyndonville.
“I think the frugality springs out of the earliest Puritan culture,” said Searls, author of “Two Vermonts: Geography and Identity, 1865-1910.” “It is a New England thing. The Puritans were very into self-denial.”
Thrifty Habits
People think twice about spending money, said Brenda Trafan, 45, of St. Johnsbury.
“If you don’t have the money, you don’t buy,” said Trafan, a clerk at Caplans Army Store. “If you can’t pay cash, there’s no sense having it.”
Even the governor avoids ostentatious lodging, with no mansion provided for the state’s chief executive officer.
“Vermonters are known for fiscal prudence,” said Governor James Douglas. “People know each other, know their banker. Lenders are able to make a good judgment.”
To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net
John Abry is a Real Estate Broker with RE/MAX North Professionals in Colchester Vermont