Andy Broderick’s family recently decided to sell their three-bedroom home on Ludwig Court, behind the Shelburne Road Dunkin' Donuts, for $135,000. Figuring it would take at least a couple of weeks to find a buyer, the Brodericks placed a pricey, multi-day ad in The Burlington Free Press. They got 32 inquiries in two days. The house quickly went under contract, at the full asking price, to one of the first lucky callers.

“It was unbelievable," says Broderick. "We knew this was a good time to be selling, but we had no idea there'd be such a wild response.”

Jessica Oski, Assistant City Attorney for Burlington, has been looking for a home within biking distance of downtown for the past two months. She had initially hoped to buy a two-bedroom house for around $110,000. But the more Oski looked, the higher her price range crept — to a current maximum of "$120,000, maybe $125,000." She says she might have considered the Broderick home, had she heard about it before it was too late.

The experiences of Oski and the Brodericks are being repeated throughout the Burlington area as an already-sizzling housing market begins to overheat. Veteran realtors describe the current competition for reasonably priced housing as the fiercest they've ever seen.

What's feeding the frenzy? According to economists and brokers, it's a simple dynamic of demand vastly exceeding supply.

In today's flush economy — which, until recently, featured very low mortgage rates — many Burlington-area residents can afford to become first-time homeowners, as in Oski's case, or they can move up to more spacious, pricier quarters, as the Brodericks are doing.

In addition, some market analysts think a growing number of young professionals are moving to Chittenden County from the flatlands, further swelling the ranks of potential buyers.

“It's a beautiful place to live," notes Ron Bouchard, sales director for Homestead Design and president of the Northwest Vermont Board of Realtors. "People already here tend to stay, and a lot of others want to come here.”

“We seem to be seeing an influx of internet commuters," observes Nancy Jenkins, realtor-extraordinaire for Coldwell Banker. "Demographically, there's this group that can afford trophy homes and who can live anywhere they want.”

At the same time that demand is soaring, the supply of available homes is shrinking. In February 1977, notes Jenkins, 776 homes were for sale in Chittenden County; as recently as February 1998, the total was still around 700. But in the same month this year, the inventory had fallen to 400.

The shortage of existing homes for sale has become self-perpetuating. Bill Supple, copublisher of Picket Fence Preview, likens the situation to "a game of musical chairs. People see this rush going on," says the founder of the monthly digest of homes for sale by owners, "and they're reluctant to put their own properties on the market, because they're worried they won't find anything themselves.”

Tightening the squeeze to the popping point is the absence of new housing in both the affordable and mid-priced ranges.

Plenty of homes are being built for the $200,000-and-above market, notes Jenkins. Indeed, she knows of one new home erected on the site of a million-dollar house that the new owner tore down. The purchaser liked the grand vista, but he didn't care for the architecture of the existing house, Jenkins explains.

Similarly, she reports that the Burlington area now boasts at least one 10,000-square-foot home. "And more are on the way.”

Jenkins herself expects to sell $35 million worth of properties this year. Not all of them will be at the current Charlotte average of $350,000; Jenkins brokers deals on many moderate-priced houses as well. But she won't be finding buyers for any newly built homes in that price category, since there are literally none available. No single-family housing construction is under way in the Burlington area that will be affordable to a four-person family earning $50,000 — the median household income in Chittenden County. The cheapest local homes now nearing completion will cost $186,000, Jenkins says.

Surprisingly, however, overall sales prices in the county have increased only about 4 percent in each of the past two years, notes Ron Bouchard. In 1997, the average home sold for $153,675; last year's figure was just short of $160,000.

Bouchard attributes this "decent" rate of inflation to "savvy buyers." Homes that are overpriced "still don't sell," he observes. "Vermonters aren't going to let themselves pay more for something than it's worth." But if current conditions persist, sharper price hikes will become inevitable, he concedes.

It's already tough to find even a conveniently located older home — including ones that need work — in the $159,000- $179,000 range, Jenkins says. "Houses like that are getting to be a rarity. And so the pinch is being felt most by buyers in the middle.”

Stacy Steinmetz and her partner, for example, have been searching for "an older Victorian that we could fix up, that has a backyard, and that isn't completely surrounded by students." Steinmetz, now living in a Colchester duplex, had originally hoped to find something in the $130,000s in the Loomis Street area of Burlington. But she's not seen much that's suitable for even $150,000 or higher.

“The problem is that everyone is looking for the same thing we are," says Steinmetz, who works for Magic Hat Brewery. "And a lot of what's on the market in that area is in pretty bad shape.”

Any Hill Section or South End home not requiring extensive renovations and priced for less than $175,000 will be snapped up almost overnight, local realtors report. "There's a phenomenon of increasing urbanism," observes Andy Broderick, who works for a local nonprofit housing agency. "It seems more and more people want to live within a short distance of downtown.”

Affordable homes in good condition can still be found in parts of Chittenden County, reports Nancy Jenkins. A 1000- square-foot ranch house in the New North End will go for around $125,000, and comparable properties and prices are available in certain sections of South Burlington and Colchester, she says. Larger houses with some land can be purchased for less than $150,000, Jenkins adds — provided buyers are willing to live an hour's driving distance from downtown Burlington.

But even in the closer-in areas mentioned by Jenkins, prices may have started escalating to what are, for many, unreachable heights.

John Bates, owner of Black Horse Fine Arts Supply in Burlington, says he recently looked at a New North End three-bedroom home with a two-car garage. The $135,000 asking price seemed "kind of high for what you'd be getting," says Bates, a renter shopping for his first home.

“It's a confusing and frustrating scene for someone coming into the market," he comments "There's so little available that your choices are very limited.”

For low-income prospective home buyers, the market is more than confusing and frustrating. "It's terrible," according to Kirby Dunn, head of a home-ownership program sponsored by the Burlington Community Land Trust. Last year at this time, Dunn had eight homes available at prices of $100,000 or less; right now, she doesn't have any.

Demand in this sector has also increased significantly. Thanks to record-low mortgage rates offered by the Vermont Housing Finance Agency, a large number of working-class families are able and eager to buy homes and to leave a rental market where prices are also climbing sharply and availability now stands, shockingly, at less than 1 percent.

VHFA provides qualified borrowers with mortgages as low as 6.05 percent — about 2 percentage points below today's commercial rates. A three-person household can take advantage of that opportunity, provided their total income is less than $57,500 and the home they're interested in is selling for no more than $120,000 ($155,000 in the nonexistent case of new construction).

Not surprisingly, VHFA is receiving "a very large number" of applications, says spokeswoman Cathleen Gent. Unfortunately, she adds, "we can get them the money, but we can't get them the house.”

Even if affordable homes were being built, they probably wouldn't be located in Burlington, realtors say. Little land is available in the city for constructing multiunit projects. And in the rare case of a potentially suitable parcel, its neighbors are likely to object vociferously and to delay a development for years, as has occurred with McCauley Square, a proposed 91-unit project on Mansfield Avenue.

If the affordable-housing crunch is to be eased significantly, it will have to happen in the outer suburbs, not in Burlington or Winooski, notes Ron Bouchard. But many of the communities surrounding the urban core "continue to have exclusionary practices," says Burlington Mayor Peter Clavelle.

In order for the housing supply even to begin to catch up with demand, Clavelle and many others argue, regulatory reviews will have to be shortened considerably and made more friendly to developers. Not-in-my-backyard sentiments show no sign of abating, however.

What prospects are there, then, for Burlington-area residents earning the median income or less and seeking comfortable homes?

Slightly promising, suggests Dunn. The market should cool off, she says, now that mortgage rates have risen appreciably and look likely to continue moving upward. "We have to remember that it's cyclical, that what's true of the market today may not be true tomorrow.”

Gerry Milot, a leading local developer, takes a more pessimistic view. Noting that he has been predicting the current squeeze for the past five years, he foresees a steadily worsening situation, due mainly to "the lack of projects now in the pipeline." To stabilize prices at their present level, "we need to build thousands of new homes in the coming years," says Milot, "but very few will actually go up.”

At some point, adds economist Art Woolf, a severe shortage of housing starts to erode an area's overall economy. "It impedes competitiveness," he explains. Companies are unable to recruit skilled workers or managers when home prices in a particular locale far exceed those of a comparable area in a different state, Woolf notes.

The mad scramble for desirable homes at the century's end might one day be seen, therefore, as the chaotic closing act in the Burlington area's boom era.

Building Tension

"Conflicting views, strongly held, sometimes by the same people" often prevent construction of low-and mid-priced homes, says Wayne Senville, chairman of the Burlington Planning Commission. Recognition of the need for more housing regularly collides with the desire to preserve open space, Senville explains, noting that he himself feels torn between these two considerations.

In practice, specific neighborhoods — even those that have demonstrated a social conscience — will usually opt for open space when a developer tries to build a multi-home project in a vacant lot or hay field. Opposition to the influx of several new neighbors regularly becomes so intense that the builder gets hauled into court, delaying the project by moths or years and thus adding costs that will be passed on to home buyers.

That’s what happened a couple of years ago to Gerry Milot, one of the Burlington area’s most active developers.

Working in partnership with the Vermont Housing Finance Agency, Milot sought to build 220 affordable homes off Dorest Street in South Burlington. The 1700-square-foot units were intended to sell for $117,000, but legal challenges to the project made its original conception prohibitively expensive, Milot relates.

VHFA withdrew from the deal as the homes' projected sales prices climbed. Milot finally managed to build the houses, but they're now priced between $150,000 and $200,000 "due to the regulatory process," he says.

Even at that level, however, "they're going fast.”

Typically, Milot notes, "it will take two to four years" for a proposed multiunit development to reach completion, "depending on whether the developer is opposed. And it's very likely, anywhere in Chittenden County, to receive opposition from neighbors.”

Vermont is one of the few states that allows court challenges of proposed projects that have been reviewed and acted upon by local planning commissions, Senville observes. In Burlington, he says, "you've got a situation where with every major project, whoever loses before the Planning Commission is going to go to court.”

Senville acknowledges that such protracted battles can make it too expensive for developers to build affordable housing. At the same time, he expresses empathy for "the hundreds of people who show up at public hearings to make their voices heard." They have a right to be concerned about a project that may significantly alter the character of their community, Senville says.

State and local permitting processes are also identified by builders and their political allies as huge impediments to building homes for average-income Vermonters.

“There's lots of duplication, with both the state and towns conducting environmental reviews,” complains Ron Bouchard, president of the Northwest Vermont Board of Realtors. Developers must pay for extensive engineering work in order to obtain “the myriad permits” required for a housing development, Bouchard says.

Milot estimates that a builder has to spend around $250,000 for various land and water studies just to initiate the permitting process.

Towns and cities in Chittenden County force developers to enter a regulatory maze from which they may never emerge, adds Peter Richardson, president of Housing Vermont. “The labyrinthine process of getting to the building phase” involves frequent shuffling between the local planning and zoning offices, says the head of the nonprofit agency specializing in development of multi-family rental projects.

In other states where he has worked, Richardson says, “one of those two offices is dominant and you can focus your efforts there. Here, though, you have to go back and forth, back and forth.”

Taking a seemingly heretical stance, Progressive Burlington Mayor Peter Clavelle agrees that the housing permitting process can be needlessly and prohibitively expensive for developers. Bureaucratic entanglements require builders to make “a very substantial outlay of money at the front end while also intensifying the element of risk for them,” says Clavelle. As a result, “small developers are becoming extinct.”

Could Burlington itself do more to encourage construction of affordable housing? “Absolutely,” the mayor replies. He notes that Vermont law now allows planning, zoning and design review functions to be combined in a single local entity. Burlington should give consideration to creating such a Development Review Board, Clavelle says.

So fundamental an overhaul of local government structures could probably not occur without voter approval, however. And residents fearful of potential large-scale housing development in their neighborhoods would likely campaign to prevent any streamlining seen as beneficial to builders.