Tony Walton’s Full Article (Unedited)
Six days ago, the United States and Israel launched major combat operations against Iran. As of this morning, the Strait of Hormuz — the 21-mile chokepoint through which roughly 20% of the world’s oil transits — is now a geopolitical grenade with the pin sitting at an uncomfortable angle.
This is not a drill.
So what does a war in the Persian Gulf mean for the price of a farmhouse in Washington County? More than you’d think. And differently than the headlines suggest.
Key Takeaways
For Buyers, Sellers, and Anyone On the Fence
This analysis gives Vermont buyers, sellers, and spring-market decision-makers clear-eyed context — not media noise — to act with confidence right now. It maps three distinct scenarios so you can locate your position and move accordingly.
If You Only Remember 3 Things
- The Iran conflict has already reversed mortgage rates upward — timing your next move now matters more than waiting for clarity that may not come.
- Vermont’s buyer base — remote workers, second-home seekers, equity-rich relocators — tends to accelerate toward Vermont during national instability, not away from it.
- Inventory is up year-over-year, but supply remains tight: Vermont is still a seller-aligned market, and that structural reality does not change with headline risk.
Quick Facts
- Mortgage rates moved from a 3.5-year low of 5.98% to above 6.12% within 48 hours of the Iran strikes.
- Vermont single-family median price: approximately $435,000, up roughly 5% year-over-year.
- Active listings are up 33.6% year-over-year, but months of supply sits at 2.9 — well below a balanced market threshold.
The Macro: Ugly, But Complicated
Let’s start with the numbers that matter.
Mortgage rates were flirting with 5.98% last week — a three-and-a-half year low. That window slammed shut the moment the first strike landed. Rates jumped 13 basis points overnight, back above 6.12%. Barclays is telling clients Brent crude could test $100 a barrel. The S&P 500 has already vaporized $3.2 trillion in market value. Inflation expectations — which the Fed had spent two years carefully taming — are reigniting.
The mechanism is straightforward: oil up → transportation and production costs up → inflation fears revive → bond yields spike → mortgage rates follow. What was shaping up to be the best spring buying season in three years just got a wrench thrown through its windshield.
There’s a darker scenario. If Iran manages to disrupt Strait of Hormuz shipping — even temporarily — analysts are calling it a “guaranteed global recession.” That’s not hyperbole from a Twitter economist. That’s from people who run sovereign risk models for a living.
Here’s the tension: war is simultaneously inflationary and recessionary. It raises prices AND destroys demand. That combination — stagflation — is the one scenario where nobody wins, including the Fed, which would face a lose-lose choice between cutting rates to save the economy or holding them to fight inflation.
Now. Here’s Where Vermont Gets Interesting.
Vermont is not Dubai. We are not a financial hub. We don’t have an embassy that can be rocketed. What we have is something increasingly rare in an anxious world: land, community, and quiet.
Let me walk you through three plausible scenarios for our market this spring and summer.
Scenario One: The Freeze 🧊
Probability: Moderate
Uncertainty is a buyer’s enemy. When people don’t know whether their portfolio will be down 20% by June, they don’t sign purchase and sale agreements. The rate spike alone could sideline thousands of qualified buyers nationally. Locally, our entry-level inventory — already a source of chronic pain for first-time Vermont buyers — gets even further out of reach. Oil at $100/barrel doesn’t just hurt at the pump; it hammers heating fuel costs for a state that still runs heavily on propane and heating oil. Construction costs climb. New inventory stalls. The spring market goes quieter than anticipated.
This is the scenario where sellers hold, buyers hesitate, and the phone rings less. It’s real. We shouldn’t pretend it isn’t.
Scenario Two: The Safe Haven Surge 🏡
Probability: Also Real — and Underappreciated
Here’s what the national real estate commentary is missing: instability has historically been a tailwind for Vermont, not a headwind.
Post-9/11. Post-2008. The early COVID years. Each wave of national anxiety produced a corresponding wave of urban flight toward places that felt — and were — safer, saner, and more human-scaled. That pattern is already embedded in our 2026 market. Remote workers, second-home buyers, equity-rich retirees leaving Boston, New York, and D.C. — these are our buyers. And they don’t stop wanting to move to Vermont because the Middle East is on fire. They accelerate.
Geopolitical uncertainty globally is already accelerating what analysts are calling a “safe-haven property shift” — buyers prioritizing political stability, land, and quality of life over proximity to financial centers.
Vermont — with its median single-family price of ~$435,000, its intact community infrastructure, its schools, its forests, and its relative insulation from geopolitical violence — starts to look less like a lifestyle choice and more like a strategic asset allocation decision. Hard assets. Real land. Resilient community. That’s not a vacation home pitch. That’s a wealth preservation argument, and it resonates with exactly the buyer demographic that drives our market.
Our inventory is up 33.6% year-over-year — more options, less hysteria. But “more options” in Vermont still means 2.9 months of supply. That is not a buyer’s market. That is a disciplined seller’s market with better manners.
Scenario Three: The Whipsaw 🎢
Probability: Higher Than Anyone Admits
War-driven rate increases have a history of reversing fast when the economic damage becomes undeniable. The Fed — already walking a tightrope — could be forced to cut aggressively if recession signals start flashing red. The 10-year Treasury was at a multi-month low of 3.92% the day before the strikes. That tells you where the underlying economic trajectory was pointed before the bombs fell.
If this conflict de-escalates in weeks rather than months — a very real possibility, given Trump’s stated preference for a “quick” war and the Senate’s pushback — we could see rates fall back below 6% by late spring. That would trigger a release of pent-up demand that makes the spring market ferocious. Buyers who are sitting on the sidelines right now, waiting for clarity, would come rushing back simultaneously. Low inventory + sudden demand surge = exactly the kind of competitive market that produces multiple offers and above-list sales prices.
The whipsaw is the scenario where the people who waited for certainty missed the window. Again.
The Vermont-Specific Bottom Line
If you’re a seller: Your equity is real, your market position is strong, and the demographic wave driving Vermont demand doesn’t reverse because of geopolitical turbulence — it deepens it. Price right. Show well. Move now, before the macro gets worse or the window narrows.
If you’re a buyer: Yes, rates are back above 6%. Yes, the headlines are ugly. But you are not buying a stock. You are buying land in one of the most stable, community-rich, naturally beautiful states in America. Vermont real estate has not crashed. It has not cratered during any major crisis in living memory. The people who “waited for things to calm down” after COVID paid 40% more when they finally bought. Date the rate. Marry the house.
If you’re on the fence: That fence just got more expensive. Every week of uncertainty that drives oil higher, inflation higher, and rates higher is a week that costs you real money in carrying costs and purchasing power. Clarity is not coming fast. The Senate is fighting over war powers. Boots may or may not be on the ground. The Strait of Hormuz may or may not close. Nobody knows. What you do know is that the house on the hill in Waterbury isn’t getting cheaper, and the people who want to live next to you aren’t going away.
One More Thing
Vermont, historically, has been a place people run toward when the world gets loud. We are not immune to macroeconomic forces. Heating oil prices matter here more than almost anywhere in the continental US. A full-blown recession would slow our market. We don’t pretend otherwise.
But there’s something durable about this place — its character, its community, its relationship to the land — that shows up in the data every single time the world decides to lose its mind. Vermont holds. Sometimes it even quietly appreciates while everyone else panics.
That’s not spin. That’s thirty years of watching this market breathe.
Sources
- Reuters — “Iran war poses new risk to US economic resilience”
- Realtor.com — “Iran Conflict Sends Oil Prices Up in Troubling Sign for Mortgage Rates”
- Yahoo Finance — “The war in Iran could lead to a ‘guaranteed global recession’”
- CNBC — “Mortgage rates jump sharply higher after Iran strikes”
- Polarius International Real Estate / Vents Magazine — “Global Geopolitical Uncertainty Accelerates Shift Toward Safe-Haven Property Markets”
- Lake Champlain Real Estate — “January 2026 Northwest Vermont Real Estate Market Update”
- New England Landmark Realty — “Vermont Home Prices + Inventory Both Rise”
- HousingWire — “Will war with Iran send mortgage rates higher or lower?”
- NPR — “Oil prices surge, but no panic yet, as Iran war continues”
- Al Jazeera — “Iran live news: Iran death toll at 1,045”
Ready to Talk Vermont Real Estate?
Whether you’re weighing a sale, watching from the sidelines, or ready to make your move — Tony Walton and the New England Landmark Realty team are here for a straight-shooting conversation about your position in this market.
