Newsletters

Greetings from Martha’s Vineyard and happy spring to all! The buds are finally popping, bunnies and deer are hopping, the grass is again growing, and stores are re-opening after a cold winter on-island.  But rest assured, the warmer temperatures of summer are just around the corner!

Without question, 2009 was one of the most challenging and tumultuous in many years.  After the previously documented slow start and meanderings of summer, the fourth quarter and start to 2010 have been bustling with action thus far.  We have been busy during these “off-season” months showing property and participating in sales transactions, in spite of the typical New England weather pattern and macro-economic concerns.  Even the seasonal weekly vacation rental business continues to percolate where tenants eager to lock in their vacation accommodations have enjoyed the fruits of conducting early searches and securing leases for the coming summer.  For the prospective Buyer visiting properties to explore what extra-ordinary opportunities are available to them, their general expectation and effort continues to offer cautious optimism for the 2010 season.  This activity level continues and once again seems to validate the observation that, regardless of economic conditions, there are always Buyers and Sellers who have a need for our services on-island.

As you might imagine, anyone interested in Vineyard real estate is eager to understand the dynamics of our micro-market and learn where a “deal” can be had.  Clearly vacation, second home markets behave differently than primary markets, and the insular variables of being an island must be acknowledged when evaluating any island real estate opportunity.  However, now that the first quarter of 2010 is in the books, here are some facts, observations, and opinions that may help you to formulate your own point of view.
* Some aspects of the Vineyard real estate market appear to have stabilized, while others remain in transition.  The number of properties for sale have remained relatively constant (685-740) for the past year, but are still nearly double periods of “normal” inventory levels. Conversely, the number of home sales through March has averaged 24 per month, which for the quarter equates to an increase of some 87% over the same period of 2009 sales!  However, with supply exceeding demand by such a wide margin, days on market have consistently increased to nearly a year and average selling prices have declined on average by 12.0% YTD.  While our median home prices have adjusted upward from $567,000 to $615,000, the average prices are down from $1,273,000, to $1,121,000 for the same period of sales year over year.
* Most commentators do not see a significant turnaround in the national real estate market until 2012, although there are some reasons for guarded optimism, especially if interest rates continue to remain low, credit availability finally loosens up and government stimulus initiatives continue.  But improvement will likely be found only in select markets subject to regional economic conditions.  Thus far, New England as a region has fared better than most during the economic recovery.
* Real estate is a cyclical business and with the market decline starting in 2006, we are now beginning the fifth year of a Buyer's Market on Martha’s Vineyard.  The market’s general correction and relative price stability that was established in October 2009, suggests that we may have found a bottom.  Since last fall there have been pockets of activity in select areas on-island, much like a brushfire behaves, whereby multiple bids, and short days on market have continued to occur. If this hypothesis is true, then it seems reasonable to anticipate that the market will now trend along comfortably for a period of time before it once again more broadly heads upward.  The Island is, after all, a finite resource having both geographic and economic barriers to entry which effectively enables this behavior to exist.
* Even after an anxious 2009, there continues to be a tremendous amount of pent-up demand to own property on the Vineyard as exhibited by the amount of web traffic we receive, the number of Buyer clients we have continued to consult with during their off-season visits, but more importantly by the volume of transactions that were consummated in 2009 which were up 14% over 2008.  Buyers who “missed” the last bull market commencing in the 1990’s, but have remained patient these last few years, can expect to be well rewarded. In addition, many investors have now recouped much of their losses from the stock market and some of this money will be redeployed for diversification purposes by making its way into resort real estate purchases.
* Interest rates continue to remain exceptionally attractive and are anticipated to remain so for the foreseeable future.  Recently, the interest rate on a 30-year fixed rate loan was approximately 4.5%-5.46%. Mortgages are still available for qualified borrowers even though underwriting standards have tightened.  The Vineyard is still regarded by the FHA as a “high priced” market and therefore was granted lending relief with an increased conventional loan limit up to $625,500, which appears to continue well into 2010.
* The situation concerning distressed properties is still difficult to assess.  On the one hand there are very convincing statistics that show there are a record number of adjustable rate mortgages and exotic loans scheduled to have interest rate resets between now and 2011. On the other hand, government leaders and private lenders seem to be making efforts to keep homeowners out of foreclosure.  Should the economy falter even further, then perhaps all bets are off.  However, the segment of distressed property found within the Vineyard market has continued to remain very narrow comparative to the overall inventory level and is not expected to fundamentally change.
Our expectation for 2010, barring another catastrophic event in the financial markets, will feature a modestly improving real estate market on Martha’s Vineyard with more consistency than occurred in 2009.  Yet one thing is certain, for those individuals who perform their due diligence, work with an experienced Realtor, and can see past the fear, doubt, and uncertainty of current conditions, it still continues to be a great time to be a Buyer on Martha’s Vineyard! 
Please visit www.mvlandmarks.com to view a comprehensive list of all available Island listings.  And as always, do not hesitate to contact me with your questions concerning properties of interest, and Martha’s Vineyard real estate issues in general. 
Summer will be returning to the Vineyard, might YOU be coming to your Island home? 
If, however, a purchase of Island property is not in your future right now, there is still time to book your summer vacation rental.  Our inventory continues to grow featuring homes that accommodate most every need, and represent every corner of the Island.  Our experienced rental agents are readily available to assist you toward finding the perfect vacation home.  Please contact us to assist you with creating your dream vacation. .
Attached for your reference are the 2010 year-to-date through March, island-wide market statistics from LINK, the Island's MLS.
 
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