Newsletters

Greetings from Martha’s Vineyard, and a happy belated New Year to one and all!  Now that the holidays are over and the island has slipped into its tranquil winter mode, we feel it is both appropriate and timely to share with you our version of “The Year in Review” concerning Martha’s Vineyard Real Estate.
 
It is always surprising to us that with so few people on the island, the winter months are still a busy time of the year for our real estate business. This pattern of activity seems to validate the observation that, regardless of economic conditions, there are always Buyers and Sellers who have a need for our services.
 
As you might imagine, everyone these days is asking us which way the Island real estate market is headed, and what 2009 may hold in store.  Unfortunately, crystal balls are hard to come by.  The answer to these questions in some cases depends on whose opinion you choose to believe. 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 has remained relatively constant (700-800) for over a year, but is 100% or more above periods of “normal” inventory levels. Conversely, the number of total sales averaged 26 per month, down from 31 for the same period in '07.  With supply exceeding demand by such a wide margin, days on market have increased and selling prices have declined on average by 16%.  Our median and average home prices have adjusted downward from $750,000 to $649,000 and from $1,429,000 to $1,194,000, year-end 2007 to year-end 2008 respectively.
• Most commentators do not see a significant turnaround in the national real estate market during 2009, although there are some reasons for guarded optimism that signs of improvement may start to appear later this year if interest rates continue to decline and credit availability loosens up.
• Real estate is a cyclical business and with the market decline starting in 2006, we are now beginning the fourth year of a Buyer's Market on Martha’s Vineyard.  The market’s general correction and relative price stability that has been established since September, suggests that if we haven’t bottomed already, we may be nearing the bottom. If this hypothesis is true, then it seems reasonable to anticipate that the market will trend along this found support for a period before it once again 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.
• Clearly, there appears 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 and the number of Buyer clients we have continued to consult with during this market’s correction.  Buyers who “missed” the last bull market commencing in the 1990’s, but have remained patient these last few years stand to be well rewarded.  In addition, there are reports that indicate there are between $3.5 trillion and $4.0 trillion in money market funds sitting on the sidelines at this time. One estimate even suggested the amount exceeds $7 trillion!  Certainly, some of this money will make its way into resort real estate purchases.
•  Interest rates have declined to exceptionally attractive levels.  Recently, the interest rate on a 30-year fixed rate loan was approximately 4.875%, and it appears that rates may be headed even lower. Mortgages are available for qualified borrowers even though underwriting standards have tightened across the spectrum of loans.  In addition, the Vineyard has been categorized by the FHA as a “high priced” market and therefore has been granted lending relief with an increased conventional loan limit up to $625,500 for 2009.
• The situation concerning distressed properties is 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 every effort 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.

Our expectation is that 2009 will feature a relatively flat real estate market on Martha’s Vineyard with modest improvement as the year progresses.  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 is a great time to be a Buyer on Martha’s Vineyard! 

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.  Please contact us to assist you with creating your dream vacation.  Our experienced rental agents are readily available to assist you toward finding the perfect vacation home.

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 is coming to the Vineyard, might YOU be coming to your Island home?

Attached for your reference are the 2008 year end island-wide market statistics from LINK, the Island's MLS.