Newsletters
Greetings from Martha’s Vineyard and Happy Holidays to all! Although the year is not quite through, it seems timely enough to share with you some relevant information concerning Martha’s Vineyard real estate before the events of the holiday season get fully underway.
Without question, 2009 has been one of the most challenging and tumultuous in many years. If it wasn’t the weather, it was the economy, and visa versa the whole year through. Despite the slow start and virtual non-existence of a traditional Spring market, the summer brought a healthy volume of vacation rentals and plenty of prospective Buyers visiting properties to explore what extra-ordinary opportunities were available to them. 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.
As you might imagine, everyone these days is asking us what the condition of the Island market is and which way it may be headed. With a wild year of experience now under our belt, continued global concerns and the New Year just around the corner, these queries are even more prominent. 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 two years now, but are still nearly double periods of “normal” inventory levels. Conversely, the number of home sales through November has averaged 20 per month, which is up 6.5% over the same period of 2008 sales. However, with supply exceeding demand by such a wide margin, days on market have increased and selling prices have declined on average by 18.6%. Our median and average home prices have adjusted downward from $650,000 to $560,000 and from $1,195,000, to $975,000 respectively comparing year to date November 2008 to 2009.
- Most commentators do not see a significant turnaround in the national real estate market during 2010, although there are some reasons for guarded optimism that signs of improvement may start to appear by mid-year if interest rates continue to remain low, credit availability loosens up and government stimulus initiatives continue. But improvement will likely be found only in select markets subject to regional economic conditions.
- 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 has been established since May, 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 of time 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.
- 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 this market’s correction, but more importantly the volume of transactions that were consummated this year. 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 have remained exceptionally attractive and are expected to remain so for the foreseeable future. Recently, the interest rate on a 30-year fixed rate loan was approximately 4.71%. Mortgages are available for qualified borrowers even though underwriting standards have tightened across the spectrum of loans. In addition, the Vineyard was re-categorized 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 will continue 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.
Our expectation for 2010, barring another catastrophic event in the financial and banking sectors, will feature a relatively flat real estate market on Martha’s Vineyard with modest improvement as the year progresses, much like what 2009 has demonstrated. 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 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 2009 year-to-date through November, island-wide market statistics from LINK, the Island's MLS.
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