LANDMARKS REAL ESTATE
2015 Year in Review
Sean D. Federowicz, M.B.A.
Owner, Broker, Realtor
Greetings and a happy belated New Year to one and all! As has become customary, we offer you our annual installment of “The Year in Review” regarding Martha’s Vineyard Real Estate.
It appears that 2015 was the watershed year for the real estate recovery to finally take hold on-Island. It has been a long six years of meandering since the depths of the real estate recession in 2009. However, a confluence of events in 2015 contributed to a very strong year for sales.
Despite the non-existent “spring market” due to the interminable amount of snow the Island received and the late arrival of warm weather, Mother Nature did provide us with another terrific summer. Let’s hope for a milder weather pattern in early 2016 to facilitate the continued real estate activities in the New Year!
A significant cadre of prospective buyers have been biding their time since 2006 -- the height of real estate sales on Martha’s Vineyard. These folks have kept their “powder dry” through the recession, have become more aware of the nuances associated with Island ownership, and stayed informed of inventory changes and sales trends. Many parties re-entered the market this past year and finally made their purchases. The balance of these prospective buyers is still on the sidelines, waiting for the “perfect property” or “perfect time” to commit.
The irony is that these very same folks may risk missing out (again) on a terrific buying opportunity as the Vineyard market continues to demonstrate improved strength. If the weather cooperates, we anticipate the new year getting off to an early and strong start before the customary “spring market” and the arrival of warmer months.
Here are some facts, observations, and opinions that may help you formulate your own point of view regarding the state of Martha’s Vineyard real estate.
- Nationwide sentiment toward real estate has improved, especially among second home seekers in vacation/destination markets like Martha’s Vineyard, as investments made within these segments are for both lifestyle and financial purposes.
- Reinforcing the good feeling is the continued relative low interest rate climate. However, the near-term trajectory of lending rates appears to be heading upward with the recent policy actions from the Federal Reserve Bank.
- The 4th Quarter realized a significant volume of residential sales on-Island (141) exceeding Q1 (86), Q2 (89) and Q3 (128). Our “Fall Market” has become stronger than the customary “Spring Market”. Note that the total number of properties for sale has decreased significantly from the seasonal high of approximately 650 in August to 502 at this writing. Arguably, the Vineyard market still has excess inventory. But with the supply of “quality” units falling, prices can more readily increase. This could also be a cue for potential sellers to enter the market with new listings in spring, if not sooner. Please contact us to discuss the salability of your own property.
- In 2015, total residential sales increased by 10.1% closing the year at 444 units sold versus the 403 transacted in 2014. Median home sale prices on-Island increased by 8.3% from $600,000 to $650,000. Average home prices jumped 23.5% from $1,016,000 to $1,255,000.
- Notably, residential sales on-Island continued to be realized across all price segments, inclusive of the high-value niche. Sales prices averaged approximately 95% of their asking price, but nearly 124% of their tax assessment. This break in correlation between assessed value and sales price has continued since the end of 2012. It confirms that a return to “normalcy” is well underway on Martha’s Vineyard.
- For the year, Island towns transacted the following number of residential properties; Edgartown-172, Oak Bluffs-107, Vineyard Haven-85, West Tisbury-41, Chilmark-29, and Aquinnah-10.
- The Island is a finite commodity having both geographic and economic barriers of entry that promote various price supports not typically found in many primary real estate markets.
- As desirable inventory is pared down, prices will continue to adjust upward as a function of supply and demand. It is not surprising that the better priced, better conditioned properties are continuing to go under contract more quickly than their respective competition.
- Our successful 2015 clients, buyers and sellers alike, have these best practices in common: Identify your wants and needs, learn the market, develop reasonable expectations, perform your due diligence, and “be prepared to act”. This micro-market has returned to a more competitive and urgent dynamic.
It is our expectation that in 2016, Martha’s Vineyard will catch up to the robust trends found within many primary markets. We expect the increase in search activity to continue, especially from those who have long watched from the sidelines and may now fear “missing out” on capturing their dream of Island ownership.
As the economy continues to stabilize, the absorption rate for Island property will also continue to increase, resulting in sales price increases as supply decreases. Lastly, with mortgage interest rates now rising, this factor may also provide some incentive for prospective buyers to act sooner rather than later. This will add to the increased competitive dynamic for real estate acquisition.
Certainly anything can happen during the year, of course, and the Island’s resilience as a discretionary market of desire will be tested. However, for those individuals who perform their due diligence, work with an experienced Realtor, and are ready to take action, it still remains a great time to be a Buyer of Martha’s Vineyard real estate!
If a purchase of an Island property is not in your future right now, there is still time to book your 2016 summer vacation rental. Our inventory continues to grow featuring homes that accommodate most every need and represent every corner of the Island. But availability for best properties and weeks is waning. Please contact us to assist you in creating your dream vacation.
As always, do not hesitate to contact us with your questions concerning properties of interest, and Martha’s Vineyard real estate concerns in general.
Summer is coming to the Vineyard, might YOU be coming to your Island home???