Happy Spring to one and all. Now that the First Quarter of 2017 has closed, let’s examine the real estate activity on-Island thus far and allow us to offer our comments for your consideration.
Aside from a couple of ‘normal’ snow events, the winter was relatively mild, but also has held on for longer than most would’ve liked. However, since the holidays, our weekends have been bustling with early season real estate activities. This confirms for us that the positive sentiment realized from the fall toward vacation/second home acquisition still abounds. And given the calendar, with the arrival of the traditional spring market, we anticipate having more busy weekends in the field with prospective buyers pursuing acquisition activities toward finding an Island property before summer.
Continuing with the strong market dynamics of last year, many of the same variables we espoused during the past three seasons continue to exist here in early 2017, but perhaps with a greater sense of urgency or significance. For several years now, the Vineyard market has meandered along in a “not too hot, not too cold” type behavior regarding the annual volume and realized prices of sold properties. However, while attractive mortgage options are still available, they are becoming more sensitive to interest rate increases. And as the inventory increases from the off-season lows, the amount of new units may be tapered in number given the voluminous turnover we’ve already experienced during the past several years from this finite market of properties.
The median price on-Island has established the “sweet spot” for sales transactions during the first quarter. By far, this is the most active segment of the market and therefore has depleted much of the available inventory. And while the higher price segments offer many options within each of the Island towns, pricing is critical even in an active market. “Blue-sky” pricing of a decade ago is not proving to be as effective a strategy in attracting buyers given our current market condition. (Quarterly statistics courtesy of LINK)
The National Association of Realtors (NAR) reported that existing nationwide sales in 2016 were the best in a decade but that current housing inventory is the lowest in the country since 1999. Their chief economist, Lawrence Yun, suggested that the expanding pool of buyers nationwide amidst a dwindling number of available properties has led to a tighter supply and therefore increased sale prices, but buyers are demonstrating caution in chasing properties for fear of over-paying, a lingering stigma from 2005. With the spring market now upon us, it remains to be seen if the Vineyard will feel similar correlating effects after the strong transaction volume we conveyed in 2016. But for prospective buyers of the island, it is important to recognize that the Vineyard has begun to “normalize” and emulate many of these same competing characteristics found off-island. With high interest and increased demand for Island real estate but lower levels of available inventory to consume, buyers should expect to see higher market prices this year.
Here are the more meaningful statistics to consider from the activity realized during the First Quarter of 2017:
Current inventory for the first time in years is below winter holiday levels, which is often the most quite period of the year. Last year at this time, there were 475 total listed units. As of this writing, there are 451. As aforementioned, there likely will be an influx of listings forthcoming to participate in the “spring market”, once the warmer weather firmly arrives. But there is a marked change in the complexion, volume, and pricing of properties found within the segments of our marketplace. Therefore, prospective buyers will need to remain vigilant this spring and keep their eyes peeled for new supply coming to market, and be equally prepared to act promptly.
A total of 89 residential properties were sold among the Island towns within the First Quarter this year, which is 10% more than were sold a year ago. Specifically, home sales were found as follows: Edgartown-19, Oak Bluffs-30, Vineyard Haven-16, West Tisbury-14, Chilmark-9, and Aquinnah-1.
Median sales prices on-Island for Q1 increased 11% from $683,729 to $759,000 compared to the same period in 2016, while average prices increased by 14% from $1.133M to $1.292M during the same period.
On average, residential property sales thus far have captured 96% of their final asking prices and garnered 126% of their respective tax assessments. However, the strength of this correlation remains highly subject to factors such as condition, amenity, scarcity and uniqueness of the subject properties sold.
As an independent franchise that is associated with a national brand, we are often introduced to proprietary market analysis and industry trends. We’ve thus learned that resort-vacation-destination markets like Martha’s Vineyard have continued to enjoy consistent attention and acquisition, but also significant heightened competition for these desirable properties. So for those who have vested themselves in the search for Island real estate, 2017 may again afford the opportunity to make the commitment toward acquiring an Island property. But preparation and timing are becoming important variables. And for current home owners to consider, because the better conditioned and more realistically priced inventory has been consumed in 2016, this year could prove to be an opportune time to list and successfully sell your Island property given the steady demand. Please contact us to discuss performing a market analysis and Broker Opinion of Value for your property. With over 30 years of market experience, we are able to counsel our clients well.