Happy fall to one and all! After the delayed return of warmer weather from a non-existent spring on-Island, the summer was near idyllic, and the usual seasonal events delivered plenty of enjoyment to its patrons. And while the typical spring market real estate activities began haphazardly courtesy of Mother Nature, it gained steam as we migrated into summer and we have been active in the field with clients ever since. And we expect that a productive fall market will continue to unfold before us.
Despite the continued geo-political and macro-economic issues in the world today, prudent investment decisions and lifestyle choices remain overriding considerations among buyers of Martha’s Vineyard real estate. With relative value, choice, and finance packages still available, we anticipate continued search and acquisition activity through year-end before the quieter winter months arrive.
It should be noted that the confluence of events that has enabled Martha’s Vineyard to maintain market traction this year has begun to further replicate conditions found among many primary markets, which is largely a supply issue. While inventory on-Island exists across the full market spectrum, we have seen more dramatically this year most concentrated activities being placed toward the $500K-$1M price segments. For our micro-market, this is also the most economical price range for many second home buyers. But the risk of creeping interest rates, increased market absorption of single family homes over the past four years, coupled with lower levels of inventory replenishment have presented new challenges for buyers of Martha’s Vineyard real estate; notably in selection, location, condition, and price. And since many acquisitions made on-Island are for the longer-term, family “legacy” type ownership, this implies that some properties or locations may not become available again for many years. Therefore, and for the aforementioned reasons, levels of available inventory will continue to contract, especially in the entry to mid segment areas of our market.
After closing a healthy 2017 selling season, and given the continued degree of activity that we have experienced year to date, consumption of properties realized from a finite “island market” will create competition for available listings. In the sub-million dollar market segments, the contracting inventory is creating more competition among prospective buyers but also increased sales prices.
In contrast, the market condition above the “conversational” $1M threshold is noticeably different. There are fewer capable or willing buyers comparatively, there is more inventory to choose from, but location, amenities, and condition have proven to be more significant and subjective drivers in the acquisition process for this cadre of prospective buyers.
Please consider the following;
- Year to date 312 residential properties have sold on Martha’s Vineyard, which is down 4.5% from the 327 sold for the same period in 2017.
- Q3 alone conveyed 96 residential properties, down 9.4% from the 106 sold in 2017 for the same period.
- The total number of all property types listed for sale has continued to contract since 2014 when there were approximately 750 units then offered. Currently, there are 569 active listings representing $1.364B of listed real estate on-Island.
- At the Quarter’s close, year-over-year median home sale prices decreased 0.5% from $763,000 to $759,000 with average home sales prices also decreasing by 1.5% from $1,235,000 to $1,216,000 for the period. These metrics speak to the change in price segment participation this season from last year of those properties sold.
- On average, year to date home sales on-Island have transacted at approximately 96% of their asking price while realizing 127% of their tax assessment. This correlation suggests that property sale prices exceeding the respective tax assessment have continued to trend more broadly throughout our micro-market, but still remain subject to the attributes of condition, location, utility, scarcity, and uniqueness.
Third Quarter sales statistics courtesy of LINK
Acquiring real estate in this largely second-home market is often a discretionary decision. Yet given the consistent consumer demand, the low interest rate climate, and ability to garner both emotional and financial returns from an investment made here, it still remains one of the most attractive times to acquire Island real estate. There will come a time, and likely now sooner than later when this degree of opportunity will become out of reach for some. But Martha’s Vineyard, compared to many like markets, continues to afford an attractive opportunity for those willing to make a commitment to her.
Acquiring real estate in this largely second-home market is often a discretionary decision. Yet given the consumer demand, relatively low interest rate climate, and ability to garner both emotional and financial returns from an investment made on-Island, it still remains an attractive time to acquire Island real estate. There will come a time, and likely now sooner than later when this degree of opportunity will become out of reach for some. But Martha’s Vineyard, compared to many like markets, continues to afford an attractive opportunity for those willing to make a commitment to her.
Please visit www.mvlandmarks.com to view a comprehensive list of all available Island listings. And as always, do not hesitate to contact us with your questions and curiosities concerning those properties of interest and Martha’s Vineyard real estate topics in general.
If a purchase of Island real estate is not in your future right now, this is an opportune time to book your summer vacation rental for 2019. Our Island-wide inventory features homes that accommodate most every need, but competition for the best properties and available weeks has markedly increased. Our experienced rental agents are readily available to assist you in finding the perfect vacation home. Please do not delay, contact us now to assist you in creating your dream vacation!