Greetings from Martha’s Vineyard! Now that the First Quarter of 2019 has closed, please allow us to examine the real estate activity on-Island thus far and to offer our comments for your consideration.
Since the holidays, the winter weather was unusually mild for the south coast of New England and contributed to some quick and successful transactions. Since the turn of the New Year, our weekends have been busier than customary with the buzz of an early “Spring Market” taking hold and the arrival of prospective buyers pursuing acquisition activities with the hope of finding an Island property before summer.
Continuing the strong market dynamics of last year, many of the same variables we espoused during the past four seasons continue to exist here in early 2019, but perhaps with a greater sense of urgency and significance. For several years now, the Vineyard market has meandered along in a “not too hot, not too cold” type behavior regarding annual sales volume and the realized prices of sold properties. However, being a finite housing market that avoids excessive development, the level of replenishment inventory often lags market demand and is more often the result of “life events” such as death, divorce, or lack of use whereas transactions attributed to new housing developments, job relocation, migration to better school systems, or shorter commuting times are often drivers within the off-Island housing markets. Therefore, sales prices are highly sensitive to more specific and subjective supply variables on-Island comparatively.
We have spoken in the past about the consumption volume of single family homes on-Island, posting over 400 units sold annually for the past four years. And while our spring market will feature both the reactivation of previous listings that went off-market for the winter months as well as new properties to participate in the spring inventory, the robust number of sales transactions without a correlating replenishment of inventory has begun to put pressure on the pricing of available, albeit lower supply.
Much as the closing months of 2018 has demonstrated, the First Quarter median and average sales price on-Island are directly correlated with the characteristics found within the current inventory. By far, the most active segment of the market is below $1.5M and therefore continues to increase competition for whatever available inventory among active buyers. And while the higher price segments offer many options, pricing within those segments remains critical even within an active market. “Blue-sky” pricing of a decade ago is not proving to be as effective a strategy in attracting buyers given our unfolding market condition.
The National Association of Realtors (NAR) recently expressed that the housing market continues to undergo a transition but reiterated that existing nationwide sales have continued in an upward trajectory, albeit with tapered enthusiasm as available housing inventory continues to contract. 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. Last year, we did not see the immediate effects of this general market dynamic on-Island. However, with another spring market now upon us, these correlating effects appear to be taking hold here too.
For prospective buyers of Island real estate, it is important to recognize that the Vineyard continues to “normalize” and is emulating many of these same competing characteristics found off-Island. With high interest and increased demand, but lower levels of available inventory to consume, buyers should expect to again see higher market prices this year.
Here are the more meaningful statistics from activity realized during the First Quarter of 2019.
Quarterly Statistics Courtesy of LINK
Current inventory for several consecutive years is below winter holiday levels, which is often the most quiet period of the year. Last year at this time, there were 406 total listed units. As of this writing, there are 393. As aforementioned, there likely will be an influx of listings forthcoming to participate in the “spring market”. But there is a marked change in the complexion, volume, and pricing of properties found within the various segments of our micro-market. Therefore, prospective buyers will need to remain vigilant this spring for new opportunities coming to market, and be equally prepared to act promptly.
A total of 55 residential properties were sold among the Island towns within the First Quarter this year, which is 38% less than were sold a year ago. Specifically, home sales were found as follows: Aquinnah-2, Chilmark-5, Edgartown-13, Oak Bluffs-15, Vineyard Haven-13, West Tisbury-7.
Median sales prices on-Island for Q1 increased 28% from $745,000 to $950,000 compared to the same period in 2018, while average prices soared 90% from $1.105M to $2.099M during the same period.
On average, residential property sales thus far have captured 95% of their final asking prices and garnered 125% 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 independently owned 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 continue to enjoy consistent attention and acquisition, but also with significant and heightened competition for these desirable properties. So for those who have vested themselves in the search for Vineyard real estate, 2019 may again afford the opportunity to make the commitment toward acquiring an Island property. But preparation, education, and timing have become important variables.
And for current homeowners to consider, because the better conditioned and more realistically priced inventory has been consumed since 2015, this year could prove to be an opportune time to list and successfully sell your Island property given the present steady demand. Please contact us to discuss performing a market analysis and Broker Opinion of Value of your property. With over 30 years of market experience, we are able to counsel our clients well.
If a purchase of an Island property is not in your future right now, there is still time to book your 2019 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 are waning. Please contact us to assist you in creating your dream vacation!
Please visit www.mvlandmarks.com to view a comprehensive list of all available Island listings for sale or vacation rental. And as always, please do not hesitate to contact us with your questions and curiosities concering properties of interest or Martha’s Vineyard real estate in general.
Summer is coming to the Vineyard, might YOU be coming to your Island home???