Happy belated New Year to one and all! As has become customary, we offer our annual installment of “The Year in Review” concerning Martha’s Vineyard Real Estate activities.
After another rather pedestrian “spring market” and seasonal weather pattern to start last season, Mother Nature did provide us with another terrific summer for all concerned. Let’s hope for another mild weather pattern to develop in early 2020 to help carry the consistent real estate activities of fall into the New Year!
The significant cadre of prospective buyers who have been biding their time since the market crash ten years ago and its subsequent recovery have become more aware of the nuances associated with Island ownership. Many parties re-entered the market during the past five seasons to make their purchases, which has effectively contributed to an inventory supply issue on-island that reflects what is being experienced in many primary markets. And despite attractive lending rates, we anticipate continued demand to outpace available supply, especially within the sub-million dollar market segments. Given the solid Q4 sales volume, and heightened competition among prospective buyers for well-priced, well-conditioned properties, we envision the New Year getting off to an early and robust start before the customary “spring market” arrives with great attention being given to the newly listed candidates for purchase.
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.
Market Statistics Courtesy of LINK
- Nationwide sentiment toward real estate has substantively 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.
- Freddie & Fannie Loan limits have again been increased by the Federal Housing Administration (FHA), specifically for the Cape Cod & Islands region. The ‘mezzanine’ level found above the conventional limit of $510,400 now resides at an attractive $765,600 before “Jumbo” mortgages are required for lending need. This upward adjustment may positively affect eligible buyer’s purchasing power and thus enable considering a wider range of properties to purchase on-Island.
- The National Association of Realtors’ chief economist Lawrence Yun says that a recession in the housing market is unlikely in the year ahead. Although, it will likely be a year of slower growth. Tight inventory conditions will remain an ongoing concern that will keep prices relatively elevated but stable, and that mortgage rates should help sustain demand.
- The 4th Quarter again realized significant volume of residential sales on-Island (144) exceeding Q1 (62), Q2 (109) and Q3 (110). Interestingly, during the past several years, our “Fall Market” has become stronger than the customary “Spring Market”. The total number of properties for sale has decreased significantly from the seasonal high of approximately 524 in late August to 240 at this writing. Yet with overall supply of inventory falling, prices can more readily increase. Therefore, this could be a cue for potential sellers to enter the market with new listings come spring, if not sooner. Please contact us to discuss the salability of your Island property.
- In 2019, residential sales on-Island were realized from all price segments totaling 387 units, which was 9% fewer than the 424 transacted in 2018. Median sales prices increased by 9%, from $802,500 to $875,000, while average sales prices jumped 32%, from $1,312,996 to $1,732,442, year over year.
- Sales prices on-Island captured 95.5% of their asking price and garnered nearly 124% of their respective tax assessment.
- For the year, Island towns conveyed the following number of residential properties; Edgartown-118, Oak Bluffs-106, Vineyard Haven-81, West Tisbury-42, Chilmark-30, 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. Scarcity, location, condition, and amenities continue to be key drivers toward establishing value and pricing.
- As desirable inventory is pared down, especially within the sub-million dollar segments, prices have continued to adjust upward as a function of supply and demand. It is not surprising that within the tight market climate, the better priced, better conditioned properties are going under contract more quickly than their respective competition.
- Our successful 2019 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.
We expect the increase in search activity to continue, especially from those who have long watched from the sidelines and now fear “missing out” in capturing their dream of Island ownership, or risk less choice and endure higher finance costs to do so. But we also anticipate the potential in finding fewer properties becoming available as a result of the consistent level of acquisition during these past several years. The next several months will be telling with respect to determining the levels of inventory the spring market may hold.
Should the economy remain strong and stable, the absorption rate for Island property will also continue to increase, resulting in upward trending sales prices with supply further contracting. Lastly, as mortgage interest rates expect to remain moderate in 2020, this may provide some incentive for prospective buyers to act sooner rather than later as lower rates generally help to increase their purchasing power.
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 an attractive 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 2020 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 also visit www.mvlandmarks.com to view a comprehensive list of all available Island listings for sale or vacation rental. And 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???