Greetings from Martha’s Vineyard. We hope that each of you are remaining healthy and safe during these unprecedented times. Summer came to the Island and brought some wonderful weather to help us enjoy the Island’s outdoor lifestyle. It was a much appreciated respite from the indoor quarantine of early spring due to Covid.
The restrictions and stressors that were imposed by this unwelcome virus certainly have made an impact on Martha’s Vineyard. Patrons ultimately did arrive on-Island after the travel bans were lifted, and they quickly learned to cope with summer’s new paradigm. Perhaps the greatest benefits received from this summer was a return to simplicity, the appreciation of life with family and friends, more wholesome living, and the enjoyment of nature’s pleasures from such a beautiful place.
The most surprising result from the past three months was the frenetic and surging demand from those who reside in more dense or urban areas to find almost any form of haven from Covid on Martha’s Vineyard. This was a new acquisition variable that no one in the brokerage community fully recognized earlier this year and has become a significant driver of purchase activity and the vast price escalation resulting from a low housing supply.
Beginning the New Year, the local inventory was already working from a deficit. The annual consumption of residential property has far outpaced the replenishment rate during the past six years. And being an Island, we are finite in the amount of land that can be developed as it is. Certainly, normal life events such as death, divorce, and family economics can add to inventory. But “flipping”, or moving up, are not typical drivers that create more stock within a discretionary market, especially as most purchases made on Martha's Vineyard are from a ‘lifestyle and legacy” perspective.
Clearly, there are continuing geo-political and macro-economic issues in the world today, but health and safety have become paramount considerations for families. We have frequently heard the term ‘re-designing’ one’s life during these tumultuous times. “If my kids and I can work and school remotely via Zoom, our home can be anywhere we desire!” And with increased purchasing power that is made available through low lending rates, many of the prospective buyers we have represented this summer are making the decision to invest in and migrate to Martha’s Vineyard for a healthier and arguably safer environment for their families.
While inventory on-Island exists across the full market spectrum, no segment has been ignored during this wave of recent purchase activity. Not surprisingly, the most economical market segments have experienced the greatest levels of consumption too. But for buyers, as limited supply persists, it will only become more problematic as heightened competition coupled with low inventory will preserve elevated prices for the foreseeable future. And this, unfortunately, is not a condition that is likely to resolve itself in the short-term.
For sellers, the momentum has swung in their favor given the low inventory levels that exist. However, that does not enable them to command outrageous prices at resale. Mortgage lenders learned their lessons well from the last recession and have become highly vigilant with respect to appraisal and credit risks. The exuberant excesses we recall from the last housing bubble are not present today, nor are the same contributing factors. However, location, amenities, and condition will continue to be significant pricing variables toward the consideration and urgency to convey real estate on-Island.
Please consider the following;
- Year-to-date 362 residential properties have sold on Martha’s Vineyard, which is up 29% from the 255 sold for the same period in 2019.
- Q3 alone conveyed 183 residential properties, which is up an astounding 79% from the 102 sold in 2019 for the same period.
- Year-over-year, median home sale prices have surged 32.3% from $785,000 to $1,035,000 with average home sales prices also increasing 10.2% from $1,427,000 to $1,573,000 for the period.
- On average, year to date home sales on-Island have transacted at approximately 95% of their asking price while realizing 132% of their tax assessment. This correlation suggests that property sale prices are exceeding the respective tax assessed values more broadly throughout our micro-market, but remain subject to the attributes of condition, location, utility, uniqueness, and now greater scarcity.
Third Quarter sales statistics courtesy of LINK
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.