021 Q2 Market Commentary
Sean D. Federowicz, M.B.A.
Broker, Owner, Realtor
Happy summer from Martha’s Vineyard! After a most unusual and very subdued 2020 summer season, how marked a change it has been thus far with our re-opening happening with a ‘bang’! There is much to discuss, so please allow us to share our mid-year market commentary concerning the sales activity on-Island thus far.
After a rather mild winter and the lifting of rigorous travel restrictions that came from the mass vaccination efforts, our Q1 sales activity continued with greater fervor throughout Q2. However, there was not the typical ‘spring market’ activation of new inventory as in previous years. It is largely thought that due to prospective sellers who used their Island properties as “Covid havens”, they have delayed their potential sale. As prices continue to escalate as a result of the high demand and low supply condition, some of these owners may be looking to delay their decision even further in hopes of maximizing the potential selling price by holding off listing their property. Time will tell on that front.
Most industry pundits do not see any correlation to the housing bubble of 2008, which was a financial credit market driven crisis. The elements in play today are very different from then, spurred on by Covid-19 and is largely a supply & demand issue affecting the housing markets. Covid has indirectly helped the consumer to improve their balance sheets significantly by virtue of not spending their discretionary money last year. Mortgage rates are comparatively more attractive to those in 2008, and a generational shift in sentiment toward what matters most by way of “healthier lifestyles” and “meaningful consumerism” are additional factors affecting real estate.
But the new psychology of the prospective buyer on-Island is something to reflect upon in greater detail. Buyer sentiment had been stable for some time, as reflected by the above average rates of consumption during each of the past six years. But the “you only live once” mentality that has emerged from the confines, restrictions and stressors that most experienced during the 2020 Covid lock-downs, coupled with a desire to live in a healthier environment, have become motivating variables contributing to the sense of urgency for many to investigate and acquire a property on Martha’s Vineyard.
There was a similar event response in ‘urban flee’ that occurred after the terrorist attacks of 9-11. And like then, many people have again learned to effectively work remotely. This coupled with the relative close proximity of Martha’s Vineyard to most major corporate headquarters on the east coast, and the relative ease to get there, we are finding the consideration of where one’s primary residence resides is being strongly re-evaluated by many prospective buyers to relocate to the Vineyard, further embracing the “YOLO” philosophy to life.
The local market had been demonstrating various hot spots of activity since early 2019,
But choice of inventory has become less available given the consistent consumption across the various market segments during the past six years, and was only further exacerbated by the “Covid buying frenzy” during the past 15 months. And since the Island is a finite land mass, and does not replenish inventory quickly through mass construction projects as found off-Island, the number of available units will likely continue to remain tight or contract further.
Here are the more meaningful statistics to consider through Second Quarter 2020:
Despite the opening of the season and arrival of warmer temps, local inventory remains tight. At this time last year, there were 383 residential properties actively listed for sale. As of this moment, there are only 101 available Island-wide.
Thus far in 2021, a total of 229 residential properties were sold among the Island towns, which is up 27% from last years’ sales of 180 for the same period:
Edgartown-75, Oak Bluffs-61, Vineyard Haven-56, West Tisbury-22, Chilmark-9, and Aquinnah-6.
Second Quarter sales statistics courtesy of LINK
Year-to-date median residential sale prices on-Island have increased 36.5% from $878,000 to $1,198,000, while average residential sale prices have increased 34.9% from $1,444,000 to $1,949,000 as compared to the same period in 2020.
Year-to-date residential sales in the aggregate have captured nearly 97% of their final asking prices, and garnered approximately 154% of their respective tax assessments! The strength of this correlation is subject to factors such as condition, amenity, and uniqueness of the subject properties sold, but more importantly competition relative to available supply.
Resort-vacation-destination markets like Martha’s Vineyard have continued to enjoy consistent attention and acquisition; however they too are now encountering significant inventory driven issues much like the primary markets have endured. And while decision-making drivers differ when electing to acquire a vacation type home as compared to that of a primary residence, there are similar economic, emotional, logistic, and utilitarian variables that are employed when electing to undertake of such a venture on-Island.
Our agents are skilled and savvy in helping you identify and address each of these concerns. Please contact us for assistance to discuss your particular questions, curiosities, wants and needs concerning Martha’s Vineyard real estate. And do regularly re-visit www.mvlandmarks.com to keep abreast of all Island properties actively offered for sale.