Resilient Martha's Vineyard real estate declines modestly in Q1
Now that the brutally long and cold winter months are in the books, and whatever remaining snow has finally melted, and Opening Day is behind us, we can look forward to the popping of perennials, long warm days and soft ocean breezes with great anticipation to the fun and relaxation that summer on the Vineyard affords.
It is also again time to review the Island's real estate market and first quarter results.
Clearly, the world remains in a tumultuous state of anxiety and flux. While interest toward, and the acquisition of, Martha's Vineyard real estate had been nothing short of frenetic throughout the summer and fall last year, it has slowed and softened a touch during these first three months of 2011. The number of transactions executed thus far, however, have not dropped as precipitously as was observed in other areas of the region and country. Still, we have nonetheless witnessed a smaller volume of units sold and at modestly lower prices thus far in 2011.
Notwithstanding the world events occurring in Europe and Asia, and our own country's economic issues, it still remains surprising how resilient the Vineyard's real estate market continues to behave. Like most folks, we practitioners in the Island market certainly felt the impact of winter's wrath and the seemingly incessant snow events that dogged most of us through much of February and March. It appears that the weather this winter became a significant deterrent for many prospective buyers, leading them to delay their pursuit of an Island property at this early stage in the year as compared to what we experienced last year.
For your consideration, here are some observations regarding the recently closed quarter:
The number of properties for sale has remained relatively constant for nearly four years now — 600 to 700 total units. These numbers continue to remain above normal carrying levels by almost double. However, despite the harsh weather this year, 68 homes Island-wide have sold since December 31, 2010. This was a decrease of 6.8 percent over the same period in 2010.Total unit home sale values decreased for those homes sold by some 14 percent island-wide. The median price on-Island is now $553,000, down 10.2 percent. The average home price of $1,035,000 is also down 7.7 percent. The comparable 2010 figures were $615,000 and $1,121,000 respectively.
First quarter home sales on-Island closed at approximately 94.3 percent of the asking price and have in the aggregate captured 92.4 of the respective town tax-assessed values.
Distressed sales on-Island have persisted during these challenging economic times but seem to have remained constant, or only modestly increased since the same period last year. This opinion is subjectively offered from our agency's experience, because such sales remain difficult to monitor and assess accurately.
During the first quarter, we've witnessed the dynamic between seller and buyer continuing to evolve, especially given the interconnectedness of the world today and its effect on Martha's Vineyard real estate. But as a second home/vacation market, where discretionary purchases often involve making lifestyle choices, competition for capable buyers remains great, and the motivation of any given seller is highly subject to the individual circumstances.
Given the opportunities, the continued low interest-rate climate, and implied value now found on-Island, many new prospective buyers have emerged this early spring seeking to acquire Martha's Vineyard real estate for both the financial and emotional returns it continues to provide.
According to a recent National Association of Realtors survey of second home and vacation home buyer motivations and expectations: 89 percent purchased their vacation or second home as a family retreat; 29 percent purchased their second home because it was a "good investment opportunity"; 25 percent purchased their second home to rent to others; 14 percent purchased their second home for tax benefits; 26 percent purchased their second home as a future primary residence; 80 percent purchased their second home because they believe now is a good time to purchase.
It is our anticipation that the lower to mid-price segments of our micro-market will continue to demonstrate strength in the near-term, with the high-end performing albeit at a modest pace comparatively in 2011.
Sean Federowicz is a principal at Coldwell Banker Landmarks Real Estate in Vineyard Haven. Landmarks is a full service brokerage, offering exclusive listings of properties for sale, as well as all available Island-wide listings, and certified buyer representation. Landmarks also brokers vacation and year-round rentals, and Mr. Federowicz also offers periodic analysis of trends in the Island real estate business, to customers and others who may become customers. Reach Mr. Federowicz at 508-693-6866 or mvlandmarks.com.