For Martha’s Vineyard property owners who would like to sell their piece of heaven, and for aspiring Vineyarders who would like to buy, the message from the record of sales activity since the Great Recession has been troublesome. Despite some stabilization in volume and prices, the record for 2011 and for the first half of this year sings the same tune, that is if sings is the right word.
The inventory of property for sale remains at historically high levels, at least double what has been the standard. Prices have fallen and they appear to be steadying at a level 10 to 20 percent below peaks in 2007, but nevertheless they drifted downward between 2010 and 2011 and continue to do so.
Foreclosures have affected prices, but foreclosures have been limited.That’s true historically and remains true in this long aftermath of the recession. There were 39 foreclosures in the six towns of Martha’s Vineyard in 2011, almost all of them in the mid- to low-priced market segment.
Business property sales volume rose in 2011, but the average price of commercial real estate has fallen more than 50 percent since the middle of the last decade to about $749,000.
The global economic confusion and distress – tax uncertainty and debt uncertainty in the U.S., presidential election uncertainty too, European haplessness and GDP slowdown in the EU community, and emerging markets dragging – all result in a shall-I or shall-I-not attitude for sellers and buyers.
In 2011, the total of properties sold fell four percent compared to performance in 2010. There were 399 sales whose total dollar volume dropped 12 percent to $362 million. The average price fell nine percent to $908,100. In 2010, the thought was that the bottom had been found, but that thinking was flawed.
Buyers like the lower prices, compared with the highs at the middle of the last decade, but the question, as always, is, will they decline further. For sellers, the corresponding worry is that the low offer now entertained may be the best offer for a long while. This equation led in 2011 to still fewer sales at still lower prices and a continuing decline in the average value of transactions.
But, although it’s one small Island, it’s not all one market.
Looking around for bright signs
Up-Island, the volume of sales steadied in 2011, but still the total value of sales in the three up-Island towns fell about six percent, and one $22 million sale buoyed this disappointing result. Without it, the 2011-1010 comparison of average and total dollar volume is off roughly 25 percent. Taken as a whole, Aquinnah, Chilmark, and West Tisbury recorded declines in average price, dollar volume, and number of transactions. And, there has been no significant counter current in the first half of this year. In Chilmark the average price fell to $1.5 million, a 22 percent drop from 2010. In West Tisbury the average price declined 12 percent to $889,000. Buyers will remark that these averages remain high, compared with average prices across the country.
Down-Island sales and dollars also fell. But, the relatively modest price level for properties in Oak Bluffs attracted buyers and motivated sellers. Transactions increased 34 percent year over year, total dollars rose 18 percent. Nevertheless, the average price in Oak Bluffs dropped 12 percent to $568,000, a bargain by up-Island standards.
Edgartown saw prices hold steady in 2011, compared with the previous year. The average fell a percent. But sales were down 17 percent. For Vineyard Haven, the number of completed transactions declined, and the average price fell 14 percent to $801,000.
If you were a buyer, 2011 was a good year for you. The selection was expansive, and prices remain soft and softening. For buyers with modest wants, the advantages multiplied. Oak Bluffs was active and relatively successful last year, and continues to be in 2012, because the price point is lower. Sellers are more flexible, perhaps inspired by personal financial circumstances.
It is not particularly unusual. For decades Edgartown has been the biggest, most active real estate market, in part because it is a big town geographically with a great variety of kinds of property, from fabulously expensive to extremely modest. Oak Bluffs has been the next most active, largely because price points for the various market segments attract a buyer population that is larger. This expanding mid-range market influences sales not only in Oak Bluffs but in all six Island towns. As prices decline, the stable of prospective buyers has expanded.
Still selling somewhere
The most desirable Vineyard properties still attract buyers. Not as many as has been the case, but an eager few from a small but financially capable cohort. They want splendid waterfront houses, dock, a swimming beach and an address that says top of the line. Sales of properties priced at $6 million and above rose in 2011. It’s a price point that has held up well since 2009, although sales at this level are few, and when all sales of more than $1 million are considered, the volume declined in 2011, as it did elsewhere in the market.
The places to look for confirmation are Edgartown and Chilmark, the two towns with the historically highest average prices and highest volume in big ticket sales. The best properties sold at close to their top of the market prices, $5 million plus. For both towns, sales of expensive property between $1 million and $5 million declined in volume significantly.
What will 2012 bring
In general, real estate professionals here forecast more of the same. They emphasize a reduction in the pace of declining sales and prices, and the relative strength of the high end market. But they have been surprised and disappointed with the continued declines last year.
The combination of historically low interest rates, a modestly growing American economy, the Vineyard’s environmental and recreational attractiveness, its proximity to big, East Coast metro centers and to the East Coast’s relative wealth, and years of pent up demand buoy battered real estate brokers.
At the same time, tighter credit, slow job growth, a huge inventory of property for sale, and uncertainty about the future suggest low and lower prices and few and maybe fewer sales.
Vineyard Property Values from 2009 through the present can be found by utilizing the MVT Property Search Engine.