After asking Island real estate professionals to summarize the 2011 market (responses published in December issues of The Times), we asked them for insight into 2012. The first set of responses are below. We also talked with the M.V. Land Bank about its numbers.
Survey of real estate brokers:
What do you see ahead for the real estate market on the Island in 2012?
Russell Maloney, Russell Maloney Real Estate:
It all depends on the state of the economy. The unemployment numbers are finally ticking down, albeit painfully slowly, and the overall rate remains too high. Energy prices are ticking downward as well. If we continue to see an improvement in the economy as a whole, we should see increased tourism and, likewise, increased activity in the second home market.
Susan Cahoon, Homes on Martha’s Vineyard:
Historically, the real estate market slows when there is a presidential election. I definitely see that having an impact on the market. Buyers and sellers will wait to see what the political climate will be. The Federal Reserve will probably continue to hold borrowing rates/inflation lower, and we’ll continue to see mortgage money in the lower ranges.
Sean Federowicz, Coldwell Banker Landmarks Real Estate:
In the macro market, housing is still in trouble – in Detroit, yes, but in Washington D.C., not a problem. In New England we’ve fared better than most. There’s been a tick up in the market here, but nothing has been easy. The expectations of buyer and seller are not always in sync, but that’s the job of the realtor. I see more of the same in 2012, unless we face a catastrophe in the macro sense. There are opportunities to be had since we’re back to 2002 values, down 35 percent from five years ago. I’m cautiously optimistic but we need the weather to cooperate to encourage buyers and the world to stay as is or modestly improve.
Julie Flanders, Flanders Up-Island Real Estate:
Earliest indications are that rentals are already ahead of last year. The Island is a great place to vacation and a safe place to invest money. I think it will be similar to last year.
Peter Fyler, SplitRock Real Estate:
I really don’t know anymore what is ahead of us, but my guess would be more of the same. I think it would be foolish for anyone to prognosticate with any certainty on what the future will be. One survey I read suggested that most Americans think prices will go down 1.1 percent over the next year, but we just don’t know. In what has become a global economic meltdown, we are constantly tinkering with possible solutions, but the uncertainty is vast and the landscape seems to change daily.
Bill LeRoyer, Harborside Realty:
I hope it’s better than 2011. A crystal ball would be great, but I don’t see a lot of change in the coming 12 to 18 months. I think we’ll stay steady, with more foreclosures, and opportunities for buyers to get in at reduced prices. High-end property is moving. Blue Heron Farm sold for $22 million, but there are also over 40 properties in downtown Edgartown for sale. There is a lot of inventory and uncertainty on the buyers’ side, but there are opportunities to pick up properties in the lower price range. Most activity has been in the under $500,000 and even $400,000 range. People who need to sell may take a loss. If you don’t have to sell, my advice would be to wait it out.
James Lengyel, Executive Director, Martha’s Vineyard Land Bank Commission
How has the real estate market affected the Land Bank during the current recession?
Our fiscal year ended on June 30, 2011. Our revenues have been flat for two years but up from a low in 2009. We’ve discontinued major acquisitions and are focusing instead on smaller ones. We are awaiting a rebound. We’ve been through this before in the early 1990s and then resumed purchasing. The Land Bank revenues determine our acquisition program. It’s quiet now but we will resume when revenues return.