Real trends: People stay, prices skyrocket

Affordable housing stock feels pressure as more people seek year-round residences on Martha’s Vineyard.

John Siffert usually only visits his home on the Island in the month of August, but this year he arrived in March and plans to stay into the fall. — Jeremy Driesen

Every August John Siffert, a New York–based lawyer, stays at his home in West Tisbury with his family. In March, as signs pointed toward shutdowns and quarantining, Siffert and his family came to their Island home. With the ability to work from home, Siffert has stayed on the Island for the entire summer, and expects to stay through at least October. After that he says he’ll take it day by day, and see how New York City is faring. “The Island is a special place. Everything from the people to the color of the sky,” he said.

When the coronavirus pandemic began to upend almost every aspect of daily life back in March, and urbanites began flocking to more remote settings, the question was raised, Is the Island a safe haven?

Siffert and his family are part of the population that already owned homes on the Island, but are staying longer. Now a trend of new buyers is storming the market.

The rush to escape compacted cities has turned into a rush to buy up property, as the median home sale prices on Martha’s Vineyard are seeing record highs this year amid the COVID-19 pandemic that has altered almost every aspect of daily life.

According to LINK, a listing service that collects data from the Vineyard, Nantucket, and Boston, 292 properties have come under agreement on the Vineyard from March through August.

The median home sale price on Martha’s Vineyard jumped from $875,000 in 2019, the previous Island record, to $1,035,000 in 2020 — an 18 percent increase.

“Basically 2019 was a great year, lots of records, but 2020 is topping 2019,” LINK president Debra Taylor told The Times. “It’s really big jumps, which you don’t usually see in the median.”

Land sales also saw a new record sale price. In 2020, median land prices rose to $1,054,000, breaking the previous 2015 record of $790,699.

Edgartown specifically saw a 7 percent jump in home sales from last year, yielding a new record median home price of $1,415,000.

There were also new records for the median selling price of homes across the Island. Oak Bluffs was up 12 percent from last year, to $780,000, and Vineyard Haven was up 5 percent from last year, to $800,000. The median selling price of a home in West Tisbury was up 49 percent, to $1,417,500.

The most expensive properties that have sold since the pandemic hit in March have been a $9.4 million home, a $8.5 million home, a $7.5 million home, and a $5 million home — all in Edgartown, according to LINK operations and account services manager Eleanor Wilson.

Other towns have also seen expensive home sales. Since March, the highest sale prices by town have been: $5.5 million in West Tisbury, $4.25 million in Chilmark, $4.2 million in Vineyard Haven, $2.25 million in Oak Bluffs. There have been three home property sales in Aquinnah since March, with the highest at $1.48 million. 

On the other end of the spectrum, Wilson said, the lowest priced property was a 1,000-square-foot home in Tisbury on 0.27 acres that sold for $480,000. While there are outliers, such as the Tisbury property, Wilson said that land is so valuable on the Island, prices rarely get that low for a single-family home.

“The Vineyard has been appreciating in value for quite some time, and with the advent of COVID in 2020, we’ve had an unprecedented price escalation due to this unprecedented demand,” Taylor said. “We’ve never seen the jumps so big in the percent changes in median. Usually it’s 1 percent, 3 percent, 5 percent … We’re seeing the same thing on Nantucket.”

While there has been a buying frenzy on the Island, there hasn’t been a mass exodus from cities, but rather a new trend where people are buying “second primary homes,” according to Taylor.

“I’m not clear that these buyers are putting their primary homes for sale. This is literally a whole new trend of having a vacation home that is functioning as a primary residence,” Taylor said. “We’re not seeing an increase in inventory in Boston. That’s the piece that we’re all scratching our heads over — inventories not going up in Boston. People aren’t selling their homes to move to the suburbs or other places — they’re keeping their condos, but upsizing on the Islands.”

Taylor added there is an immediacy to the market right now. Buyers have mostly been families, but there are some couples and even single people finding a home on the Island.

Rumors have been rampant on the Vineyard that schools have seen a spike in enrollment, and though school officials say they’ve heard those same claims, they add there is nothing to them. 

However, if families do decide to stay on the Island, an increase in population could result in a strain on services, schools, and housing.

Tristan Israel, a Dukes County commissioner, former Tisbury select board member, and longtime Vineyard resident, said the affordable housing and rental markets would certainly be affected. If the people buying homes decide to stay, he added, there could be further impacts on labor. 

“I think we are already in a situation where we have a labor shortage, so I think that gets exacerbated,” Israel said. “I think it’s a matter of people of lesser means [needing] more support. Are the dollars there, and the manpower there, to help mitigate their situation?”

“It’s been crazy,” Shelley Christiansen, a broker with Coldwell Banker Landmarks Real Estate told The Times. “It’s pretty much buyers, at least with my experience, and anecdotally what I’m hearing from colleagues, there are so many people, especially city people, New York, Boston, and so on, who are just really dying to have their piece of the rock now.”

A strong economy, decent weather, low interest rates, and inventory contributed to a stronger than average winter for Christiansen — until the pandemic hit in March, and life and the economy seemed to go into freefall. She thought 2020 would be a year without much business, but things rebounded in the spring before “getting off to the races” in June.

Usually Christiansen has buyers who look at homes while visiting for the summer, and put off decisions until the fall, but this year, she said, there’s been a sense of urgency. “This year people know, ‘We can’t wait until September,’” Christiansen said.

Fred Roven, a broker at Martha’s Vineyard Buyer Agents, told The Times this is the most activity he’s seen in the market in 22 years as a broker. “It covers the whole range that we’ve always seen here, but I do think there’s an increase in people working from home and families with kids. I’m certainly getting more questions about the school systems than I ever had in the past.”

Roven also said the majority of his contacts in the past have been over email, but lately he’s gotten a flurry of calls from people wanting to visit the Island, with some coming and buying homes — a process he said usually takes several months. While there has been a significant rise in median home sale prices, Roven said, he’s interested to see how the next four months play out.

While many are buying up properties, some seasonal residents like Siffert who have owned homes for decades have decided to make their Vineyard dwelling their new homebase.

Elizabeth Langer and her husband, Richard Chused, another New York City couple, also came to their home in West Tisbury in March from New York City. Langer is working on her art while Chused, a professor at New York Law School, is teaching remotely.

“I thought we’d be here for a couple of months, maybe even a few weeks. Then things got worse in New York,” Langer said. “We have, right now, no plans to go back until there’s a vaccine that’s reliable.” 

 

Booming market lowers housing stock

The booming market is also a stark reminder of the issues facing the Island’s affordable and workforce housing stock.

Philippe Jordi, executive director of the Island Housing Trust, said he felt the housing stock would be under more pressure than it ever has been with the increase in people visiting the Island and with the increase in home buying.

“We always have been working hard to understand, in this very challenging market, even pre-coronavirus, how to make sense of purchasing properties and making them affordable for year-round residents,” Jordi said.

Over the past four years, IHT has been successful in completing affordable and workforce housing projects such as Scott’s Grove in West Tisbury and the Hanover House in Tisbury.

“We’re trying to come up with creative ways to compete in this really challenging market,” Jordi said. “What we’re seeing, in terms of people who rely on the marketplace for year-round or seasonal housing, is that it’s becoming harder and harder, obviously, as more people are moving here year-round, and in some cases renting. There’s additional pressure from people who are fleeing the urban areas coming here and working remotely.

“With the increased value of properties on the Island, it’s going to be, frankly, harder for us to come up with solutions that make financial sense,” Jordi said.

But even with increasing real estate prices, Jordi said, there are still people who are interested in having their property stay in the year-round community, and are willing to sell their homes at a discount or bargain sale.

One of the creative ways IHT is looking at providing housing is a place like its Daggett Avenue project, where an owner was able to stay at the property, but took out some of the equity on the property for IHT to build an affordable home.

Paddy Moore of Healthy Aging Martha’s Vineyard said Island elder services could face a challenge, depending on the age of buyers and which towns they’re moving to.

She was also concerned about the pressure on housing, but said that if a large number of people who buy homes end up staying here, services would have to adapt.

“If the population has significant growth, I think we would look for volunteers to help with the problems of people who couldn’t volunteer,” Moore said, adding that the housing crisis would see additional pressure. “I think we’ve got some potential benefits and some real challenges.”

Over 40 percent of land on the Island has been conserved from development, according to the Martha’s Vineyard Commission. One of the groups looking to protect even more Island land is the Martha’s Vineyard Land Bank.

The Land Bank, which receives a 2 percent transfer fee from each real estate transaction on-Island, has generated $9.1 million in revenue from January through August. While the Land Bank generated $1,774,323 in revenue in January and $949,820 in February, revenues dropped significantly when the pandemic hit in the spring — $533,179 in April and $573,945 in May — before leaping back to $1.3 million in June, $1.4 million in July, and $1.9 million in August.

In 2017, 2018, and 2019, the Land Bank generated $13 million, $14.2 million, and $14.8 million respectively, for approximately $42 million in revenue.

In those same three years, the Land Bank spent approximately $12 million in land acquisition costs, $14 million in debt service to pay for existing acquisitions, and $4.7 million in land management.

Lengyel said the remaining $12.3 million is kept in its treasury for future acquisitions.

“The Land Bank never lets the supply of cash drive any acquisition planning,” Lengyel said. “It’s the land itself. Is the land worthy of acquisition? — and then we work on acquisition.”

There are two types of land for purchase: retail and wholesale. Retail land are lots that are buildable, may have a house on them, and may have road access. Wholesale land are lots that are raw land, and have not been subdivided. Lengyel said the Land Bank is focused on purchasing wholesale lots, which tend to be cheaper.

“I know there’s a change in the retail value of lots, but those are the apples. We’re looking at the oranges, which are the wholesale properties,” he said. “Even in a rising market that will affect to some degree the values, a lot of our sellers want to see the land get protected, and they give the Land Bank really attractive prices because they really support our mission. That’s always been the case, and I think that will continue to be the case.”