Martha’s Vineyard Real Estate Market NewsMartha's Vineyard Real Estate Market Update is a service offererd by Tea Lane Associates. Tea Lane Associates updates Martha's Vineyard real estate sales transactions on a weekly basis and posts quarterly reports and charts for your review including all homes and land sales on the island. Please let us know if you have any questions or would like more detailed analysis for properties in a specific town or price range. We have much more information to share with you on the Martha's Vineyard Real Estate market.
MARTHA'S VINEYARD 2011 REAL ESTATE MARKET REVIEW The real estate market on Martha’s Vineyard slipped in 2011 from 2010 with the number of properties sold falling 4% to 399, total dollar volume falling 12% to $362mm, and average price falling 9% to $908,100. This setback from the modest recovery of 2010 leaves many questioning what lies ahead. The good news is that there remain serious buyers on the island and they continue taking advantage of prices well below the 2005-2007 levels. A rise in sales activity from September to December helped to keep the number of transactions in 2011 almost at pace with 2010. However, dollar volume fell dramatically as sellers accepted lower prices, resulting in a significant decline in average sales price on the island bringing us back to the range of the 2009 average price $903,000. As of January 2012, with inventory remaining high, there are strong indicators for a continued buyer's market in 2012. While the above statistics include all transactions and are island wide, individual towns and market segments performed somewhat differently in 2011. Martha’s Vineyard is an island with six towns, each with its own character and specific market conditions. Within each town there are different niches as well…waterfront, water view, high-end, mid-range, entry level and commercial properties. Because each of these market segments can be, on its own, very small, generalizing trends or making broad statements is difficult. Up-Island At first glance, the up-island real estate market seemed to have held somewhat steadier than the island overall in 2011, but there is a catch. While the combined number of sales (houses and land) in West Tisbury, Chilmark and Aquinnah held at 91 in 2011 from the same number in 2010 and total dollar volume dropped just 6%, it must be noted that one large transaction is skewing these results: the $22,400,000 sale of Blue Heron Farm in Chilmark. Delete this sale from the calculations and the total dollar volume and average price Down-Island The combined down-island towns of Vineyard Haven, Edgartown and Oak Bluffs also saw a decrease in total dollar volume and numbers of sales in 2011. However, Oak Bluffs was the one town on the island to report gains in 2011, proof that the lower end of the market is active and buyers are taking advantage of opportunities there. Oak Bluffs transactions increased 34% from 82 in 2010 to 110 in 2011 and total dollar volume increased 18% from $53mm to $65mm. However, average price in Oak Bluffs dropped 12% to $568k. Looking at the other two down island towns, Vineyard Haven sales dropped 20% from 98 in 2010 to 78 in 2011. Total volume in Vineyard Haven was down 32% and average price was down 14% in 2011 to $801,414. Edgartown was the only town where prices held in 2011 with average price dropping only 1%. Total sales in Edgartown decreased 17% from 143 in 2010 to 119 in 2011 and total dollar volume fell by the same 17%. Entry Level Sales The situation in Oak Bluffs in 2011 highlights the point we made last year that entering the Martha’s Vineyard real estate market has became easier every year since 2005 and this trend continued in 2011. There were more sales under $1mm in 2011 than in any year since 2005, with 64 of them in the up-island markets. Looking at this lower end of the market up-island, in Chilmark specifically, nine houses sold under $1mm in 2011, compared to 6 in 2010 and 4 in 2009. Foreclosures play a role in pushing down prices in the lower end of the market. Foreclosures were rare on Martha’s Vineyard prior to 2008. Last year we estimated 59 foreclosures on the island from 2008 – 2010, and an undetermined number of other properties taken over by banks. In 2011, we can more accurately account for foreclosed properties and properties taken over by banks at 39 for the calendar year. Almost all of these properties were under $1mm. This segment’s decline was hard on sellers but represented an opportunity for buyers. Mid-range and High End Sales One segment of the market to see more activity in 2011 was the very high end (over 7 million). The number of sales over 7 million increased in 2011, building on an earlier increase in 2010. This was an encouraging sign for sellers in this segment of the market which was hard hit in 2009. However, this increased activity for sales over 7 million represents just a small portion of the high end market. Looking at all sales over 5 million, or over 3 million, or over 1 million, the total number of high end and mid-range transactions declined in 2011 from 2010. (See our chart below for more details.) This played out very clearly in Chilmark where there were 9 sales over 1 million in 2011, a decline from 15 sales over 1 million in 2010. In 2011, the two highest sales in Chilmark were 22.4 million and 14 million while the highest sale in 2010 was 7.4 million. On the other hand, in 2011 there were 5 sales between 1-3 million, a decline from 9 sales in 2010. In 2011 there were 2 sales between 3-6 million, a decline from 5 sales in 2010. The very high end was strong while the number of sales in the rest of the high range and the midrange declined by half. Commercial Transactions There were 15 commercial transactions in 2011, up slightly from 14 in 2010 and 10 in 2009. The average price of a commercial transaction was $1,840,000 in the years 2005-2008. This declined to $843,000 in 2009 and 2010, and declined again in 2011 to $749,000. The median price of a commercial transaction was $767,000 in the years 2005-2008 and this declined to $625,000 in 2009 and 2010 and $500,000 in 2011. Clearly, commercial real estate is also affected by the economic downturn. Conclusion Martha’s Vineyard is a sought after destination with a limited number of properties which has a history of stronger property value than many other real estate markets. However, we are inextricably connected to the world around us which continues to face historic uncertainty. Our future is tied to national and international economic and political developments. The island real estate market was unable to sustain the modest growth of 2010 and saw declines almost entirely across the board in 2011. There are too many unknowns for us to predict how weak or strong the Martha's Vineyard housing market in 2012 will be. What we can predict is this....whether you are a buyer or a seller, there will be opportunities in this year's market, as there were in 2011. Last year we wrote an article on advice for buyers and for sellers. We think it still applies. To read it, scroll to bottom of this page. Source: LINK and www.masslandrecords.com Martha's Vineyard Real Estate Transactions - Average Price in Blue & Total Volume (000) in Green by Year 
Number of Transactions (green) and Property Inventory (orange) by Year 
Charts include all arms-length residential, commercial and land transactions; does not include time shares or partial purchases. Note: 2006 numbers do not include the $42million hotel sale that occurred in December 2006.
Note: for "Inventory of Properties for Sale", year-end inventory total was used.
In 2011, sales in most market segments declined. Notable exceptions were the under $1 million segment and the over $7 million segment. There were more sales under one million in 2011 than in any year since 2005. The number of sales in the very high end, over $7 million, also continued to rise. 2011 was the most active year for this high end segment of the market since the peak years of 2005-2007.
THE LENDER’S POINT OF VIEW We asked three local lenders for their point of view on market conditions for borrowers. Tim Lowe, Vice President, Martha's Vineyard Savings Bank: The Island market has historically been the last in and the first out of a challenging economy, because of limited supply and sustained demand creating sustained market values. Certainly the housing market in 2009-2011 has been soft and values have declined. The positive news is that, combined with inexpensive money (low interest rates) this creates a great opportunity for primary and second home buyers, as well as those buying an investment property. The interest rates have been the lowest in recent history, dating back to the 1940's and 50's. These low cost of funds, both conforming and Jumbo loan amounts provide borrowing power and opportunity for those people that have contemplated investing in real estate. It may also help a prospective seller by providing more opportunity through a buyer's ability to leverage the property in a less expensive manner. 30 year rates are currently as low as they've been and likely to be in our working lifetimes. This may not be the case 2013 and beyond. As short and long term interest rates rise, they historically do so more quickly than when they drop. Some folks may be sitting on the sidelines when this happens. Edward Barrett, Senior Loan Officer, Salem Five Mortgage: Prices seem to have stabilized, and appraisal reports have been pretty consistent relative to price, even higher in many cases. It is a great market for property purchase, with a strong opportunity to lock in a low price, with great value-appreciation upside in the future. We expect increasing purchase numbers in 2012. Similarly, land purchase, construction, and home renovation loans are accessible at favorable prices and rates, and it is predicted that this low rate environment will continue throughout this election year. Ultimately, employment numbers will be the driver. Look for rates to stay stable throughout the winter but don't be surprised if improved economic data in the spring and summer has a small incremental impact on rates. Low jumbo rates continue to provide increased buying power for folks who are in the market for their "Dream Home". Jeanne Ogden, Vice President, Bank of Martha's Vineyard Sovereign Bank: With current rates at historically low levels, there are many attracting financing options available. Many of the conforming loan programs will finance up to 95% for your primary home and up to 85% for a second home. For loan amounts over $417,000, the jumbo programs offer up to 80% financing and rates are generally only .125% or .25% higher than conforming rates. There are also many financing options available for construction and renovation loans and lenders have been busy this past year with refinancing and purchase activity. With rates remaining low, the purchase market has shown increased activity with buyers taking advantage of both the low rates and great deals in housing prices. The loan volume at the start of 2012 has been positive and we are optimistic for increased activity throughout the year.
MIL (TAX) RATES BY YEAR BY TOWN
Town 2011 2010 2009 2008 2007 2006 Aquinnah 3.86 3.79 3.49 3.25 4.03 3.69 Chilmark 2.13 2.03 1.98 1.96 1.87 1.85 Edgartown 3.40 3.09 2.91 2.73 2.94 3.03 Oak Bluffs 7.03 6.30 6.04 5.63 5.59 5.75 Tisbury 7.52* 6.57** 5.98 5.49 5.63 5.20 West Tisbury4.73 4.46 4.28 4.10 4.38 4.77 Tisbury 2011 Commercial = 9.49* Tisbury 2010 Commercial = 8.27**
A MIL (tax) Rate is the method used to determine the taxes that are to be paid on a property. It is factored on a per $1000 value basis. Each town on the island sets its own rate and assessed valuations and re-evaluates properties every three years. The rate runs with the fiscal year. For example: a residential property that has been assessed at $1,000,000 in West Tisbury in 2011 is taxedata residential mil rate of 473 mils. To determine the amount of property tax that is paid on that house, you multiply the assessed value by the mil rate. $1,000,000 x 0.00475 = $4,750.00 In Massachusetts, the sales ratio used to determine the assessed value is 100% of true market value. n increase in MIL rate does not necessarily mean an increase in the tax paid. It is common to see increases in the MIL rate offset by decreases in the assessed valuations.
TEA LANE ASSOCIATES 2011 YEAR-END HIGHLIGHTS: - Tea Lane Associates represented 25% of the buyers and sellers up-island in transactions over $1mm. The rest of the market share was distributed among 16 other companies with the largest share being 10%. - Tea Lane Associates sold property in every town on the island. - Tea Lane Associates were involved in the two highest priced sales in West Tisbury, the highest priced sale in Aquinnah and the third highest priced sale in Chilmark in 2011.
From 2011 Newsletter... BUYERS DILEMMA IN A BUYERS MARKET Weak real estate markets can wreak havoc on sellers as they wrestle with proper pricing during an economic downturn. Ironically, buyers struggle too but in a different way. Falling prices are usually accompanied by rising inventory as seen on Martha's Vineyard by the 36% increase in average number of listings from the three year periods of 2005-2007 to 2008-2010. Price declines and a surge in inventory create opportunities but may also create indecision as buyers struggle to navigate the new terrain cluttered with excess and often mispriced inventory. Additionally, an increase in inventory does not necessarily mean an increase in the particular type of property you are looking for...certain properties are rare. "How do I recognize real value with all the inventory to choose from?" "Is it the right time to buy or should I wait?" "I've seen many properties but not the RIGHT property." We hear these comments often. There are excellent opportunities for buyers in the current Martha's Vineyard real estate market. We are highly skilled at helping buyers discover different part of the island and assessing the current trends to identify the best values in this complicated secondary home market. FOR SELLERS IN A BUYERS MARKET As simple as it sounds, correctly setting the asking price for your home is the key factor to success in this market. Currently active buyers are looking for real value and they usually have a number of properties to choose from. The properties that are selling are typically the best values in their price range, area, and/or category. Put yourself in the buyer’s shoes and look at the different offerings in your market segment. Assessing the properties you need to compete against is essential to understanding the pricing of your property based on real market data. While a few "special" properties are unique enough to command a slight premium, most buyers in this marketplace are value driven and premiums are few and far between. In 2010 we saw the number of properties sold on Martha's Vineyard rise when compared to 2009. While this is encouraging it is still a very challenging market. The overall number of homes sold last year is still dramatically down from pre-2005 numbers. In addition to fewer sales transactions, the inventory of homes on the market for sale has risen 36% over the past few years. This has naturally caused a rise in the average "days-on-market" for almost all properties. With less demand coupled with more properties to compete against, the importance of correctly pricing your property in the current market is essential. In addition to price there are many other important considerations when preparing your property for sale in a complex and challenging market. Whenever possible you should try to answer any and all questions about engineering, zoning, permitting, and/or other issues in advance. This might also include the cost of potential renovations to bring your property up to the market standard of your competition. As one of the most experienced and successful real estate firms on Martha’s Vineyard, Tea Lane Associates has a full time staff of knowledgeable agents and brokers that can help you navigate this market and achieve your goal.
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