MARTHA'S VINEYARD 2012 REAL ESTATE MARKET REVIEW
The real estate market on Martha’s
Vineyard rallied from 2011 to 2012 with the number of properties sold
increasing 27% to 507, total dollar volume increasing 32% to $487mm, and
average sales price gaining 4% to $946,000.
The real estate market on the island, like across most of the country,
has been sluggish since being hit by the recession in 2008. After a modest
recovery on the Vineyard in 2010 followed by another downturn in 2011, the 2012
real estate market shows significant signs of health with dollar volume at its
highest level since 2007 and total transactions at a level higher than we’ve
seen since 2005. However, the buyers were welcomed back in 2012 with
recession-adjusted pricing that only rose 4% (average sales price) compared to
2011, remaining well below the prices from the peak 2005-2007 levels. The
modest increase in price coupled with the fact that the peak inventory level in
2012 was down 9% from the peak in 2011, signals that the buyer’s market of the
past four years may be starting to shift.
above statistics include all transactions and are island wide, individual towns
and market segments performed somewhat differently in 2012. 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.
was the big winner in 2012 due to the town’s 96% increase in the number of
transactions, from 28 in 2011 to 55 in 2012, and 40% increase in dollar volume,
with enough high end sales to keep the average price relatively flat at
$1.56mm. It is important to note that the average Days On Market for the
properties that sold in Chilmark in 2012 was 472 days, much longer than the
island-wide average of 302 days, which paints a clear picture of the stagnation
in Chilmark in 2011. It seems Chilmark sellers held out in 2011 for higher
offers but decided to negotiate in 2012 to move their inventory.
island towns saw an increased quantity of transactions and dollar volume in 2012
except for Aquinnah which experienced a slight downturn in the number of
transactions from 14 in 2011 to 12 in 2012 and dollar volume which fell just
$1.5mm from $108.5mm in 2011 to $107mm in 2012. Average price in Aquinnah was
up 15% to $893,000. Historically many up-island buyers move to Aquinnah to get
more for their money so Aquinnah may have been adversely affected by the gains
of the Chilmark market in 2012. The adjusted Chilmark pricing made the market
more competitive for Aquinnah which could have caused this slight dip for
Aquinnah in 2012.
Tisbury had a modest 8% gain in the number of transactions from 48 in 2011 to
52 in 2012, but the real story is the 42% jump in dollar volume (from $43mm in
2011 to $60mm in 2012) and 31% jump in average price (from $887,000 in 2011 to
$1.16mm in 2012). 2012 saw the return of a strong mid-market in West Tisbury
with 20 sales in the $1.0-2.5mm range, a segment of the market which was
lagging in the recent past.
up-island, the combined number of sales (houses and land) in West Tisbury,
Chilmark and Aquinnah rose from 91 in 2011 to 119 in 2012 (a 31% increase) and
total dollar volume was up 37% from $115mm in 2011 to $157mm in 2012.
Average price rose slightly, from $1,331,812 in 2011 to $1,369,230 in 2012 (a
2.8% increase) while median price rose from $664,628 in 2011 to $850,000 in
2012 (a 27.9% increase).
combined down-island towns of Vineyard Haven, Edgartown and Oak Bluffs saw
healthy increases in total dollar volume and numbers of sales in 2012. For
Edgartown this translated into a 15% higher average sales price of $1.25mm;
however, even though Vineyard Haven and Oak Bluffs’ had significantly more
transactions in 2012, they were properties selling at lower prices and
therefore Vineyard Haven and Oak Bluffs saw average sales prices decrease
14-15% to $588,100 and $486,500 respectively.
Edgartown specifically, the number of transactions grew 42% from 114 in 2011 to
162 in 2012 and total dollar volume increased 62% from $125mm in ‘11 to $205mm
in ’12. Vineyard Haven experienced 40% growth in the number of transactions
(from 72 in 2011 to 101 in 2012) and had a 20% increase in total dollar volume
(from $49mm in 2011 to $59mm in 2012). Total number of transactions in Oak
Bluffs increased 32% (from 95 in 2011 to 125 in 2012) and dollar volume was up
12% (from $54mm in 2011 to $61mm in 2012).
Entry Level Sales
continued to get easier to enter the Martha’s Vineyard real estate market in
2012. There were 385 sales under $1mm in 2012, more than in any year since
2005. Unfortunately, increasing foreclosure sales played a role in this scenario: there were 58 foreclosure sales in
2012 compared to 39 in 2011, a 48% increase. The foreclosure sales in 2012
accounted for 15% of the total sales under $1mm. Looking at specific towns,
Aquinnah had no foreclosure sales, Chilmark had 1, Edgartown had 12, Oak Bluffs
had 22, Vineyard Haven had 20 and West Tisbury had 3.
been following sales of homes under $1mm in Chilmark which is a small but significant number that had been
climbing the past few years but in 2012 it declined to 7 (from 9 in 2011, 6 in
2010 and 4 in 2009).
segment of the market to see more activity in 2012 was a portion of the
high-end ranging from $3-7mm. The number
of sales in this range had slowed in 2011 to 22 and picked up again in 2012
with 36 sales. This was an encouraging sign for sellers in this segment of the
market which was hard hit in 2009.
Looking at all sales over 3 million, the total number of high end
transactions increased to 41 in 2012 from 32 in 2011; however, in both years,
this segment of the market represented 8% of the total number of transactions
(see our chart below for more details).
Therefore, the high-end segment held its share of the market and grew
proportionally with the rest of the market in 2012.
were 20 commercial transactions in 2012, up from 15 in 2011, 14 in 2010 and 10
and 2009. The average price of a commercial transaction was $1,840,000 in the
years 2005-2008. Average price declined in 2009 and 2010 until the low in 2011
of $749,000. However, 2012 saw in increase in average price to $975,000. The
median price of a commercial transaction was $767,000 in the years 2005-2008
and also had declined each following year until the median price hit the low in
2011 of $500,000. 2012 showed median price jump up to $762,500. Commercial real
estate is also affected by the economic conditions and seems to be rebounding
in line with the residential market.
Nationwide, the total number of
housing sales in 2012 rose to its highest level in five years (NY Times,
1/23/13.) Although Martha’s Vineyard is a sought after destination with a
limited number of properties, we are inextricably connected to the world around
us and have felt the impact of the national economic situation over the past
four years. As the country’s economy slowly recovers, we see the positive
effects on the island’s real estate market. 2012 was a solid year that pulled
us up from the dismal performance of the Martha's Vineyard real estate market
Although inventory is starting to
decline and activity is picking up, these trends are tempered by prices that
remain well below the highs of 2005-2007.
These adjusted prices continue to offer value for buyers while sellers
can take encouragement from the increase in sales activity and the lowered
What will 2013 look like? Will a
continued reduction in inventory affect prices and the number of transactions
on Martha's Vineyard in 2013? How will other national and world events affect
our local economy? The New York Times
observes that, nationwide, "most economists say that home sales are
improving steadily and that the gains should continue this year." They
write that "stable hiring, record-low mortgage rates and a tight supply of
homes available for sale have helped increase sales and prices in most
markets." (1/23/13). Housing
economist Robert J. Shiller has sounded
a cautionary note, pointing out that "most experts are not predicting any
big change in home prices" but rather "forecasting modest increases
for the next half-decade, implying inflation-adjusted price growth of 1 to 2
percent a year." He distinguishes
modest growth from the speculative housing boom that the nation experienced
from 1997 to 2006 and writes that "while we can't rule out another boom....I
wouldn't put any money on that."
We at Tea Lane
look to 2013 with enthusiasm. We
are hopeful that our 2012 activity level can be sustained, but also believe
that the pace of this upturn in the Vineyard market will likely be slow and
gradual. We are cautiously optimistic about the year ahead for buyers and
Source: LINK and www.masslandrecords.com
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.
- Tea Lane Associates was involved in 48% of all Chilmark transactions and
32% of all up-island transactions. These transactions accounted for 49% of the
total dollar volume of all Chilmark sales and 32% of the total dollar volume of
all up-island transactions.
- We sold property in every town on Martha's Vineyard (Edgartown, Oak
Bluffs, Vineyard Haven, West Tisbury, Chilmark, Aquinnah) with a range of
prices from $300,000 for a beach lot to $6,000,000 for a waterfront home.
- We represented the buyer and seller for the second highest priced
sale in Chilmark and the buyer for the second highest priced sale in
Aquinnah. We were involved in 4 out of 8
Chilmark sales over 3 million dollars in 2012 (50%).
-We represented the owner of Thimble Farm and were the broker of record for
its sale to Island Grown Initiative, a non-profit which will preserve this
agricultural land for the Vineyard community for years to come.