Greetings from Martha’s Vineyard!
Spring has arrived on the Island and summer is not far away. As our society regains a sense of normalcy, the Island is awakening with eager anticipation for the return of the season and her patrons!
The mild winter weather experienced across much of the south coast of New England, coupled with the steady creep in mortgage interest rates and an exceedingly low level of inventory, have all contributed to some quick and successful transactions early this year. Those of us in the industry typically speculate during the early spring about how many units may arise—and from which market segments new inventory may emerge—to help replenish the high rate of consumption we’ve experienced over the past several seasons. Since many otherwise prospective sellers have been using their Island homes as COVID havens, there has been a significant decrease in potential inventory stock that might normally have been made available. This is not an atypical condition that’s unique to Martha’s Vineyard, as the entire country is experiencing an inventory deficit. But the heightened demand has continued to outpace available supply on-Island, which has contributed to elevated pricing.
Given that our customary “spring market” activities have begun, it is significant that inventory remains at multi-decade lows. And this condition appears likely to continue for awhile, particularly given that an island has a finite number of channels available for replenishment.
As the closing months of 2021 proved, the First Quarter median and average sales prices have become directly correlated with the characteristics found within the current inventory. The continued increase in asking and sales prices is a direct reflection of the current inventory scarcity. And no market segment is insulated from this dynamic.
For your review and analysis, here are the meaningful and sometimes surprising statistics from First Quarter 2022 activity:
Last year at this time, there were only 82 total residential units listed for sale. As of this writing, there are 114. As discussed, there likely will be some new listings forthcoming as part of the “spring market.” But the spring selling season has already begun—and new listing activity for resale has been slow and sporadic to date.
A total of 81 residential properties were sold among the Island towns within the First Quarter, which is 29% less than were sold a year ago for the same period. Home sales were transacted across the Island as follows: Edgartown-33, Oak Bluffs-20, Vineyard Haven-16, West Tisbury-6, Chilmark-5, and Aquinnah-1.
Median sales prices on-Island for Q1 again increased 13% from $1.196M to $1.350M compared to the same period in 2021, with average prices also increasing another 22% from $1.731M to $2.115M during the same period. Average residential property sales have thus far captured 98.1% of their final asking prices and garnered on average 172% of their respective tax assessments.
Some customers and clients of our agency have suggested that we are now in a “real estate bubble,” which is understandable given the recent appreciation we’ve realized. However, the current market conditions do not at all resemble the poor health of the credit markets or existence of toxic lending practices that contributed to the Great Recession of 2008–2009. Rather, the current market is suffering from the simple effects of low supply and high demand, which, for a small finite market like Martha’s Vineyard, will take longer to normalize than off-Island. Therefore, this factor will allow prices to remain elevated but stable until there is greater supply in the marketplace, and that will take time.
The group of buyers interested in acquiring property on Martha’s Vineyard is significant. And there are many prospective buyers who are willing and able, just eagerly waiting for an opportunity to present itself. So being informed and prepared with all offer documents “trigger ready” for submission is critical within this competitive environment. The better priced, well-conditioned properties are almost guaranteed to receive multiple bids within days of being listed for sale. Many buyers are now waiving most typical purchase contingencies, and some are employing escalator clauses. So, offer strategies have dramatically changed in a short period too. Please contact one of our agents to help you navigate these changing waters in buying property on the Vineyard.
Summer is coming to the Vineyard. Please visit www.mvlandmarks.com to view a comprehensive list of all available Island properties for sale. And as always, do not hesitate to contact us with your questions concerning properties of interest, and Martha’s Vineyard real estate concerns in general.