Happy Fall to one and all. With this wonderful stretch of Indian Summer, it’s hard to believe we are nearly into mid-October. Summer was a delight this year with ample sunshine and favorable temperatures for the Island and her patrons to enjoy all that long, lazy, warm days bring.

Despite the early onset of mild temperatures, the local real estate market was slow to start this season. Fundamentally, not much had changed year-over-year in terms of the persistently tight inventory condition, relative competition for quality properties coupled with comparatively high mortgage rates. The Federal Reserve’s “tease” in suggesting that a timely interest rate reduction would be forthcoming during the late spring and early summer selling season did not materialize until just recently. In retrospect, this policy delay may have provided a cooling effect upon buyer behavior during our most active selling period as prospective buyers chose to hold off in making a commitment to purchase while the lending rates remained unattractive throughout the summer.

However, with the Fed’s interest rate cut in September and the subsequent effects on mortgage rates and buyer’s improved purchasing power, there appears to be a shift underway. It may be too late to make any meaningful impact on this year’s total transaction metrics, but lower rates could very well affect seller and buyer decisions for the 2025 Spring Market.

The annual consumption of residential property on-Island continues to outpace the replenishment rate during the past ten years. And this condition does not appear to quickly resolve itself since our natural channels of inventory re-stock come primarily from life events such as death, divorce, and family economics rather than from new construction efforts. Therefore, despite more attractive lending rates at present, sales prices are not expected to decline significantly anytime soon.

The waning weeks of September presented a few more listings that were activated to participate in our truncated, “fall market”. And while there are currently 208 residential properties currently available for sale Island-wide, which is up from 167 a year ago, pre-Covid would ordinarily have offered more than 250 available opportunities.

For sellers, market momentum has remained in their favor given the persistent low inventory condition. However, that should not embolden them to seek aggressive asking prices at resale. Candidly, the muted energy felt from prospective buyers this summer suggests a sense of fatigue toward the limited choices, premium asking prices, and undesirable lending rates. Mortgage lenders learned their lessons well from the last recession and have become highly vigilant with respect to appraisal and credit risk issues associated with purchase loans. But that isn’t to say that our micro-market activity was “dead”. Transactions still occurred this summer, albeit at a more tempered pace than in recent past seasons.

The exuberant excesses we recall from the last housing bubble are not present today, nor are the same contributing factors. However, location, amenities, condition and market segment will continue to be significant variables affecting pricing and the urgency to transact real estate on-Island.

Please consider the following;

• Year-to-date 188 residential properties have sold on Martha’s Vineyard, which is down almost 19% from the 232 sold for the sameperiod in 2023.
• Q3 alone conveyed 68 residential properties, which is also down 18% from the 83 sold in 2023 for the same period.
• Year-over-year median home sale prices have increased 4.4% from $1,400,000 to $1,462,000 with average home sales prices modestly increasing 1.3% from $2,094,000 to $2,122,000.
• On average, year to date home sales island-wide have transacted at 94.5% of their asking price while realizing 133% of their tax assessment. This correlation suggests that property sale prices still exceed the respective tax assessed values broadly throughout our micro-market and reflect the persistent scarcity of available properties to purchase.

Lastly, you are likely now familiar with the Department of Justice/National Association of Realtors lawsuit involving real estate agent compensation, and specifically Buyer Representation. This fundamental change in practice took effect nationwide on August 17th and caused some confusion and intrepidation among some prospective buyers. Largely, the status quo remains in the real estate transaction process, but to learn more about the NAR settlement and the new standards of practice in home buying/selling, please visit https://www.nar.realtor/the-facts/nar-settlement-faqs for more information.

Please visit www.mvlandmarks.com to view all available listings on-Island. And as always, do not hesitate to contact us with your questions and curiosities concerning those properties of interest and Martha’s Vineyard real estate topics in general.