The Vineyard real estate market showed resilience in the third quarter, with prices rising even as sales dropped and inventory rose.
Island observers further said the Vineyard market continues to show more strength than the mainland.
If you were a seller on the Island, you waited longer to sell your home but got a payoff if you did sell. Vineyard home sale prices climbed nearly 18 per cent in the three months ending Sept. 30, according to figures provided by LINK, an Island real estate data reporting company.
Home values fluctuated wildly on the Vineyard compared with third quarter 2006.
The median home sale price in Tisbury rose 11 per cent and declined more than 14 per cent in Edgartown. Values in Oak Bluffs declined a fraction of one per cent.
Chilmark median home prices doubled to $5 million on a very small base of sales and West Tisbury’s median price increased to $1.5 million, also on a small sales base. Aquinnah recorded no home sales.
The median sale price in Edgartown was up to $950,000 on 29 home sales and was $5 million in Chilmark on three sales, $528,750 in Oak Bluffs on 16 sales and $930,000 in Tisbury on 18 home sales.
Across the Island, the number of home sales declined more than 19 per cent from the third quarter of 2006 to 71.
The number of homes sold increased 10 per cent in Edgartown, nearly 30 per cent in Tisbury and declined by a third in Oak Bluffs from 24 sales in third quarter 2006 to 16 sales this year. Chilmark had five sales this past quarter compared with 15 a year ago and West Tisbury had three sales compared with eight sales in the same period a year ago.
The residences that sold had been on the market between six months in Oak Bluffs and nearly 18 months in Chilmark. Edgartown homes that sold had been on the market for eight months; in Tisbury, 13 months.
LINK owner Eleanor Wilson cautioned that days on market may be misleading compared with national averages since Island days on market begin with listing of the property and the general real estate rule is that days on market begins with a purchase-and-sale agreement being signed, often well after the listing date.
The Island property inventory of 648 stood at the highest level in nine years, nearly 40 per cent higher than the average of 2003-2005, but less than four per cent higher than the third quarter of 2006.
Property inventory includes homes, land, condos and commercial buildings. Homes typically account for about 70 per cent of all properties.
Realtors, bankers and Ms. Wilson were satisfied that the Island market is healthy but slower. They accept the idea that Island real estate business is different from the norm and most are grateful this year.
Realtors reported that advance 2008 summer rentals were unusually busy. Several reported that August was already fully booked for some of their listings. That’s good news to Patty Kendall of Kendall and Kendall.
“This is largely a second-home market and a substantial number of home sales are to former renters,” Ms. Kendall said. “We cycle (the renters turned buyers) every few years and we’re in a new period. I’m seeing new renter faces.”
At Hob Knob Realty, broker Suzanne Lanzone is working on three closings in the next 45 days and one more scheduled for January. Ms. Lanzone has noted some drag in the market but the bottom line is fine, she said.
“I did a little better this year,” Ms. Lanzone said. “I usually sell between seven and 10 homes a year and it looks like I’ll sell 10 this year.”
A later season start and unsettling real estate and stock market news in early summer slowed activity a bit but August was on schedule, Ms. Lanzone said.
She noted stronger international interest in Island home ownership, particularly from French and German buyers whose euro currency is stronger than the dollar.
The high-end market, $3 million dollars and up, continued to be immune from economic indicators. Realtors said the middle and lower end ($500,000 to $1 million) is where pricing needs to be sharp and buyers need to be found.
Island bankers report that mortgage money and deposits were strong and the fourth quarter looks stronger than normal, adding credence to the idea that the season has lengthened because of the wait-and-see attitude among buyers.
“The question is not that homes aren’t selling, it’s that people are not looking,” said Bob Priore, president of R.J. Priore Co. in Oak Bluffs.
Mr. Priore recounted that a real estate auction in Boston recently had three bidders for a Vineyard Haven property, originally valued at $800,000, opening at $300,00 and finally selling at $500,000.
“There were only three bidders and one of them was my son,” he said. Mr. Priore has seen every market on the Vineyard in his 35 years and he believes change will come eventually.
“I can’t tell you why buyers aren’t interested,” he said. “They are making money, employment is strong but when relief comes, there’s pent-up buying. There’s a lot of money out there.”
Alan Schweikert, owner of Ocean Park Realty in Oak Bluffs, also takes the long view. He believes relief will come in four or five months “when the market gets cleaned up. There are still some sub-prime mortgages to come home to roost. The second quarter was good, things slowed in the third, some sales but lack luster.
“One thing that affected us in Oak Bluffs was that a lot of past buyers in the $450,00 to 6500,00 range, maybe 35 per cent, were getting 90 and 100 per cent financing,” he said. “Many of them didn’t need it but took it. That kind of financing isn’t available now.”
Mr. Schweikert, Mr. Priore and Ms. Lanzone agree that the Island has long-term advantages for buyers, sellers and realtors.
“There is only one Martha’s Vineyard. They’re not making any more of them,” Ms. Lanzone said.
“It’s an inelastic supply,” Mr. Schweikert noted.
“If you don’t have to sell, you’ll never lose money [in real estate] on the Vineyard,” Mr. Priore said.