After a turbulent decade in the housing market, the Martha’s Vineyard Land Bank is reporting a second relatively flat year of revenue, perhaps indicating that the market is climbing onto steadier ground.
Land bank executive director James Lengyel said this week that revenues are expected to be down about seven per cent for fiscal year while transactions are up about three per cent.
“The numbers speak for themselves,” Mr. Lengyel said, calling them “essentially flat.”
The fiscal year ends Saturday.
Land bank funds come from a two per cent transfer fee on most real estate transactions here, and provide a glimpse of the health of the Island real estate market. Mr. Lengyel said the land bank considers revenue changes of less than 10 per cent, and transaction changes of less than five per cent, to be statistically flat.
The land bank expects to end the fiscal with about $7.2 million in revenue down about half a million dollars from last year’s total of $7.7 million. The number of transactions, however, rose slightly, from 1,228 to 1,262.
Mr. Lengyel noted that across the board, year-end data appears to follow averages from the last ten years.
He said the mean revenue for qualifying transactions — in short, the average amount the land bank received from transactions, not including some outlying purchases, like time shares and first time homeowners — provides a look at how revenue has plateaued. The mean amount has hovered around $17,000 for the last three and a half fiscal years, except for a bump to $21,555 in the first half of 2010.
The mean revenue from qualifying purchases was $17,536 in the first half of the last fiscal year, and $17,756 in the second half, from January to June.
The land bank also divides the housing market into three sectors: transactions less than $500,000, transactions between $500,000 and $1 million, and transactions of $1 million or more.
Those numbers, too, “are pretty average” this year, Mr. Lengyel said. About half of all transactions came in the lowest group, with the remainder of the sales pretty evenly divided between the other two sectors; 28 per cent fell in the middle category, and 22 per cent were above $1 million. This is about on par with trends going back to 2009.
A look at revenue and transactions going back to fiscal year 2000 shows the rise and decline of the real estate market. Land bank revenues peaked in 2006, with nearly $13 million coming in. Three years later, revenue had fallen to about $5.8 million, before rebounding in 2010 back up to $7.6 million.
The number of transactions has also been on the decline throughout the decade, starting with 2,031 in 2000. Fiscal year 2011 had the fewest transactions in the last 12 years, with 1,228, and 2012 was just slightly higher, with 1,262 transactions.
Though there wasn’t much of a change, the end of the numbers were “happy news from the land bank’s perspective,” Mr. Lengyel said. The first two quarters of the fiscal year were “extremely slow,” he said, which might have indicated an end-of-the-year report of substantially decreased revenue.
Regardless, though, Mr. Lengyel said the land bank is still operating on a reduced budget and has cut spending and is not taking on new properties. In the last year, the land bank made a few purchases, Mr. Lengyel said: an acre of land near the historic clay cliffs in Aquinnah was purchased in October for $220,000, and 41 acres were purchased in Edgartown in March. The land bank also acquired several small partial interest properties.
“We’re not in the position to look at anything new that is significant,” he said.