Property Inventory Rises; Brokers See Slowdown
By JAMES KINSELLA
Gazette Senior Writer
More properties are coming onto the Vineyard real estate market,
dampening what had been an explosive increase in sales prices.
"Prices have continued to move up, but not as quickly as
sellers would like," said Jim Hogan of Tea Lane Associates in West
Tisbury, who has appraised and sold real estate on the Island for the
past 12 years.
src="http://www.mvgazette.com/news/2005/08/02/content/mcw_house_for_sale_sm.jpg" "There seems to be a normal number of buyers looking
around," Mr. Hogan said. "There's a slightly higher
inventory. Deals will be made at a smaller percentage of asking
price."
Whereas Tea Lane had been selling properties at 90 to 100 per cent
of asking price, Mr. Hogan expects deals in the coming months will be
made closer to 80 per cent of the asking price.
An increase in inventory and a slowdown in price appreciation is
revealed in the draft second-quarter numbers now being assembled by
LINK, a Vineyard Haven-based business that tracks market transactions.
By the end of the second quarter of the year, the three months ended
June 30, inventory of Vineyard properties with structures on them, such
as single-family homes and condominiums, rose 31 per cent over the same
period a year earlier, to 355.
Over the same three months, the sales of such properties on the
Vineyard dipped 8 per cent over the same period to 132.
Inventory of land over the same period rose 33 per cent to 84
parcels, while sales fell 31 per cent to 18.
Three Vineyard towns - Oak Bluffs, Vineyard Haven and
Edgartown - account for the bulk of sales of properties with
structures on them, according to LINK.
A comparison of the 2004 and 2005 numbers shows a flattening of the
market in Oak Bluffs, where the number of structure sales dropped from
45 to 41, and the median sales price dipped by $5,000 to $520,000.
A similar trend is revealed in Vineyard Haven, where the number of
structure sales rose from 31 to 32, and the median price rose six per
cent to $589,250.
In Edgartown, sales dropped sharply from 51 to 31, a drop of 39 per
cent, helping push the median price 25 percent higher from $590,000 to
$739,900.
In two of the three towns, median sales prices increased more
sharply from 2003 to 2004 than over the past year.
Between the second quarters of 2004 and 2005, the median shot up 41
per cent, or $155,000, in Oak Bluffs, and 38 per cent, or $154,000, in
Vineyard Haven.
In contrast, Edgartown saw similar price appreciation in each of the
two years, with the median rising 24 per cent or $116,000 between 2003
and 2004, and 25 per cent or $149,000 over the past year.
LINK owner Eleanor Wilson said structure sales for the Vineyard
overall slipped from 143 in the second quarter of 2004 to 131 in the
quarter ended June 30. In the same quarter five years ago, 162 structure
sales took place.
Neal Stiller, who has worked as a broker at Cronig's Real
Estate since 1982, said a number of Island residents may be thinking
that the market has peaked, leading them to put their properties up for
sale.
"We've gotten a tremendous buildup in inventory very
recently," Mr. Stiller said. "There's this very recent
trend of homes starting to fly in the door. People are thinking,
‘Get out while the getting's good.'
"We could be at the start of a new cycle, a trend
downward," said Mr. Stiller, who has worked in the Vineyard real
estate market since 1982.
Also, he said, LINK statistics show that most sellers are not
getting their full asking price. Of Vineyard structure and land sales
detailed by LINK in the final three months of 2004, Mr. Stiller said, 17
per cent went for full price or more.
But Alan Schweikert, a broker who has worked in the Vineyard market
since 1973, said the increased inventory in the Island market is being
met by increased demand.
"Properties, in terms of values, are increasing," said
Mr. Schweikert, the owner of Ocean Park Realty in Oak Bluffs.
"They've always gone up.
"I see more properties coming onto the market," he said.
"It's a very strong market. They're selling."
The Vineyard, he said, always is going to have enough demand for its
supply of property, especially since the Martha's Vineyard Land
Bank continues to buy private parcels for public ownership.
But Mr. Schweikert also said that properties must be priced properly
to sell. Given the good exposure that the Vineyard market gets and the
marketing activity of the Island's 60 or so real estate brokers,
Mr. Schweikert said, any property that sits longer than three to four
months is overpriced.
Mr. Hogan said Vineyard property owners need to remember that
they're selling something that many of their customers don't
need. Those customers, Mr. Hogan said, often aren't seeking a
primary home, but a second - or even third or fourth - home.
He said such buyers can wait. And if they sense a softening market,
they'll wait longer. Of course, he said, a sense that the market
is softening can lead to an actual softening, through a decrease in
demand and consequent price declines.
Mr. Stiller expressed some concern about the 100 per cent or higher
financing that he has seen on a number of Vineyard property sales.
Should the market turn down, he said, buyers might walk away, leaving
lenders holding the properties. Regulators will frown on lenders who own
houses, prompting them to sell rather than carry the houses.
Mr. Stiller said he believes a slowdown in Vineyard real estate is
due. "The market can only handle so much," he said.
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