The real estate market on the Vineyard appears to be showing signs of life, according to the most recent data from the Martha’s Vineyard Land Bank.
Land bank revenues are up for the first six months of the fiscal year, even though the number of sales remains relatively flat.
In the last fiscal year, land bank receipts, which come from a two per cent transfer fee on most real estate transactions on the Island, were up almost 30 per cent. At the midpoint of this year, they are on track for another rise of about 10 per cent, land bank executive director James Lengyel said this week.
However, the numbers are still well below those of the boom years of the mid-1990s.
The land bank tracks its revenues on both a fiscal and calendar year basis.
There are two factors to land bank revenues: the number of transactions and the amount received from each transaction. The key trend in the most recent figures, said Mr. Lengyel, is that the numbers are moving in different directions.
“It’s interesting; revenues are up 15 per cent; transactions are down about 10 per cent,” he said.
The only inference to be drawn was that prices have increased, Mr. Lengyel said.
“The energy is in the prices, not the transaction numbers,” he said.
The trend is a continuation from the last full fiscal year, in which land bank revenues increased 30 per cent, while transactions were up just three per cent.
Last year, FY 2010, there were 1,316 transactions, yielding $7.4 million. In the first six months of this year, there were 608 transactions, and revenue was more than $4.4 million.
By way of comparison, in the biggest of the boom years, fiscal year 2006, land bank revenues were almost $13 million on 1,551 transactions. The low point came in 2008, when the bank collected $9.6 million on 1,328 transactions.
“As of Dec. 31, revenues [for the first half of FY 2011] were $4,405,000. There were 608 transactions that gave rise to that figure,” Mr. Lengyel said.
“Last year for the same period, the numbers were $3,846,000, on 675 transactions.”
Furthermore, revenues from all sectors of the Vineyard property market were increasing at roughly the same rate, he said.
The land bank divides the market into three sectors: under $500,000; $500,000 to $1 million; and over $1 million.
Mr. Lengyel said the breakdown of revenue from each sector had remained pretty stable over the past three years.
“There are tiny fluctuations, but each of the sectors is pretty steady. That upper third provides in the vicinity of 54 per cent [of revenues]. The middle third provides around 24 per cent. And the lower third makes up around 20 per cent,” he said.
Mr. Lengyel said he was pleased with the outlook.
“We’re running ahead of our projections for this year,” he said.
“If you look at the past few years, we had a 50 per cent drop in our revenues from the peak down to our nadir.
“As recently as fiscal year 2009, there was a 40 per cent drop. In that one year. In 2009-10 there was a 30 per cent increase. This year we’re on track for at least a 10 per cent increase, I would think.”
And that gives the land bank more funds to buy conservation land, which is its mission chartered by an act of the state legislature 25 years ago.
The land bank manages its funds conservatively, so with revenues down in recent years it has not made a lot of purchases. In 2010 there were just two acquisitions, both open land on State Road, in Tisbury and West Tisbury.
“We now have, in unencumbered dollars — not set aside for debt repayment or anything else — about $10 million,” Mr. Lengyel said.
“That’s a sound figure in the situation. That can be used for any great opportunities that come down the pipe.”
And he hinted that such opportunities were already under discussion.
“I do expect that in a month or two you’ll be hearing of more deals,” Mr. Lengyel said.
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