The end of the year is often an occasion for quiet time and contemplation, when many Islanders redirect their lives and energies to family gatherings either at home or away. But late December this year was far from tranquil for real estate brokers, attorneys, appraisers, land surveyors, bankers and other professionals who handle the many steps involved in the sale and transfer of real property. The market for real estate was hit by a sudden burst of activity, fueled by impending changes in the federal tax code.
The final numbers are still being tallied, but when it all came to an end on Monday, the last day of the year, nearly three hundred real estate transactions had been recorded in a short period of two weeks. The flurry of activity brought a welcome windfall to the Martha’s Vineyard Land Bank which collected some two million dollars in revenue. That is a substantial boost to land bank coffers for the year.
Among the properties that changed hands was the Vose estate in Edgartown’s Tower Hill neighborhood, which has been in the family since it was purchased in 1903 by Julien W. Vose, founder of Edgartown National Bank. The historic Vose boathouse will remain in the family, but the waterfront home was sold for twelve and a half million dollars
Professionals say there were two unrelated factors involved in this year-end flurry. Estate tax increases expected to take effect in the new year prompted many Islanders with family-held properties to make transfers, mostly within their families, in order to avoid a higher tax down the road. And with all eyes on Washington lawmakers as they churned far too close for comfort to the precarious fiscal cliff, there was a burst of activity in arm’s length sales as well. Uncertainty over possible increases in the capital gains tax apparently led many sellers to push to close on property deals before the end of the year.
In terms of broad trends, most agree this burst of activity does not represent a significant upturn in the real estate market which has been lackluster in recent years, a bellwether of the overall economic recession. But real estate professionals say there was some improvement in the market during 2012. Close to twenty per cent more transactions were recorded through November compared to the previous year and an uptick in the number of people looking for Island homes. Home sales, especially at the lower end of the price spectrum, seem to have been encouraged by historically-low mortgage interest rates.
And although there is no hard data to support it, it does appear that today’s home buyers on the Vineyard are purchasing houses because they love the Island and want to spend time here, not simply as an investment. That’s a good thing for the community.
Vineyard real estate is a precious and finite commodity. And behind every real estate sale is a human story, of a person, a family, an Island connection tethered to the land. And they’re not making any more of it, the old saying goes.
Whatever the causes of the latest real estate boomlet, it has been a welcome boon to the land bank, which for more than twenty-five years has been using the proceeds from a two per cent fee on most real estate transactions to buy public conservation land on the Vineyard. In times of recessions, the land bank carefully husbands its resources and buys few properties, which has been the case in recent years. We expect that will continue to be the case in the near future.
Perhaps the year-end uptick in revenues will translate to another green and white land bank signpost planted on some beautiful spot on the Vineyard. That would be a great way to start the new year.