The State of the Vineyard Market

The word on the street regarding the Island’s current real estate sales market is “cautiously optimistic.” While we may not soon see a return to the boom times of five-plus years ago, Vineyard real estate professionals report that the market is definitely trending up.
“The market is healthy compared to 2009,” says Meg Bodnar, a sales associate at Tea Lane Associates of West Tisbury and Chilmark. In fact, she says, three of her last five sales transactions resulted in bidding wars.

“Fragile,” counters Lisa Stewart, owner of Lighthouse Properties in Oak Bluffs. While she too observes a “much more upbeat” market with increased activity, she is wary of the effect of unpredictable economic conditions and world events on buyers’ decisions to purchase.
Sean Federowicz, owner of Coldwell Banker Landmarks Real Estate in Vineyard Haven, echoes his colleagues’ thoughts and adds: “Buyers are moving very deliberately through the decision-making process. They are looking and looking.”

As for summer projections, these Island agents remain hopeful. “We’re tracking ahead of last year’s sales volume,” says Sean. “I’m anticipating modest improvement.” Meg concurs, adding: “Prices are still softer than sellers would like but there is increased activity.”

Lisa believes a little attitude adjustment from both buyers and sellers will accelerate summer sales: “Many sellers don’t really have to sell,” she explains. “They enjoyed fast market appreciation and accumulated a lot of equity. Many buyers, however, seem to feel that every seller has to sell. They’ll have to meet somewhere in the middle.”

Q:  How do I know if the market has hit bottom and if this is the right time to buy?

A:  Meg Bodnar, Tea Lane Associates: It seems like we’re having a very gradual, healthy recovery process from 2009, which appears to have been the bottom. Nobody knows for certain but if you’re buying a long-term investment and plan to hold it for ten to twenty years, there are great opportunities.

Sean Federowicz, Coldwell Banker Landmarks: We typically have a seven- to eight-year bull run, then a two- to three-year correction. Consumer confidence is returning and we’ve had a good start to 2011. You’ll still find better deals right now than at the height of the market.
Lisa Stewart, Lighthouse Properties: I don’t think the Vineyard market will go down any further, barring catastrophe. There are good values out there now. Buying and flipping a house now is not a good idea. If you need help covering the costs of taxes and maintenance, consider renting it during the summer and using it yourself during shoulder seasons.

Market at a glance

  • In 2010, residential real estate sales volume increased by about 30 percent, and average prices rose by 10 percent over 2009. The greatest volume of sales in 2010 was among houses priced less than $1 million. Sales at more than $1 million increased from 2009, but high-end sales (more than $10 million) remained slow.
  • With supply still far exceeding demand, the average time on market for most properties has increased to about one year.
  • As of March, a total of 330 single-family homes sold during the preceding twelve months, while about 400 remained on the market.
  • Mega pop star Lady Gaga is rumored to have purchased property on Chappy or in Chilmark – no one is telling. We can only speculate what effect this will have on Vineyard real estate values (not to mention the presence of paparazzi on-Island).

Statistics provided by Coldwell Banker Landmarks, Lighthouse Properties, and Tea Lane Associates.