MV 2014 Year-End Market Review
We seem to be swirling in an eddy as the market possibly shifts from a buyer’s market to a seller’s market again. Average prices have remained flat over the past three years while the peak inventory levels fell significantly from ’11 to ’12 to ‘13 and then remained flat from 2013 to 2014. This decrease in inventory began to put pressure on prices in 2014 but with inventory remaining flat in 2014, this pressure on buyers is not intensifying for the time being.
While the above statistics include all transactions and represent island-wide performance, individual towns and market segments reveal different dynamics in 2014. Martha’s Vineyard is an island with six towns, each with its own character and specific market conditions. Within each town there are different niches as well…waterfront, water view, high-end, mid-range, entry level and commercial properties. Because each of these market segments can be, on its own, very small, generalizing trends or making broad statements is difficult.
Up-Island
Chilmark experienced a 16% increase in the number of transactions (from 32 in 2013 to 37 in 2014), a 39% increase in total dollar volume (from $40mm in 2013 to $55mm in 2014) and an average price increase of 20% (from $1.24mm in 2013 to $1.49mm in 2014). 2014 was a healthy year for Chilmark. The increases can be attributed to the return of Chilmark’s mid-market ($1.5-3.0mm) in 2014. There were over twice as many sales in this middle range, from 6 in 2013 to 13 in 2014.
The high end Chilmark market remains quiet with just two transactions over $3m in 2013 and two in 2014 as well. However, it is interesting to note that there was a $7.8mm sale in Chilmark in 2014 which is the highest sale since 2011. This small high end market is driven by unique properties where just a few sales make an impact.
It is important to note that the average Days On Market for the properties that sold in Chilmark fell dramatically in 2014 from 622 days in 2013 to 347 in 2014. This is closer to the island-wide average of 283 days and means that the Chilmark market is no longer holding old inventory like it was in years past. This could be another sign that the market has adjusted to its new position, post-recession, and is moving forward with properties priced for current market conditions.
Aquinnah was the big winner in 2014 with a 79% increase in the number of transactions, growing from 11 in 2013 to 19 in 2014. The total dollar volume for Aquinnah in 2014 rose 81% from $10.7mm in 2013 to $19.3mm in 2014. Average price in Aquinnah was up 5% to $1.018mm (from $969k in 2013). In this small market, just a few sales make a huge difference in market performance, and in 2014 all segments (entry, mid, and high-end) had a few more sales than typical for this market, resulting is a very strong year for the town.
West Tisbury had a slow year and experienced an 11% decrease in the number of transactions from 54 in 2013 to 48 in 2014. Again, this is a small market and the difference of six sales is not much but the dollar volume tells more of a story. Total dollar volume fell 30% (from $56mm in 2013 to $39mm in 2014). There was a 21% decline in average price (from $1.04mm in 2013 to $820,000 in 2014) and an 11% decline in median price (from $640,000 in 2013 to $568,000 in 2014). This downturn was driven by slower sales in the mid and high-end range in West Tisbury. In 2013 and 2014, there were essentially the same number of sales under $1mm (38 in 2013 and 37 in 2014) but 2014 saw only 11 sales over $1mm, with only six in the $1-2mm range. In 2013 there were 18 sales over $1mm and ten in the $1-2mm range. For sales over $2mm in West Tisbury, there were 5 in 2014 versus 8 in 2013.
Down-Island
The three down-island towns of Vineyard Haven, Edgartown and Oak Bluffs experienced mixed results in 2014.
Edgartown had a significant decline of 20% in number of transactions (from 184 in 2013 to 148 in 2014) and a 13% decrease in total dollar volume (from $233mm in 2013 to $191mm in 2014) resulting in an increase of 5% in the average price from $1.21mm in 2013 to $1.29mm in 2014. The slowdown in transactions in 2014 was due to a lagging lower end of the Edgartown market. Of the 36 fewer sales in 2014, 32 of them were missing from sales below $1.5mm. So the mid and high-end markets held relatively steady in 2014 and Edgartown had the highest sale on the island in 2014 at $15,000,000.
Vineyard Haven had a stable year with a 3% increase in the number of transactions from 101 in 2013 to 104 in 2014 and an increase in dollar volume of 9% from $84mm in 2013 to $92mm in 2014, which drove up average price by 6% from $831k in 2013 to $881k in 2014. The rise in dollar volume was driven by the mid-range. There were 11 sales in the $1.5-3mm range in Vineyard Haven in 2014 compared to just 4 in this range in 2013.
While Edgartown experienced a decline in 2014 and Vineyard Haven remained flat but featured stronger mid-level sales, Oak Bluffs had impressive gains. The number of transactions in Oak Bluffs grew 32% from 2013 to 2014 (from 120 in 2013 to 158 in 2014) and a 51% increase in total dollar volume (from $59mm in 2013 to $90mm in 2014). The average price rose 15% from $494k in 2013 to $568k in 2014.
Entry Level Sales
2014 had 27 more sales under $1mm than in 2013. 2013 had been the first year since the great recession hit in 2008 that it became more difficult to enter the Martha’s Vineyard real estate market, but it got a little easier to enter the market in 2014. The annual number of sales under $1mm rose every year from 2008 (227 sales) to 2012 (385 sales) but in 2013, this trend shifted and the number of sales under $1mm decreased to 358. In 2014 this number bounced back to 385. Foreclosures have had a major impact on the number of sales under $1mm in the past few years but fortunately the number of foreclosures dropped dramatically in 2013 (down 53% from 58 in 2012 to 27 foreclosures in 2013) and again in 2014 with the number dropping to just 15. Therefore, it was natural market forces, not foreclosure sale pricing, that drove the shift back toward easier entry into the market in 2014.
High-End Sales
The high-end segment of the market grew from 22 sales over $3mm in 2013 to 25 sales over $3mm in 2014. After a quiet year in 2013 in the over $10mm range, this segment returned with just one sale in 2014. During the peak years of 2005-2007, there was an average of 5 sales per year in the segment over $10mm. However, overall since the 2008 downturn, 2014 is tied for second place in the number of transactions over $3mm which is encouraging for the health of this high-end segment. Sales in the high-end segment over $3mm represented 25% of the total dollar volume of the market in 2014 versus 22% in 2013 (see our chart below for more details).
Commercial Transactions
The sale of commercial properties bounced back in 2014 to 22 transactions (up from 12 transactions in 2013, and 20 in 2012). The average price of a commercial transaction was $1,840,000 in the years 2005-2008. Average price declined from 2008 to the low of $749,000 in 2011. 2012 and 2013 saw an increase in the average price of commercial real estate but 2014 bucked this trend with a decline in average price to $833,000 (down from $989,000 in 2013). The largest commercial real estate transaction in 2014 was the sale of Fishbones Grill plus 14 retail shops and a dock on the Oak Bluffs Harbor for $4.0mm.
Conclusion
On a national level, the end of the recession has officially been declared. On the island, we feel the positive effects as stability in our real estate market and the potential for growth again.
Although the Martha's Vineyard market overall grew slightly in 2014, we cautiously observe that the two indicators that the market was shifting in 2013 told a different story in 2014: 1) peak inventory levels stopped falling and remained flat in 2014, and 2) 2014 saw fewer sales over $1mm than in 2013. This picture tells us that prices still remain well below the highs of 2005-2007 and these adjusted prices continue to offer value for buyers.
What will 2015 bring? Will the Martha’s Vineyard real estate market sustain its level of activity again or perhaps grow more strongly? How will other national and world events affect our local economy?
With the lack of a major new flash this year, the stability of the market is the real story here. For three years now, the market has remained stable and healthy with slight growth in 2014. This hint of growth in the Martha's Vineyard real estate market indicates not a dramatic uptick next year, but most likely the same solid, slow growth in for the near future. We remain optimistic about the year ahead for buyers and sellers alike.
Martha's Vineyard 2014 Market Review
The real estate market on Martha’s Vineyard grew very modestly in 2014. Compared to 2013, the number of properties sold in 2014 increased 2.4% to 514, total dollar volume increased similarly 2.9% to $486mm, and average sales price rose just 0.5% to $946,000.
2014 marks the third consecutive year at this same level of activity and investment. This stability confirms this market’s recovery from the recession in 2008 which produced a gradual downturn followed by erratic results in the following years. While some primary home markets in the U.S. have seen heated activity over the past two years, Martha's Vineyard, a vacation destination, has had a different experience but does continue to maintain the activity levels of 2012 and 2013 and shows modest growth in 2014. Last year we predicted a “slow but steady recovery now consolidated over two years.” 2014 performance keeps us on this track for the third year running.
2014 marks the third consecutive year at this same level of activity and investment. This stability confirms this market’s recovery from the recession in 2008 which produced a gradual downturn followed by erratic results in the following years. While some primary home markets in the U.S. have seen heated activity over the past two years, Martha's Vineyard, a vacation destination, has had a different experience but does continue to maintain the activity levels of 2012 and 2013 and shows modest growth in 2014. Last year we predicted a “slow but steady recovery now consolidated over two years.” 2014 performance keeps us on this track for the third year running.
We seem to be swirling in an eddy as the market possibly shifts from a buyer’s market to a seller’s market again. Average prices have remained flat over the past three years while the peak inventory levels fell significantly from ’11 to ’12 to ‘13 and then remained flat from 2013 to 2014. This decrease in inventory began to put pressure on prices in 2014 but with inventory remaining flat in 2014, this pressure on buyers is not intensifying for the time being.
While the above statistics include all transactions and represent island-wide performance, individual towns and market segments reveal different dynamics in 2014. Martha’s Vineyard is an island with six towns, each with its own character and specific market conditions. Within each town there are different niches as well…waterfront, water view, high-end, mid-range, entry level and commercial properties. Because each of these market segments can be, on its own, very small, generalizing trends or making broad statements is difficult.
Up-Island
Chilmark experienced a 16% increase in the number of transactions (from 32 in 2013 to 37 in 2014), a 39% increase in total dollar volume (from $40mm in 2013 to $55mm in 2014) and an average price increase of 20% (from $1.24mm in 2013 to $1.49mm in 2014). 2014 was a healthy year for Chilmark. The increases can be attributed to the return of Chilmark’s mid-market ($1.5-3.0mm) in 2014. There were over twice as many sales in this middle range, from 6 in 2013 to 13 in 2014.
The high end Chilmark market remains quiet with just two transactions over $3m in 2013 and two in 2014 as well. However, it is interesting to note that there was a $7.8mm sale in Chilmark in 2014 which is the highest sale since 2011. This small high end market is driven by unique properties where just a few sales make an impact.
It is important to note that the average Days On Market for the properties that sold in Chilmark fell dramatically in 2014 from 622 days in 2013 to 347 in 2014. This is closer to the island-wide average of 283 days and means that the Chilmark market is no longer holding old inventory like it was in years past. This could be another sign that the market has adjusted to its new position, post-recession, and is moving forward with properties priced for current market conditions.
Aquinnah was the big winner in 2014 with a 79% increase in the number of transactions, growing from 11 in 2013 to 19 in 2014. The total dollar volume for Aquinnah in 2014 rose 81% from $10.7mm in 2013 to $19.3mm in 2014. Average price in Aquinnah was up 5% to $1.018mm (from $969k in 2013). In this small market, just a few sales make a huge difference in market performance, and in 2014 all segments (entry, mid, and high-end) had a few more sales than typical for this market, resulting is a very strong year for the town.
West Tisbury had a slow year and experienced an 11% decrease in the number of transactions from 54 in 2013 to 48 in 2014. Again, this is a small market and the difference of six sales is not much but the dollar volume tells more of a story. Total dollar volume fell 30% (from $56mm in 2013 to $39mm in 2014). There was a 21% decline in average price (from $1.04mm in 2013 to $820,000 in 2014) and an 11% decline in median price (from $640,000 in 2013 to $568,000 in 2014). This downturn was driven by slower sales in the mid and high-end range in West Tisbury. In 2013 and 2014, there were essentially the same number of sales under $1mm (38 in 2013 and 37 in 2014) but 2014 saw only 11 sales over $1mm, with only six in the $1-2mm range. In 2013 there were 18 sales over $1mm and ten in the $1-2mm range. For sales over $2mm in West Tisbury, there were 5 in 2014 versus 8 in 2013.
Down-Island
The three down-island towns of Vineyard Haven, Edgartown and Oak Bluffs experienced mixed results in 2014.
Edgartown had a significant decline of 20% in number of transactions (from 184 in 2013 to 148 in 2014) and a 13% decrease in total dollar volume (from $233mm in 2013 to $191mm in 2014) resulting in an increase of 5% in the average price from $1.21mm in 2013 to $1.29mm in 2014. The slowdown in transactions in 2014 was due to a lagging lower end of the Edgartown market. Of the 36 fewer sales in 2014, 32 of them were missing from sales below $1.5mm. So the mid and high-end markets held relatively steady in 2014 and Edgartown had the highest sale on the island in 2014 at $15,000,000.
Vineyard Haven had a stable year with a 3% increase in the number of transactions from 101 in 2013 to 104 in 2014 and an increase in dollar volume of 9% from $84mm in 2013 to $92mm in 2014, which drove up average price by 6% from $831k in 2013 to $881k in 2014. The rise in dollar volume was driven by the mid-range. There were 11 sales in the $1.5-3mm range in Vineyard Haven in 2014 compared to just 4 in this range in 2013.
While Edgartown experienced a decline in 2014 and Vineyard Haven remained flat but featured stronger mid-level sales, Oak Bluffs had impressive gains. The number of transactions in Oak Bluffs grew 32% from 2013 to 2014 (from 120 in 2013 to 158 in 2014) and a 51% increase in total dollar volume (from $59mm in 2013 to $90mm in 2014). The average price rose 15% from $494k in 2013 to $568k in 2014.
Entry Level Sales
2014 had 27 more sales under $1mm than in 2013. 2013 had been the first year since the great recession hit in 2008 that it became more difficult to enter the Martha’s Vineyard real estate market, but it got a little easier to enter the market in 2014. The annual number of sales under $1mm rose every year from 2008 (227 sales) to 2012 (385 sales) but in 2013, this trend shifted and the number of sales under $1mm decreased to 358. In 2014 this number bounced back to 385. Foreclosures have had a major impact on the number of sales under $1mm in the past few years but fortunately the number of foreclosures dropped dramatically in 2013 (down 53% from 58 in 2012 to 27 foreclosures in 2013) and again in 2014 with the number dropping to just 15. Therefore, it was natural market forces, not foreclosure sale pricing, that drove the shift back toward easier entry into the market in 2014.
High-End Sales
The high-end segment of the market grew from 22 sales over $3mm in 2013 to 25 sales over $3mm in 2014. After a quiet year in 2013 in the over $10mm range, this segment returned with just one sale in 2014. During the peak years of 2005-2007, there was an average of 5 sales per year in the segment over $10mm. However, overall since the 2008 downturn, 2014 is tied for second place in the number of transactions over $3mm which is encouraging for the health of this high-end segment. Sales in the high-end segment over $3mm represented 25% of the total dollar volume of the market in 2014 versus 22% in 2013 (see our chart below for more details).
Commercial Transactions
The sale of commercial properties bounced back in 2014 to 22 transactions (up from 12 transactions in 2013, and 20 in 2012). The average price of a commercial transaction was $1,840,000 in the years 2005-2008. Average price declined from 2008 to the low of $749,000 in 2011. 2012 and 2013 saw an increase in the average price of commercial real estate but 2014 bucked this trend with a decline in average price to $833,000 (down from $989,000 in 2013). The largest commercial real estate transaction in 2014 was the sale of Fishbones Grill plus 14 retail shops and a dock on the Oak Bluffs Harbor for $4.0mm.
Conclusion
On a national level, the end of the recession has officially been declared. On the island, we feel the positive effects as stability in our real estate market and the potential for growth again.
Although the Martha's Vineyard market overall grew slightly in 2014, we cautiously observe that the two indicators that the market was shifting in 2013 told a different story in 2014: 1) peak inventory levels stopped falling and remained flat in 2014, and 2) 2014 saw fewer sales over $1mm than in 2013. This picture tells us that prices still remain well below the highs of 2005-2007 and these adjusted prices continue to offer value for buyers.
What will 2015 bring? Will the Martha’s Vineyard real estate market sustain its level of activity again or perhaps grow more strongly? How will other national and world events affect our local economy?
With the lack of a major new flash this year, the stability of the market is the real story here. For three years now, the market has remained stable and healthy with slight growth in 2014. This hint of growth in the Martha's Vineyard real estate market indicates not a dramatic uptick next year, but most likely the same solid, slow growth in for the near future. We remain optimistic about the year ahead for buyers and sellers alike.
Tea Lane 2014 Year-End Highlights
Tea Lane Associates was involved in the highest priced sale in three of the six island towns in 2014: Chilmark ($7,800,000), Vineyard Haven ($4,000,000) and Aquinnah ($3,025,000). In Aquinnah, Tea Lane represented buyers and/or sellers in the four highest priced transactions ($1,850,000-$3,025,000).
Tea Lane Associates' sales represented 10% of total dollar volume of all sales on Martha's Vineyard. Tea Lane was involved in 6% of all transactions on the island.
Tea Lane Associates' up-island sales represent 33% of total dollar volume of all sales in West Tisbury, Chilmark and Aquinnah. Tea Lane was involved in 23% of up-island transactions.
Tea Lane Associates' Chilmark sales represent 45% of total dollar volume of all sales in Chilmark. Tea Lane was involved in 23% of all Chilmark transactions.
Tea Lane Associates sold property ranging from $203,000 for a commercially zoned land parcel to $7,800,000 for a residential estate property.