The Island market has rocketed upward since the start of the pandemic, with dramatic sale price increases and broad reordering as urban buyers gravitate toward the Island.
The Vineyard real estate market, normally strong, has rocketed upward since the start of the pandemic, with dramatic sale price increases and broad reordering as urban buyers gravitate toward the Island, driving median home sales to all-time highs.
According to data compiled by LINK, the Island’s multiple-listings service, the Vineyard has seen new records for 2020 for median home sale prices in Edgartown, Oak Bluffs, Tisbury and West Tisbury, as well as record median land sale prices in Edgartown.
The Islandwide median land sale price of $550,000 is also a new record, according to LINK. And the Islandwide median home price has shot up from $875,000 in 2019 to a new record of $1,035,243 in 2020 — an 18 per cent increase.
“What’s really interesting to me is not necessarily the number of sales, but the difference in the median pricing,” said Eleanor Wilson, client services manager for LINK on the Island. “And that is the part is that is absolutely amazing to me.” Although those numbers can change as 2020 comes to a close, Debra Taylor, LINK’s president, said the current 18 per cent increase is unprecedented when compared with the two or three per cent increases of years past.
“I can’t stress enough how significant that increase is,” Ms. Taylor said. “We’ve never seen such a double-digit increase in the median selling price.”
Data from LINK also shows that the volume of home sales has increased by more than 10 per cent in 2020, and a large number of homes are under agreement, even as the Covid-19 crisis effectively shuttered the market for a month in mid-March and dozens of buyers walked out on sales. The quick realization that the pandemic was here to stay, allowing people to work from home and families to uproot their mainland lives, gave the Vineyard unique value and jolted the market out of its brief period of somnolence, according to LINK and Island brokers.
“It has made people refocus on buying, and not putting off their dream of owning on the Vineyard,” said third-generation up-Island broker Julie Flanders of Flanders Real Estate. “It has increased the volume of sales, and it has increased the sale price too at this point.”
Hesitant buyers finally had a reason to act when the pandemic hit — and for people with the money, the real estate market posed a possibly safer investment than the stock market, especially on the Island, brokers said.
“I am pleased that people see the Vineyard as a safe haven,” Ms. Flanders said. “For them personally, and for putting their money here too. We’re lucky to be in this situation.”
The increase in Vineyard home prices comes as real estate sales in Boston and other urban centers have seen dramatic decreases since the pandemic began. According to LINK data for Boston, that market saw a 47 per cent decrease in sales over the first two quarters of 2020, and a 64 per cent decrease in the luxury market, Ms. Taylor said.
“The news here isn’t that sales are up,” she said. “The news is that people are flocking here during a pandemic.”
Douglas Reece, a longtime broker who works with Re/Max in Vineyard Haven, said the market generally fluctuates in approximately eight-year cycles. The most recent upturn occurred in 2012 after the financial market crash four years prior, making 2020 particularly portentous.
“In 2020, we thought we were going to see a downturn or a leveling in the market. Then Covid hit, and we had two weeks of nothing, because everybody was in such a panic,” Mr. Reece said. “But after two weeks, the phone started ringing, and there became evidence that this was going to be a very good year.”
Home sales began to flow in, Mr. Reece said. Inventory quickly dried up. Interest rates went down to three per cent. Properties that went on the market didn’t stay there long. Properties that had languished on the market for years finally sold. And a new system of home sales started, with brokers beefing up websites, virtual tours dominating the landscape and a few wealthy clients even buying properties sight-unseen — a rarity in second-home markets.
The Island’s market floor became an elevator. The market ceiling stayed in the clouds. And the numbers quickly reflected the change, showing a jump in price and home sales that began approximately a month after the pandemic emergency orders. There are 263 properties that have come under agreement since April 1 of this year — 71 more than the same time period last year. And after a slow first quarter, the second quarter saw a 44 per cent increase in median home sale price from 2019.
Those numbers have carried through during the summer, shifting a market that is accustomed to shoulder season peaks and summer season valleys. Ms. Wilson said the changes have reverberated across the Island market. More than five per cent of homes are selling for more than the asking price. Ninety-five per cent of homes have asking prices above $500,000, she said. “It’s all just been a little bit insane,” Ms. Wilson said. “The demand is increasing. The amount of things going on market is increasing. The pricing is just astronomical. And the date on market is decreasing . . . It’s overwhelming.”
Mr. Reece said a new kind of family buyer has entered the market, looking at Vineyard property as a long-term prospect, with questions about Wifi, home office space and whether they can get their children in school.
“That’s a real trend,” Mr. Reece said. “One day last week, I had five viewings of one of my listings. Three of the five people were people from urban areas, who were wanting to get here, to move here, to get their kids in school. That was one day, and one property. Not everybody shares their story . . . But I was like, holy cow.”
Ms. Taylor said the shifting buyer demographic has even prompted some brokers to coin a new vernacular for what used to be called second homes.
“The term that people are using now for these Vineyard purchases, is that they are purchasing secondary-primary homes,” Ms. Taylor explained. “Yes, they are secondary homes, but they are secondary homes being used to function as a primary residence. That’s the new lingo that agents are using.”
The largest jump in home sales has occurred in the $1 million to $2 million range, according to data from LINK, putting even more pressure on the lower end of the market and squeezing out first-time buyers looking for homes in the $500,000 or less range. The changes have served to accelerate an upward trend in the market that has occurred over the past 10 years.
In 2010, 40 per cent of sales were under $500,000. In 2020, that number has dwindled to less than five per cent, and has decreased every year since 2014. Home sales in the $1 million to $2 million range made up about 20 per cent of sales in 2010, and now make up around 40 per cent of sales.
There are currently only three “very conservative” homes on the market for less than $600,000, Ms. Wilson said.
“What we’re seeing is the bottom end of the market is just climbing,” she said, adding: “Six hundred thousand dollars used to get you two bedrooms, three bathrooms on half an acre. You’re not getting anywhere near that until you get in the seven hundreds or the eight hundreds now.”
The top end of the market has seen a shift too. Speaking anecdotally, Ms. Taylor said two of the largest sales in Edgartown this quarter — one at Cape Pogue, and one in downtown Edgartown were cash transactions. Both of the high-end properties had been on the market for more than three years without offer, she said.
The property in downtown Edgartown, a combination of 22 Pease Point Way South and 11 Tilton Way, sold for more than $9 million during the middle of the pandemic. It has no waterfront access. But it does have Wifi, furniture and a pool.
“There’s been a lot of talk in the news about the de-migration from the city,” Ms. Wilson said. “I think we’re seeing it.”
The story has been updated to correct the address of the property in Edgartown that sold for more than $9 million.
Comments
“I am pleased that people see
Jane Norton Chilmark“I am pleased that people see the Vineyard as a safe haven,” Ms. Flanders said. “For them personally, and for putting their money here too. We’re lucky to be in this situation.”
“It’s all just been a little bit insane,” Ms. Wilson said. “The demand is increasing. The amount of things going on market is increasing. The pricing is just astronomical..”
This enthusiasm for astronomical price increases in the "mid-range" housing market does not bode well for islanders struggling to make a living and pay astronomical rents while attempting to save enough to buy a home. Pricing islanders out of the "mid-range" housing market is not something to celebrate.
Agreed!
R Scott Patterson EdgartownAgreed!
I worry for the Island about
Ellen S Sturgis West Tisbury & Stow MAI worry for the Island about the long term impact of these new residents — the pressure on infrastructure - schools and hospital in particular - and on daily life. In both my hometown and in Stow, I have watched the changes as more affluent people move in and become the majority. Changes the way of life. And often these newcomers don’t step up to volunteer in town positions. And of course the obvious, the squeeze on affordable housing grows even tighter.
What a ridiculous set of
T Bone Oak BluffsWhat a ridiculous set of comments. Newcomers don't step-up? How presumptuous and downright nasty. I was a newcomer once, moving here from Acton -- your "neighbor" next to Stow. I settled in, and got my bearings. And yes -- I volunteer and give plenty in time and money now. It's "Islander" attitudes like yours that give us a bad name. Do you say the same things about newcomers to Stow?
As usual Ellen, you are the
Michelle Traverse Oak Bluffs and StowAs usual Ellen, you are the voice of sensibility and reason!
I had an opportunity to buy a
Gail Maher Rockland County, NYI had an opportunity to buy a home sometime back in the early 2000’s,
sorry I didn’t! I do think the homes
on MV are way over market value elsewhere.
How do the full time residents afford to
live here?
They live with family or in
Jeremy TisburyThey live with family or in homes they inherited. There is nothing left for the middle class available on the island. I was honestly hoping the market would tank here due to the drop in vacation rentals, making homes available permanent residents.
I was hoping for the same
Melanie Vineyard HavenI was hoping for the same thing Jeremy. I've seen a mass exodus of the middle class here and it's a shame. I lost my housing to kids who moved home, they didn't want to be in the city. Everyone I know who has a house here inherited it. There's drawbacks to that too of course, namely the loss of certain survival instincts that could help you, but that's all speculation whereas the reality is they have a home and most people don't. I've seen what happens to places that lose their middle class; they lose their community. It remains to be seen what will happen.
I would be interested in some
Curious MVI would be interested in some more detail on what the typical price appreciation has been at various levels. Median sales price is the mid point of recent sales, and an 18 percent increase tells us something, but not everything. If the rush to buy is coming from people who want move in ready higher end homes, and the lower income buyers (still wealthy relative to many off island) are sitting it out, then what we are really seeing is a lot of activity in the higher end of the market. In other words, your typical 1600 sq ft cape or 1000 sq ft ranch on a quarter acre or less may not be up 18 percent, but they just aren’t selling (minimal supply and not enough demand to shake out new sellers at higher prices). Or maybe they are. Median sales price doesn’t answer that question. I would love more than just anecdotal reports on supply and demand across the various quartiles of the market (not that anecdotal isn’t valuable or interesting). Any experts out there able to provide statistical data on that? Or is it too hard to come by (you might need the same homes, unimproved, sold more than once in a few years?)
It would be great to do a
Liz Volchok EdgartownIt would be great to do a counter-story of how the rising real-estate market has affected low-income residents (or really even middle-class residents) of which the "lower- barrel" number of 600k is extraordinarily high as it is - and more importantly, what the Island officials are planning on doing with the increase of full-time, year-round residents. How could the Island's existing and future "non-millionaire" community benefit from the rising real estate, rather than be further hurt by it? What programs and incentives are there for middle-class (i/e teacher and trade worker) residents who wish to own a home in the future but are not able to?
Such a good and valid point
Sue EdgartownSuch a good and valid point Liz. In order to get young and middle class people here, who want to be part of the culture of the island, who revere the way of life, it’s beaches, farms, schools, hospital, social services and amazing people, how are they ever going to get a piece of the dream when the very wealthy keep upping the prices by being able to pay astronomical prices. And, yes, will these buyers really care about the great services, contribute to helping those less fortunate, support the many great organizations...Hospice, alcohol and drug counseling, libraries, agriculture, and on and on and on. It’s a double edge sword. It’s the glass half empty, the glass half full. But, the bottom line is we can only hope it’s not always about money, but about quality of life here on this unique island.
As a young, lower-middle
P. West TisburyAs a young, lower-middle earner in the beginning stages of starting a family, I can’t begin to say how crushing seeing these already high numbers skyrocket. My family has lived on the island year- round for nearly my entire life, and I have always wanted to raise my own family here, but that hope feels as though it’s becoming even more unattainable than it already was. My family has been fortunate enough to not lose work throughout these rough times, and in many ways I can’t complain, but seeing the real estate boom fills me with sadness, regardless of whether or not that is a fair feeling.
What about the younger
5th GenerationWhat about the younger generation that's already here?
Forget the "culture".
It's all cheap labor and tourist cash grab garbage. Eventually, all that will be left are the mansions and their imported help.
Unique.. lol.
The old salts and their yarns are disappearing fast.
Hold on MV what does this
Marie EdgartownHold on MV what does this really mean? Do people want second homes or are they staying here year round. If so, could we please get a new Stop and Shop at the airport. Our Stop and Shop is beyond out dated and what about our infrastructure, sewer, water, roads, schools, hospital.....This is an interesting time for our island as people flee the cities for security. I quest it’s goodbye to our secret.
When I bought my home in
Adam Epstein Vineyard HavenWhen I bought my home in Katama in 2013, I applauded the required 2% of the purchase price donation to the Land Bank in the name of conservation. But the more time I spent on island, the more I understood that the Land Bank is buying up property on the island and making it unavailable for people to homestead on, and reducing the potential supply of available opportunities for affordable residential living.
The remaining available properties have increased in valuable, as they become much more scarce, driving up what homes have been listed for sale. The few properties that do get listed for sale are getting multiple bids, driving the prices up even more rapidly.
In some situations, the Land Bank is one of the bidders, and end up purchasing land that formerly provided housing, using their constantly renewable and refreshed, endless stream of steady income from the tax levied on real estate market sales. Is it possible that the land Bank, which was a force for good, unfortunately ended up yielding unintended consequences? Is it amplifying the elevation of real estate prices by reducing the number of affordable housing choices?
Is it time to consider that the Island is for its residents, and that as noble a cause as the Land Bank is, that the time has come for that 2% donation be shared equally with an organization like the Island Housing Trust, who can purchase property specifically for affordable housing options?
I still support the Land Bank, and it’s mission to ensure that the islands natural environment is maintained and nurtured. It’s one of the reasons I’ve fallen for this place. But, the island is for the people who make it such a vital community, and I worry that those are the people who’ll be left behind when Land Bank revenues mean more than the families of at-risk islanders.
Without the LandBank and
TisKid VHWithout the LandBank and other entities like it this island would just be overrun with people, cars, and houses, and that may still happen. The LandBank has website where they state they don't target places they consider good candidates for affordable housing. McMansions wouldn't end up as affordable housing anyway. Developers want to build everything they can here, quality of life be darned. There is no "too much" to developers. Give me the LandBank any day. It's rare that the LandBank buys a property with homes on it and removes the home.
Real estate prices seem to be
Tamara Chin Oak BluffsReal estate prices seem to be greatly inflated. I'm a year round resident and between the rents and the short leases it's definitely frustrating and tiring. I grew up here and have just returned in 2019 and although we have two steady year round incomes, it is still difficult. There are also people who buy homes and are only here two or three months out of the year and sometimes they just rent in the summer. This makes less opportunity for year round residents who need a place to rent. But clearly it works out for the owner/summer residents. It's definitely quite a dilemma.
I would be terrified to buy
Blythe OBI would be terrified to buy in this bubble! These home prices are unsustainable and a lot of these home buyers will be in for a sad surprise when they’re ready to sell.
This concept of an
Silence Dogood EdgartownThis concept of an unsustainable environment has been going on for a while now and it seems as though the hardest working folks on this island just keep having to adapt to the new normal of the marketplace. Unfortunately, their resilience and the strength of the community here always seem to make up the difference. I don't begrudge anyone rental or real estate revenue, and I don't ever want the ecosystem and environment to be destroyed here but when will someone address the problem. People have to be able to affordably live and thrive on this island because in large part it's the people that make this place amazing and it's those very same people that house-hop all year long to keep this place alive. Someone will probably say that they should choose to live somewhere else but that sort of ignorance just misses the mark. So...How can I or anyone else for that matter personally get involved in a way that is meaningful, that works to solve the problem? Islanders Talk isn't helping.
Is anybody going to point out
Mark EdgartownIs anybody going to point out that the real estate values are the reason why real estate taxes are so low for islanders.
Excellent point. Islanders
bs Oak BluffsExcellent point. Islanders rarely admit that people from away pay 80% our taxes. Yes folks, those summer people you so disdain pay 80% of the bill for schools, fire and ambulance, road work, hospital , beach maintenance etc. Our taxes would be through the roof without the seasonal homeowners.
Taxes are (comparatively) low
Mr. B ChilmarkTaxes are (comparatively) low for a number of reasons. I believe that the foremost reason is that so many of the taxpayers do not live here permanently and, thus, make little use of the services. If you look--for instance--at the number of year 'round residents of Chilmark and compare it to the number of homes that are taxed in Chilmark, you will see the point. In addition, the smaller towns on the island do not provide water or sewer or refuse disposal--and, they have few roads to maintain, most of the major ones being state or county.
The primary reason is real
Mark EdgartownThe primary reason is real estate values, Edgartown has approximately $10 billion in taxable residential real estate. That massive pie is why rates are amongst the lowest in Massachusetts.
and of course, in Vineyard
RR Vineyard avenand of course, in Vineyard Haven, the non-resident taxpayers pay a higher rate
Who are these buyers? If
Vasha Brunelle Vineyard HavenWho are these buyers? If they are talking about enrolling their kids in school are they techies working from home? Would diversifying the island economy be a benefit?
There is no doubt this is a
Ready 4 a Laff Here in FebruaryThere is no doubt this is a really serious situation with a big impact on affordable housing, town budgets, and off season sanity. At least we can try to find some levity here. Anybody old enough to remember the show Green Acres? We are going to have a bunch of city transplants with hugely flawed perceptions of their idyllic sanctuary come spend the cold months with us (except those who shift to a third home for winter). Imagine the stories yet to be told...the real Vineyard is going on display for all those who didn’t know better. I forecast a buyer’s market on the island come May and some some seriously expensive therapist bills for a whole bunch of “my real home is the Island” gushers. First lesson: this is called a “nip” and this is called a “scratchy” and no there isn’t anything else to do here.
Yes, Mark, 100% correct--plus
Bob OBYes, Mark, 100% correct--plus this is a societal issue, not just here on MV. So long as no legal or ethical crime has been committed, it is hard to fathom what the problem is here that needs to be remedied. If someone spends $10m on a property, year-rounders should be celebrating because the buyer offered a fair price and the seller [likely year-rounder] has$10m cash to spread around the island economy.or to care for family members or to donate to affordable housing.
What’s the story with 77
Peter Alonso Queens, NYWhat’s the story with 77 cooke? It was on the market for 2.5M for 3 years without an offer and sold for 9M? Is that a misprint? Massive Covid fueled bidding war? This doesn’t make a lot of sense.
According to Zillow 77 Cooke
JAH GosnoldAccording to Zillow 77 Cooke last sold in January of 2017 for $2,300,000.
I could not find it listed for sale by any of the prominent brokers.
No anything on it selling for 9 million.
The story has been updated to
EditorsThe story has been updated to correct the address of the property that was sold for more than $9 million. It was a combination of 22 Pease Point Way South and 11 Tilton Way, not 77 Cooke street. We regret the error.
Over the decades I have seen
Lorraine EdgartownOver the decades I have seen them come, I have seen them go, as financial markets boom and bust....something different now is the technology enabling many, depending on type of work, to work from home, as it were. This puts a different spin on things. The island's resources are finite; islands are a different kettle of fish. The more year around people who live on this island, the more stressors there will be on physical resources, the school systems, the hospital, all the ancillary services need to feed an expanding population.
And as rising home values and
gutsy CHILMARKAnd as rising home values and eventual assessments result in higher town tax revenues, there results an opportunity to apply additional resources for schools, hospital, infrastructure etc.... perhaps as suggested above, there's a;so an opportunity to rethink the LandBank concept. A cautious and well-considered division of these funds to include affordable housing seems an obvious choice.
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