Spring is definitely here on the Island, and the Martha’s vineyard real estate market is gearing up for another very busy selling season.
I’m going to talk about some statistics from this March and compare it to last year. I think that comparisons are important because it tells us so much about what has happened in the past year, and what we may be able to expect over the months to come. I’m also going to give some guidance to buyers this month, since it has been an extremely frustrating time to say the least for anyone out there looking to buy a home.
Buyers have seen prices continue to rise and interest rates creeping up. And when a house it is in your budget and preferred location comes on the market, bidding wars and cash buyers can keep you from attaining your dream. I’ll give you some tips and winning strategies on how to stay focused and positive during the process.
But first let’s go over the numbers from March of this year and last year. My fingers are crossed that we have sellers who have been waiting for spring to put their homes on the market as the low inventory is continuing to drive prices up.
Take a look at these numbers.
In March of this year, there were just 81 available homes compared to 181 last year.
The absorption rate is the number of properties available for sale in a given market divided by the number of properties sold in a given period of time. It’s often used to determine if it is a sellers or buyers market. A balanced market usually has an absorption rate between five to seven months. Clearly we’re in a sellers market with just one month of inventory. And last March, we were at a more normal level at five months. Now look at the percentage of assessed value that homes are selling for.
It’s very important to note that this is an Island wide average and it varies quite drastically from town to town and location to location. However, if you own a home on the Island and know your tax assessment, you may just want to add 53% to that and see where you’re at. And if you want to find out if that is at all realistic, give me a call and I’ll let you know. Moving on to home sold median selling price and average days on the market.
This March, we had 41 sold versus 29 and a staggering difference in median selling price from approximately $850,000 last year to about 1.1 million this March. Additionally, we had 19 properties go under contract last month and just nine last March. This is pretty amazing considering the lack of inventory we currently have. So all of this means that we have even more of a supply and demand issue than we had in the past year. And without a significant number of new listings, prices will continue to go up.
This is good news for sellers, but not so much for buyers. So if you’re a buyer, listen up as I want to give you some advice. If you can remove the financing contingency, this can be huge. Most likely you’ll still be able to get a loan if that’s your preference, but if you had to close without it, sometimes taking an equity loan from your primary residence, can solve this problem. This can make the difference in winning over competition since you’ll be able to close sooner than most. You’ve probably heard of writing a letter to the seller to let them know exactly why their house is the one. And sometimes that’s all it takes for a seller to agree especially if a seller has lived in the home for decades and their move is a sentimental one. But be careful on this one as you need to keep the story about why you love the house, not about you personally. Always make sure your agent reviews the letter to make sure it doesn’t violate fair housing. It needs to be specifically about the house.
One contingency that is an almost all offers is allowing for the buyer to have a home inspection. If you’re able to forgo an inspection, this can be a great way to show the seller that you are 100% committed to the purchase. All that said, I’m sure you know what I’m going to say as the final and often best way to assure you get the house of your dreams. Pay the highest price. It’s not always the way to win, but simply put, if you want something you have to pay for it.
And a final reminder to buyers, try not to get emotionally attached to a home, and don’t take it personally if your offer doesn’t get accepted. It doesn’t seem fair, especially if this is going to be your first home or primary residence. But you have to keep your eye on the prize. Stay focused on the end result. Hook up with an agent who is going to search far and wide for properties that may not be officially on the market, and who is available nights and weekends to get your offer submitted as soon as a property comes on the market.
I hope all of this information has been helpful. And if you’re looking for counsel on buying or selling on Martha’s vineyard, just text or call and I’m happy to answer any questions you may have.