Homebuyer Activity Shows Signs of Warming Up for Spring
The spring season appears to be warming up the housing market here on Martha's Vineyard and in many areas around the country as more and more buyers re-enter the market. And after rising mortgage rates sidelined so many buyers last year, that’s a good sign for sellers. Realtor.com has the latest:
“Spring is officially here, and like green shoots emerging from the bleak winter, new data suggests that more buyers are back in the market, although more subdued compared to a year ago.”
We know buyer activity is trending up because of mortgage purchase application data. According to Investopedia:
“A mortgage application is a document submitted to a lender when you apply for a mortgage to purchase real estate.”
That means the number of mortgage applications shows how many buyers are applying for mortgages. Put another way, an increase in mortgage applications means an increase in buyer demand – and as Joel Kan, VP and Deputy Chief Economist at the Mortgage Bankers Association (MBA), explains, application activity started ramping up as mortgage rates fell steadily in March:
“Application activity increased as mortgage rates declined . . . recent increases, along with data from other sources showing an uptick in home sales, is a welcome development.”
In fact, we can see how mortgage rates have a direct impact on applications over time. As rates rose dramatically last year, applications fell in response (see graph below):
The recent uptick in mortgage applications, as well as the decline in mortgage rates, is good news for sellers because it means more buyers are actively looking for homes.
What This Means for You
Buyers are active this spring, which is typically the busiest time of the year in real estate. We've seen an uptick in buyer activity on Martha's Vineyard this month. With many buyers reaching out on properties that have been on the market for several months. During the last few weeks, multiple offers have been received on many of these homes with several going under agreement.
Furthermore, new listings for homes that are located in a desirable area and priced right are going under agreement quickly as well. We are seeing high activity for sales of single family residences, land and commercial units in Oak Bluffs, Vineyard Haven, Edgartown, West Tisbury, Chilmark and Aquinnah. The first quarter median home price island wide for single family residences on Martha's Vineyard was $993,000 and condos were at $1,076,333.
As mentioned in our newsletter, a buildable lot on Witchwood Lane in Katama came on the market to a flurry of interest and went under agreement for what we can only assume is over the asking price of $2,695,000, just 11 days later. As agents, we are advising our buyer clients to make a move and get prepared; make sure their finances are in order and have a pre-approval letter if financing is necessary. With so many buyers looking to get into the Martha's Vineyard real estate market and the extreme low inventory, we may continue to see prices rising here on the Island.
“If homeowners are planning to sell in 2023, now is the time to get ready.”
Selling a home can be a daunting task, but doing it in a low inventory market can actually work to your advantage. In a low inventory market, there are fewer homes for sale, which means less competition for your home. This can lead to a higher sale price and a quicker sale. If you are considering selling your home, here are some advantages to doing it in a low inventory market:
Less competition: With fewer homes on the market, your home will stand out more. Buyers will have fewer options to choose from, making your home more desirable.
Higher sale price: When there are fewer homes for sale, buyers may be willing to pay more for a home that meets their needs. This can result in a higher sale price for your home.
Quicker sale: With less competition and higher demand, your home is likely to sell more quickly. This can save you time and money in the long run.
More negotiating power: In a low inventory market, buyers may be more willing to negotiate on price or other terms of the sale in order to secure a home.
If you are considering buying or selling you need to be prepared and this means working with a local real estate agent on Martha's Vineyard. Someone who knows the market and how to help you with your real estate goals.