2023 Sales Summary and Housing Market Forecast

Jen O'Hanlon, REALTOR®

12/29/23

Martha's Vineyard 2023 Annual Real Estate Market Summary & 2024 Forecast


The real estate market, always a subject of great interest and speculation, is showing some intriguing trends as we look towards 2024, particularly in areas like Martha’s Vineyard and in the context of fluctuating mortgage rates.

In the first half of 2023, Martha's Vineyard experienced a notable slowdown in its real estate market. This was a significant shift from the frenetic pace of the previous two years. The number of property transactions on the island decreased by 12%, compared to the same period in 2022, as reported by Jen O'Hanlon of the O'Hanlon Group. The Vineyard Gazette echoed this sentiment, observing that sales of Island properties had dropped to their lowest level in at least a decade.

On average, homes sold for 160% of their assessed value. Days on market went from 135 to 154, which is still much less than the 2019 and 2020 numbers (248 & 250), when we had a more balanced market with higher inventory. For the full breakdown of 2023 by town and 5 year sales comparisons, see this document from LINK MV.

The lack of inventory was a significant factor influencing the market. The scarcity of properties, especially those priced under $1.5 million, made it challenging for buyers to find suitable options. High interest rates were cited as a primary reason for the reduced availability of properties, as potential sellers with low-interest mortgages chose to stay put rather than sell.

Despite this decrease in sales volume, the price of single-family homes on the island didn't follow suit. In fact, the average price of a home rose slightly to just over $2 million, showing 6% appreciation, despite the lower sales numbers. This trend of high prices amidst a slowdown is indicative of the unique dynamics at play in the Martha's Vineyard real estate market.

Meanwhile, on a broader scale, mortgage rates have been a central topic of discussion for potential homebuyers and sellers. As of late December 2023, there's been a notable decrease in these rates. For instance, Nasdaq.com reported a 30-year mortgage rate of 7.18% as of December 20, which was a drop from the previous week. Fox Business noted a 30-year fixed-rate mortgage at 6.375% as of December 27. Furthermore, and arguably most notable, the Mortgage Bankers Association has made forecasts through 2025 with rates back in the 5% range. Perhaps opting to buy now with Seller Credits to pay down the rate for the first two years, with plans to refinance in 2025, would be a very smart move.

This recent dip in mortgage rates, now below 7%, is a significant development. It potentially signals increased affordability for buyers, who have been grappling with higher borrowing costs. This change could breathe new life into the housing market, encouraging more buyers to consider purchasing, which might in turn affect the dynamics of housing markets in specific regions, including Martha’s Vineyard. Additionally, homeowners who have been holding off on listing their properties, due to higher interest rates for their next purchase, will begin adding their homes to the market as rates drop below 7%.

Looking ahead to 2024, the housing market presents a complex picture. In specific locales like Martha's Vineyard, the market dynamics are characterized by high prices despite a reduction in sales volume. In contrast, the broader national market might see increased activity due to the easing of mortgage rates. For those looking to engage in the real estate market, whether in niche areas like Martha's Vineyard or elsewhere, staying informed about these trends will be essential in navigating the year ahead.

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