Wednesday, July 7, 2010

Summer Real Estate on the Vineyard

Summer arrived on the Vineyard 2 weeks ago and the 90 degree temperatures have warmed the local waters to almost 70 degrees. Many years we do not see this water temperature until August.

The real estate market has also heated up…in regards to the number of sales. In the month of June there were 49 real estate transactions. Included in this number are 7 bank foreclosure sales (about 14% of the market). This is up 100% from last month when we saw 24 sales and up 90% from a year ago when there were 27 sales in June. The average sales price was $711,836; the median price was $549,250 and the number of days on market averaged 311 days. The median price has been fairly consistent over the past 12 month period which is a strong indicator that prices are stabilizing.

Looking ahead, there are presently 31 properties under contract or at Purchase and Sales, so July sales numbers will probably be lower than those in June. These numbers will be somewhat increased when the bank foreclosures go on record since many of these sales are not listed for sale in LINK. Speaking of foreclosures, the experts tell us that the number of foreclosures will be increasing over the next 12 months, reaching the peak in August of 2011. This is primarily due to the “option ARM” loans that are in sharp contrast to the sub-prime loans that started this foreclosure mess. The option ARM loans were initiated by many professional people who have subsequently lost their job in the current economic downturn, so the anticipated values of the upcoming foreclosures will be higher than those of the sub-prime era.

Interest rates have again reached record lows. A conforming 30 year fixed rate mortgage dropped to 4.5% for the first time in history! Mortgage lending does have tough new standards so the time and requirements to obtain a loan has increased. As a seller, this means (once we find a buyer) you need to be patient as the bank works through their process.