Hey Everyone, Happy New Year! I hope that 2021 brings us some normalcy and a chance to reconnect with our friends and family.
It doesn’t take an expert to understand what happened here on the Island in the spring and summer. With so many people working from home and wanting to get out of cities, the Vineyard was seen as one of the most ideal spots to live.
Nationally, most homeowners were in great shape, with a lot of equity in their properties. That coupled with the amazingly low interest rates gave them lots of options. In December, Frank Martell, The president and CEO of CoreLogic said “The housing market has remained a strong pillar in an otherwise tumultuous economic year. A sharp rise in demand, spurred by record-low interest rates, continues to bolster homeowner equity. And with many people now spending more time than ever before at home, some homeowners have tapped into their strengthening equity to fund renovations.”
So, let’s look at the sales numbers on the Vineyard to see what the outcome to this perfect storm has been. According to LINK, 61 homes sold in December. In 2019, there were 46 sales. Obviously, quite a difference. And in 2020, we had 544 total sales for the year, up from 390 in 2019. That’s a 40% increase!
You may have heard that there is a lack of inventory. There were almost the same amount of new listings that came on the market in 2020 as 2019. But 40% more sales this year. What does that mean? There are very few homes and lots of buyers still looking to purchase a home.
Regarding values, the appreciation we saw in 2020 is actually pretty shocking. The median sales price in 2019 was $835,000. This past year, it was $1,051,000. That is an increase of over 25%! I can’t imagine that this won’t level off. From 2018 to 2019 appreciation was 5.7%, which is much more in line with the rest of the country.
But, experts are saying that we should expect some level of appreciation to continue, nationwide.
All of this activity and resulting appreciation has increased home values for most of the country and Massachusetts is one of the states with the highest equity gains. This is good news for homeowners and gives them the ability to sell for top dollar and purchase a new home with more cash down.
In closing, it’s a very interesting time in real estate right now. There is already talk that interest rates may start to go back up later this year, when vaccinations are widely available and the overall economy improves. This threat will most likely keep buyer demand strong and sellers should be aware of this. It will be smart to sell your home while interest rates are still at these record lows.
