Peter's Pick - December 21, 2005

Martha's Vineyard Real Estate Pick of the Week

West Tisbury Unique Location ~ $850,000

This property is within walking distance to Alley’s General Store as well as the Tisbury Great Pond. If that sounds good for starters, I can tell you more. Inquire with Peter.

Martha's Vineyard Real Estate Value of the Week - December 16, 2005

Peter's Pick of the Week: EDGARTOWN ~ $2,350,000


I am usually not impressed with the new spec houses that have been going up in Edgartown. However, this 3,600sf 4-bedroom, +4-bath house wowed me. Contact me via my web site SplitRockRE.com or by calling me 508-696-9009. I'd be happy to talk with you about this Martha's Vineyard investment value.

- Peter Fyler

Negative Amortization Loans

(By Peter C. Fyler, Martha's Vineyard Buyer Broker on the web at SplitRockRE.com)



As 2005 draws to a close, Comptroller of the Currency John C. Dugan has singled out negative amortization loans (NAL’s) as a primary concern of the Treasury Department; they may not be as readily available in 2006.

Negative Amortization loans are also known as payment-option loans, and therein lies the problem. In order to afford the loan the mortgagor will need to make reduced payments. The amount of the loan subsequently increases due to a build-up in principle and interest caused by the low monthly payments. Theoretically, what protects the mortgagor is the assumption that a property purchased today will appreciate significantly within the life of the loan, say 5 years, and the loan will not out pace the value of the property. At the end of the term the payment plan adjusts and if the mortgagor cannot refinance the mortgage, the “payment shock” could be devastating as the loan payment amount could potentially double.

Why was this product created? One reason is to allow people to purchase properties in high-cost areas, like Martha’s Vineyard or California where they would need to assume huge mortgages. Although there is very little one can invest in that will realize a better return than real estate because of the low interest rates and high property appreciation percentages, negative amortization loans can still be a trap even for the more sophisticated borrower. Who are the best candidates for negative amortization loans? Borrowers with impeccable credit backgrounds and solid incomes who are able to make a substantial downpayment are subject to the least risk.

On Martha’s Vineyard we have experienced a very healthy run during the last 5 years and some say we have hit the wall. Prices have consistently increased, although not at the hysterical rate they did during the 1980’s. I still believe our market is alive and well and real estate appreciation will remain steady despite a slight adjustment in the current market. The Vineyard is one of those special and unique destinations that remain widely popular both nationally and internationally. Given the right property in the right location at the right price, the chances are pretty good that your investment will remain safe despite bumps in the economic road.

For more information on buying or investing in Martha's Vineyard Real Estate, please visit our informative web site at SplitRockRE.com.

Martha's Vineyard experiences a "Wintercane"

Yesterday mother nature bestowed upon this little Island the worst weather that I have seen in years. Early in the day, the forecast was panning out as predicted with steady mild to torrential rains soaking the Island. Then a little after mid-day, the sun blazed through the clouds and everything was calm and bright for about 30 minutes. But the mood quickly changed as huge flakes of snow began to fall and the wind really started to amp up. Snow squalls increased and finally it wasn’t snowing vertically, it was all horizontal. I estimated the wind velocity to be about 60-70 mph with gusts well above that. Later I learned that gusts were clocked at over 90 mph and average winds were 73 mph, which is still not considered hurricane strength. The power started to flicker and I finally shut my computers down as businesses all over were throwing in the towel sending their employees out to wind their way home through what was becoming an increasingly treacherous obstacle course. At about 3PM the flicker turned into a permanent outage and we were in the dark until about 10PM. It has been estimated that about 150,000 NStar customers were without electric service yesterday and 25,000 are still without service today. Huge trees fell all over the Vineyard taking with them vital power and communications lines --- it was a mess. The weather people are calling this phenomenon created by the convergence of two fronts a Wintercane. Today we are back to a typically beautiful day and there is no snow on the ground, just tree limbs.

There are constant weather links on our web site, SplitRockRE.com

The special Holiday Spirit of Martha's Vineyard

Today is December 7th and 64 years ago 2,300 Americans died in the blink of an eye. Have you ever been to Hawaii? To the Pearl Harbor Memorial? Don’t miss it, it will make you cry.

My wife and I were walking along the streets of downtown Edgartown the other night after appreciating an electrifying experience at a standing room only concert gifted by the Island Community Chorus at the Old Whaling Church. We were admiring the serenely tasteful saturation of twinkling lights and evergreen wreathes presenting from the stately and classic bleached white houses. What came to my mind was that I have not lived in or been to a place like this where an entire community --- an entire Island community gets together to celebrate the holidays the way people on Martha’s Vineyard do. I imagined myself hovering in space that night high above the Island watching the exodus of lights from the epicenter on Main Street as people wound their way back to their nests in all six towns of this tiny Island. If you love the Vineyard you have got to come here during the off-season but I warn you, pack your inner resources and leave your aggressions at home.

Best Holiday wishes from SplitRock Real Estate!