A Martha’s Vineyard community topped a list of most expensive U.S. towns

Real Estate

Vineyard Haven’s ranking as one of the most expensive ‘towns’ comes as high interest rates, low inventory, and record-breaking prices continue to mar prospective homebuyers in Massachusetts.

It’s the front door of Martha’s Vineyard. Boutique gift shops mark Vineyard Haven’s downtown, which features some amenities such as a Stop & Shop and public library that are harder to find elsewhere on the getaway island. 

This census-designated place in the town of Tisbury is the most expensive “town” with a population between 10,000 and 50,000 in the United States, according to a new LendingTree Report. The community of around 20,000 residents boasts a median home value of $857,600, the online loan marketplace reported. 

Alyssa Halisky, a broker with Wallace and Co. | Sotheby’s International Realty, pointed out that Vineyard Haven is one of several vacation destinations topping the list. Homes in these places, she said, are priced at polar extremes, and some may be an owner’s second or third. 

“In every town—not just Vineyard Haven—every town on Martha’s Vineyard, there is a concern about affordable housing,” Halisky said.

Vineyard Haven’s top-of-the-list ranking comes as high interest rates, low inventory and record-breaking prices continue to mar prospective homebuyers in Massachusetts. A Raleigh Realty report ranked Massachusetts’s average home prices No. 3 in the country, moving above Washington between 2023 and 2024. 

Massachusetts Affordable Housing Alliance Executive Director Symone Crawford said after the 2008 housing crisis, development cooled, and now the state needs more supply. 

‘It is disheartening to see that right now,” Crawford said, “It has proven to be extremely difficult to attain homeownership for first-time and first-generation renters that are looking to buy.”

High prices

In Vineyard Haven, where the median household income is $77,392, home values compare closely to those in metro San Francisco, LendingTree reported. The homevalue to income ratio there is 11.08 to one, it said. 

Diane Sawyer sold her oceanfront Vineyard Haven compound featuring a mile of private waterfront for $23.9 million last year, and a portion of commissions went back to affordable housing groups serving the island, Halisky said.

Average home prices in Massachusetts increased by 7.7% to $544,210 over the past year, the Raleigh Realty study reported. Since 2019, they’ve increased by 44.7% from $404,992. Crawford said another study reported buying a single-family home required a $185,000 income in Greater Boston.

“That is not attainable to the clientele that we serve,” Crawford said. “And so it becomes problematic for our entity, MAHA, to be able to keep the hope of homeownership alive but still set [the] expectation that it may be a longer term goal for most of our clients.”

Lots of debt

Mortgage debt increased too in Massachusetts between the third and fourth financial quarters of 2023, said WalletHub analyst Cassandra Happe, although only by 0.16%. The highest increase, Happe said, was 1%, while debt decreased in some states.

WalletHub reported on March 21 that Massachusetts is adding more mortgage debt than all but five states. The personal finance website ranked the Bay State the highest in the Northeast in this report, which considered change in mortgage debt as well as average mortgage balance and monthly payment.

As home prices are higher in Massachusetts, Happe said, higher mortgage balances and payments make sense. 

Happe recommended that consumers split up mortgage payments into biweekly expenses, and refinance their mortgage rates if they improve. 

“And I think it’s also important when you have a windfall,” Happe said, “like your tax refund or a bonus from work, to try to put most—if not all of that—towards your mortgage payments, towards that principle, because that will make a huge impact down the road [in] how much you’re going to pay in interest.”

The affordable housing alliance, Crawford said, is trying to provide further support for the CommonWealth Builder program, which aims to spur the development of single-family homes and condos affordable for people with moderate incomes. 

Crawford also suggested that prospective first-time buyers consider MassDREAMS grants—which provides down payment and closing cost grants to some first-time homebuyers—and STASH, a program matching some savings for qualifying individuals who enroll in financial literacy education. 

Leaders should lift zoning laws that prevent new affordable housing from being built, Crawford said. 

“So the onus is on all of us,” she said, “to make the decision and act on it, to release this not-in-my-backyard system that has been developing over many decades, so that we can build homes especially in communities” that have public transportation access.