Nantucket Real Estate Agent Blog

See Nantucket Independent for full report written by Rob Ranney in July 14, 2010 edition.

"If you believed everything you read about real estate on Nantucket, it might certainly drive you mad, too! Generalizations about the ups and downs of any real estate cycle are difficult to make on Nantucket as there are too many “grey” areas. So-called normal real estate models usually do not apply to Nantucket real estate market. It can often take until September or October, or later, to get a feel for how things are shaping up for the year. With the first half of 2010 in the books, what are the numbers telling us about 2010 so far? Let’s take a look.

Looking back over recent years, we see that in the first half of 2009 there were a total of 96 real estate transactions on Nantucket island, as compared to 128 during the same period in 2008 and 193 in 2007. The total dollar amount of real estate changing hands for the first six months of 2009 was approximately $116 million, while in 2008 it was approximately $250 million and approximately $331 million in 2007. By comparison, the number of transactions for the first six months of 2010 was 163, up 70 percent, when compared to 2009. The total dollar volume of those transactions through June 2010 ($246 million), was up 111 percent versus 2009. 2009 seems to have formed the “bottom” at this point, with 2010 numbers, so far, well ahead of 2009’s.

During June 2010, there were a total of 42 transactions, as compared to only 10 in June 2009. In the first six months of 2010, of the 163 total transactions, there have been 96 homes sold on Nantucket, not counting foreclosures, as opposed to only 41 homes sold in the first half of 2009 – a whopping 134 percent increase! Foreclosures and foreclosure related transactions made up approximately 6 percent of the market in 2009, with approximately 25 – 30 foreclosures and foreclosure related sales taking place. This unfortunate statistic continues in 2010, with an estimated 20 foreclosures and foreclosure related transactions, almost double 2009’s numbers, making up about 19 percent of the market so far in 2010.

The average home sale on Nantucket in 2010, is $1.8 – $1.9 million, down 17 percent from the $2.236 million average home sale for 2009. The median home sale for on Nantucket in 2010 is $1.125 million, down 27 percent from the $1.538 million median home sale for 2009. Currently the average and median home sale prices are hovering near “pre-boom” levels, having erased substantial gains from 2005 through 2008.

There were 35 vacant lot sales in all of 2009 on Nantucket island, with an average lot price down 48 percent from 2008, which in turn was down 36 percent from 2007. Vacant land sales started to increase slightly at the end of 2009, a potentially positive sign. However, vacant land sales have slowed once again and as of the end of June 2010, are almost 50 percent less than in 2009. An increase in vacant land sales generally indicates a healthy economic environment, a sign that confidence has returned to the market. In our current market, we are getting strong pre-existing house sale numbers, but continuing weak vacant land sales – a mixed signal as far as market indicators go.

2009 is now the new record holder for the year with the fewest number of building permits being issued since 1972, with a total of 44. Early estimates for 2010, show a continuation of this slow building cycle trend, on par with 2009.

June 2010 was the busiest June since 2006 in terms of overall volume of real estate sales on Nantucket. May 2010 was the busiest May since 2007. On the surface, it appears that we are potentially beginning a “re-bound” of sorts. Foreclosures are still weighing heavily on the market though, and it will still take time for the market to work that out. Overall sales volume and the dollar volume of those sales are both currently up versus 2009, but the average and median sale prices of those sales are down. So, more sales are happening, but at lower prices. We’ve seen some encouraging market indicators of late and hopefully, as confidence returns and takes hold again, we will continue to see them as we go through the second half of the year. Stay tuned.

– A student of the current real estate market, and a licensed real estate salesperson since 1987, Rob Ranney performs real estate appraisals with Denby Real Estate, Inc."