Nantucket Real Estate Agent Blog

Rob Ranney writes an article every quarter or so wrapping up his perspecitve on the Nantucket real estate market.  Rob is an appraisor and works with his family at Denby Real Estate.  Even though I may not agree with Rob's perspective all the time I do believe his his data points are interesting and worth review. 

As an agent who works full time with buyers and sellers in the Nantucket market I do believe I may have a hand a little closer to the pluse of whats happening within the marketplace, stay tuned for more of my perspective.

Here are Robs comments from the Nantucket Independent Sept. 15th edition.

Fall is in the air, a typically busy time of the year in the Nantucket real estate year-cycle. Will this fall be like the falls of years past? Looking back over previous years often provides indications of trends going into the future. What are the numbers telling us about 2010 so far? Let’s take a look.

Looking back over recent years (for comparison to 2010), we see that in the first eight months of 2009 there were a total of 132 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 178 during the same period in 2008 and 271 in 2007. The total dollar amount of real estate changing hands for the first eight months of 2009 was approximately $175 million, while in 2008 it was approximately $381 million and approximately $510 million in 2007. By comparison, the number of transactions (all sales) for the first eight months of 2010 was 211, up substantially (60%) compared to the same period of 2009, and the total dollar volume of those transactions through August 2010 ($295 million), was up about 69% versus the first eight months of 2009. 2009 seems to have formed the “bottom” at this point, with 2010 numbers, so far, well ahead of 2009’s.

During August 2010, there were a total of 24 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to only 16 in August 2009. In the first eight months of 2010, of the 211 total transactions, there have been 116 homes sold on Nantucket, not counting foreclosures, as opposed to only 65 homes sold in the first eight months of 2009 (a whopping 78% increase!). Foreclosures and foreclosure related transactions made up approximately 6% of the overall market in 2009, with approximately 25 – 30 foreclosures and foreclosure related sales taking place. This unfortunate statistic continues in 2010, through August, with an estimated 25 - 30 foreclosures and foreclosure related transactions already having taken place (well ahead of 2009’s numbers at this point), making up about 18% of the market so far in 2010 (based on dollar volume).

The average home sale in 2010, as of the end of August, is hovering in the $1.8 million range, down about 19% from the approximate $2.236 million average home sale for all of 2009, while the median home sale at the end of the first eight months of 2010 was $1.100 million, down about 28% from the $1.538 million median home sale for all of 2009. Currently the average and median home sale prices are hovering near “preboom” levels, having erased substantial gains from 2005 through 2008.

There were 35 vacant lot sales in all of 2009, with an average lot price down about 48% from 2008, which in turn was down about 36% from 2007. Vacant land sales had begun to increase slightly at the end of 2009, a potentially positive sign. Vacant land sales slowed once again in early 2010 and as of the end of the first eight months of 2010, are on a pace to see fewer vacant land sales in 2010 as took place 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.

2008, on an annual basis, saw the fewest number of new single-family building permits being issued for any year since building permits were first required in 1972. 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 only 44. Early estimates, based on permits issued to date in 2010, show a continuation of this slow building cycle trend, on par with 2009.

August 2010 was the second slowest August (August 2009 was the slowest), in terms of overall volume, in over a decade, going all the way back as far as 1997. On the surface, it appears that we are potentially beginning a slow “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 way up versus 2009, but the average and median sale prices of those sales are down. So, more sales are happening, but at lower prices (fueled at least in part by continued foreclosure activity). We’ve seen some encouraging market indicators of late (increased market activity), and hopefully, as confidence returns and takes hold again, we will continue to see them as we go through the last quarter of the year. If we use past years as indicators, then 2010 should end ahead of 2009, but probably not spectacularly. A slow “re-bound” is taking hold as we gradually come up from the bottom. The future might not be what it used to be. We’ll just have to watch it re-invent itself going forward. Stay tuned.

"-Rob Ranney - a student of the current real estate market, and a licensed real estate salesperson since 1987, Rob has been performing real estate appraisals with Denby Real Estate, Inc. since 1996 as a field appraiser, construction inspector for numerous financial institutions, market statistician, REALTOR, and leading researcher and data collector for Nantucket Comparable Sales service, a subsidiary of Nantucket Listing Service, Inc., – the source for all your Nantucket real estate information, statistics and market analysis needs."