“A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.”
–Mark Twain (1835 - 1910)
After the past year or two, we are all familiar with “ banker’s rain” in the form of bad economic times, falling prices, foreclosures, job losses, etc. But, as with early hints of spring, some of the rain clouds may be easing slightly as far as Nantucket real estate goes. Does this mean umbrellas will be lent out again any time soon? Is the rain over, letting up somewhat, or are we just in between showers? Let’s take a look.
In first two months of 2009, there were a total of 33 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 52 during the same period in 2008 and 49 in 2007. The total dollar amount of real estate changing hands for the first two months of 2009 was approximately $36 million, while in 2008 it was approximately $112 million and approximately $91 million in 2007. The number of transactions (all sales) for the first two months of 2010 was up slightly (6%) compared to the same period of 2009, and the total dollar volume of those transactions through February 2010 ($69 million), was up about 92% versus the first two months of 2009 (thanks mostly to one $19 million sale).
During February 2010, there were a total of 21 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 17 in February 2009. In February 2010, of the 21 total transactions, there were 15 homes sold on Nantucket, not counting foreclosures, as opposed to 7 homes sold in February 2009. 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 statistic continues in 2010, through February, with an estimated 6 foreclosures and foreclosure related transactions making up about 10% of the market so far in 2010.
The average home sale in 2010, as of the end of February, is hovering just above $3 million (yes you read that correctly – thanks again to that $19 million sale mentioned above), up about 35% from the approximate $2.236 million average home sale for all of 2009, while the median home sale in February 2010 was $1.4 million, down about 9% from the $1.538 million median home sale for all of 2009. Currently the average and median home sale prices are still hovering near 2004 - 2005 levels, having erased gains from 2006, 2007 and 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 in the past month or two, a potentially positive sign, however there were no vacant land sales at all in February 2010.
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, continue this slow building cycle trend.
February 2010 was the busiest February in the past four or five years in terms of overall dollar volume, but perhaps it is too soon to take anything meaningful from that statistic. Foreclosures are still weighing on the market. Volume, despite a so-called “blip” in February, is still sluggish. And, as I’ve been saying for months, even if we are at or near the market bottom for this cycle, any meaningful recovery will likely be slow and vague. We’ve seen some encouraging market indicators of late, but let’s not get too far ahead of ourselves. One sunny day in early March does not a spring thaw make. Spring will arrive in full force eventually. 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.
March 8th, 2010
“Price is what you pay. Value is what you get.”
–Warren Buffett
Eleven months of 2009 have passed us by. Real estate activity on Nantucket in November continued to show some improvement, perhaps trending toward price stabilization as opposed to continued declines. Let’s take a look.
For the first eleven months of 2009, there have been a total of 263 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 261 in the first eleven months of 2008 and 425 for the same period in 2007. The total dollar amount of real estate changing hands so far in 2009 is now approximately $389 million, while in the same period of 2008 it was approximately $523 million and approximately $794 million in the first eleven months of 2007. The number of transactions (all sales) through November of 2009 was virtually unchanged compared to 2008 and the total dollar volume of those transactions for the same period was down about 26% in 2009 versus 2008. Indicating some modest price declines, reading between the numbers.
During all of 2008, there were 174 homes sold on Nantucket, which is roughly equivalent to about 15 homes being sold a month (one home sold every two days or so). So far in 2009 (through November), there have been 145 homes sold on Nantucket. Foreclosures and foreclosure related transactions are currently making up approximately 6% of the overall market so far in 2009.
As of the end of November 2009 the average home sale is hovering just above $2.2 million, down about 12% from the approximate $2.561 million average home sale in 2008, while the median home sale so far in 2009 is $1.519 million, down about 14% from the $1.775 million median home sale in 2008. Currently the average and median home sale prices are hovering near 2005 levels and not nearly as bad as they looked just a couple of months ago.
In 2008, there were a total of 32 vacant lot sales with an average sale price of $1.550 million, there were 46 vacant lot sales in 2007, with an average sale price of just over $2.4 million. There have been 31 vacant lot sales so far in 2009, with an average lot price down about 49% from 2008, which in turn was down about 36% from 2007. Vacant land sales have begun to increase slightly in the past month or two, a potentially positive sign as the issuance of new single family building permits also seems to be rebounding somewhat.
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. Annualized predictions for 2009, based on permits issued to date, indicate a total of about half as many new single-family building permits being issued in 2009, as were issued in 2008. September 2009 saw 7 new single-family permits being issued, while 7 more new single-family permits were issued in October and 7 more in November 2009.
The first eleven months of 2009 indicate the Nantucket real estate market is still showing modest indications of continued, but slowing declines in both overall dollar volume and sales prices. October and November 2009 actually were stronger Octobers and Novembers than October and November 2008 were, following a stronger September. It is too soon to determine if this indicates a potential market turning point or just the firming of a market bottom. Or just typical year-end real estate activity on Nantucket, albeit slower than in “boom” years. After the last major downturn in Nantucket real estate (early 1990’s), it took several years before any real “upturn” took hold. So, even if we are at the market bottom, or even turning a slow corner, it could still be a long winter. Let’s be optimistic heading into the last month of the year. 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.
January 20th, 2010
“The point of living and being an optimist, is to be foolish enough to believe the best is yet to come.”
–Peter Ustinov (1921-2004)
Goodbye 2009! Hello 2010! Real estate activity on Nantucket in 2009 was down overall, but perhaps not quite as dire as was originally feared. Are we finally turning the long awaited corner to a recovery or simply bouncing along the bottom. Should we be foolish enough to believe the best is yet to come, or is a sideways year the best we can hope for? Let’s take a look.
In 2009, there were a total of 300 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 285 in 2008 and 446 for 2007. The total dollar amount of real estate changing hands in 2009 was approximately $445 million, while in 2008 it was approximately $568 million and approximately $841 million in 2007. The number of transactions (all sales) in 2009 was actually up slightly (5%) compared to 2008, but the total dollar volume of those transactions in 2009 was down about 22% versus 2008.
During all of 2008, there were 174 homes sold on Nantucket, which is roughly equivalent to about 15 homes being sold a month (one home sold every two days or so). In 2009, there were 164 homes sold on Nantucket, not counting foreclosures. 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 frightening statistic, put in perspective, shows that there were more than six times the number of foreclosures in 2009 on Nantucket as there were in 2008.
As of the end of December 2009 the average home sale is hovering just above $2.2 million, down about 13% from the approximate $2.561 million average home sale in 2008, while the median home sale in 2009 was $1.538 million, down about 13% from the $1.775 million median home sale in 2008. Currently the average and median home sale prices are still hovering near 2005 levels and not nearly as dire looking as they seemed just a couple of months ago.
In 2008, there were a total of 32 vacant lot sales with an average sale price of $1.550 million, there were 46 vacant lot sales in 2007, with an average sale price of just over $2.4 million. There were 35 vacant lot sales in 2009, with an average lot price down about 48% from 2008, which in turn was down about 36% from 2007. Vacant land sales have begun to increase slightly in the past month or two, a potentially positive sign as the issuance of new single family building permits also seems to be rebounding somewhat.
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.
Real estate on Nantucket ended 2009 on a cautiously optimistic note. The second half of the year was stronger in terms of numbers of transactions and dollar volumes than the first half. Yes, the number of sales was up, but the dollar volume was down, indicating more properties selling, but for less money. But at least they are selling! It is too soon to determine if this indicates a potential market turning point or just the firming of a market bottom. Foreclosures are still weighing on the market, though it is possible that the worst is behind us. After the last major downturn in Nantucket real estate (early 1990’s), it took several years before any real “upturn” took hold. So, even if we are at the market bottom, or even turning a slow corner, it could still be a cold winter. However, barring any major catastrophes, it is likely that we could hold a market bottom here and perhaps edge slightly higher as cautious confidence returns to the market heading into the spring. Let’s be foolishly optimistic! 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.
January 13th, 2010
“The future, according to some scientists, will be exactly like the past, only far more expensive.”
–John Sladek, 1937-2000, American science fiction author
Ten months of 2009 have passed us by. Real estate activity on Nantucket in October continued to show some improvement, perhaps the beginning of a more expensive future as prices begin to perhaps rebound somewhat. Let’s take a look.
For the first ten months of 2009, there have been a total of 223 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 241 in the first ten months of 2008 and 390 for the same period in 2007. The total dollar amount of real estate changing hands so far in 2009 is now approximately $327 million, while in the same period of 2008 it was approximately $481 million and approximately $726 million in the first ten months of 2007. Clearly, we have come down well off the most recent market highs. The number of transactions (all sales) through October of 2009 was down about 7% compared to 2008 and the total dollar volume of those transactions for the same period was down about 32% in 2009 versus 2008.
During all of 2008, there were 174 homes sold on Nantucket, which is roughly equivalent to about 15 homes being sold a month (one home sold every two days or so). So far in 2009 (through October), there have been 122 homes sold on Nantucket. Foreclosures and foreclosure related transactions are currently making up approximately 8% of the overall market so far in 2009.
As of the end of October 2009 the average home sale is hovering just above $2.2 million, down about 13% from the approximate $2.561 million average home sale in 2008, while the median home sale so far in 2009 is $1.650 million, down about 7% from the $1.775 million median home sale in 2008. Currently the average and median home sale prices are hovering near 2005 levels and looking not as bad as they looked a month or two ago.
In 2008, there were a total of 32 vacant lot sales with an average sale price of $1.550 million, there were 46 vacant lot sales in 2007, with an average sale price of just over $2.4 million. There have been 27 vacant lot sales so far in 2009, with an average lot price down about 48% from 2008, which in turn was down about 36% from 2007. Vacant land sales have begun to increase slightly in the past month or two, a potentially positive sign.
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. Annualized predictions for 2009, based on permits issued to date, indicate a total of about half as many new single-family building permits being issued in 2009, as were issued in 2008. September saw 7 new single-family permits being issued, while 7 more new single-family permits were issued in October.
The first ten months of 2009 indicate the Nantucket real estate market is still showing real indications of continued, but perhaps slowing declines in both overall dollar volume and sales prices. October 2009 actually was a stronger October than October 2008 was, following a stronger September. It is too soon to determine if this indicates a potential market turning point or just the firming of a market bottom. Or just typical fall real estate activity on Nantucket, albeit slower than in “boom” years. After the last major downturn in Nantucket real estate (early 1990’s), it took several years before any real “upturn” took hold. So, even if we are at the market bottom, or even turning a slow corner, it could still be a long winter. 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.
November 6th, 2009
“The future will be better tomorrow.”
–Dan Quayle, 44th Vice President of the United States
As promising as the future might seem today (light at the end of the tunnel?), with some economic indicators beginning to brighten slightly, maybe tomorrow the future might look even a little better. With three-quarters of 2009 behind us now, have we seen the worst of this down cycle or are we in for a tough winter? Let’s take a look.
For the first nine months of 2009, there have been a total of 172 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 214 in the first nine months of 2008 and 339 for the same period in 2007. The total dollar amount of real estate changing hands so far in 2009 is now approximately $238 million, while in the same period of 2008 it was approximately $429 million and approximately $620 million in the first nine months of 2007. Clearly, we have come down well off the most recent market highs. The number of transactions (all sales) through September of 2009 was down about 20% compared to 2008 and the total dollar volume of those transactions for the same period was down about 45% in 2009 versus 2008.
During all of 2008, there were 174 homes sold on Nantucket, which is roughly equivalent to about 15 homes being sold a month (one home sold every two days or so). So far in 2009 (through September), there have been 92 homes sold on Nantucket, or one house sold every three days or so. Foreclosures and foreclosure related transactions are currently making up approximately 9% of the overall market so far in 2009.
As of the end of third quarter in 2009 the average home sale is hovering just above $2.1 million, down about 17% from the approximate $2.561 million average home sale in 2008, while the median home sale so far in 2009 is $1.495 million, down about 16% from the $1.775 million median home sale in 2008. Currently the average and median home sale prices are hovering near 2005 levels.
In 2008, there were a total of 32 vacant lot sales with an average sale price of $1.550 million, there were 46 vacant lot sales in 2007, with an average sale price of just over $2.4 million. There have been 20 vacant lot sales so far in 2009, with an average lot price down about 50% from 2008, which in turn was down about 36% from 2007.
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. Annualized predictions for 2009, based on permits issued to date, indicate a total of about half as many new single-family building permits being issued in 2009, as were issued in 2008. September saw 7 new single-family permits being issued.
The first nine months of 2009 indicate the Nantucket real estate market is still showing real indications of continued declines in both overall dollar volume and sales prices. However, September 2009 was actually a bright spot in the sense that it was a stronger September than September 2008 was, and single-family building permits were up, which is a hopeful sign. It is too soon to determine if this indicates a potential market turning point or just the firming of a market bottom. After the last major downturn in Nantucket real estate (early 1990’s), it took several years before any real “upturn” took hold. So, even if we are at the market bottom, I would not expect a rapid recovery. 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.
October 6th, 2009
Nantucket is a town, a county, and an island destination resort located 21 miles south of Cape Cod, 91 air miles south of Boston, and 207 air miles east of New York City, in the Commonwealth of Massachusetts off the east coast of the United States. Some 14 miles long and 3 1/2 miles wide, the island has a perimeter of 55 miles of sandy beaches facing the Atlantic Ocean on the south and east and Nantucket Sound on the north and west. Though losing about six acres per year from shoreline erosion, particularly along the south and east shorelines, the island’s total area is about 50 square miles, or 30,000 acres. It has been predicted that a warming atmosphere and rising ocean levels may cause the island to disappear in 700 years.
The official year-round population, according to the Town Clerk, on June 10, 2005, was 10,610, up from 6,012 in 1990 - a growth rate of over five percent annually - and up from 5,087 in 1980. The 2010 Census is expected to find over 12,000 residents. 55% of the 7,712 registered voters participated in the January 19, 2010, Special Senatorial Election. During the three-month summer season the number of people on the island swells to over 50,000 on any given day. The Nantucket school system includes grades K through 12, with an enrollment in January 2010 of 1,150 students. Each high school class for the foreseeable future will include between 80 and 100 or more students. In managing the harbor, a popular destination resort for recreational boating, the Marine Department issued 2,141 mooring permits for small boats.
In the twelve months ending in June 2008, there were 182 births, 175 marriages, and 67 deaths on the island . 19 swimming pool licenses, 2,036 small boat mooring permits, and 169 commercial scalloping licenses were issued. From Nantucket’s sole source aquifer, the Wannacomet Water Company pumped 598 million gallons, 5% more than the previous year. At the end of 2006 there were an estimated 22,000 autos registered on the island. Median annual family income for Nantucket residents for 2000 was estimated at $55,522 by the 2000 US Census and at $42,393 by the Bureau of Economic Analysis . That is up from $40,331 in 1990 and was the second highest in the state, after Sandwich on Cape Cod. The median income according to HUD for 2007 was $81,800.
Travel to and from the island is by boat from Hyannis, or airplane from Hyannis, New Bedford, Boston, or New York. Nantucket’s Memorial Airport is second in New England in the number of flights, with an estimated total of 261,000 passengers departing in 2007, well below the 302,161 in the year 2000. In the year 2009, the Woods Hole, Martha’s Vineyard, and Nantucket Steamship Authority, created in the early 1960s as the island’s lifeline, transported some 513,600 passengers to and from America to Nantucket. 67,200 cars and 38,000 trucks were carried between Hyannis and Nantucket. These figures were off about 6.8% compared to 2008. The privately operated Hy-Line, licensed by the Steamship Authority, carried some 360,000 passengers roundtrip from Hyannis in 2009.
During the “palmy days” from 1750 to 1850, Nantucket was the whaling capital of the world, with her locally-built sturdy whale ships and crews representing the first Americans traveling far into the Pacific Ocean in search of spermaceti. With their successful voyages, the island became the second richest community in New England. But after the discovery of petroleum in Pennsylvania, Nantucket’s Great Fire of 1846, the development of rail transportation to New Bedford, and the 1849 gold rush, Nantucket’s whale fishery declined rapidly. The islanders gradually encouraged the summer visitor and tourist trade, and along with construction of new homes, this is the leading industry today.
A real estate boom began in the mid-1960s and continued through 1989 before correcting severely during the savings and loan crisis, with the average home value dropping about 35% and the average vacant lot declining 50% over four years. The bottom was reached in 1992-93 and the market improved until 2000, a year that finished as the most successful in Nantucket‘s history, followed by 2003 and then came the blockbuster year of 2004, which broke through a billion dollars for the first time. In 2005 the billion dollar figure was again exceeded, though some $137 million represented commercial properties. The market began slowing in 2006 and has continued a downtrend. The national “sub-prime” mortgage problems and declining stock prices are having an increasingly direct effect on Nantucket.
New construction averaged over 200 houses per year until the slowdown started in 2006, providing a high level of income and steady year-round employment in the construction trades. In 2005 there were 212 permits issued, including 19 for the Sherburne Commons assisted-living project, which has lately encountered financial difficulties. In 2007 the annual rate was slower than in recent years, at 127. The construction slowdown continued in 2008, with just 64 new homes, the lowest number since building permits were first required in 1972. In 2009 the rate was less than last year, with only 44 permits issued. An estimated 5 permits have been issued in 2010.
According to a recent Planning Board study, there are more than 8,000 homes and another 1,200 secondary dwellings on the island. With existing approved lots, there appears to be potential for at least another 7,000 or more primary homes on the island, and possibly an additional 8,000 second dwellings. While it is unlikely that all of those houses will actually be constructed, it would seem that unless the economy rebounds and residential construction resumes, extreme “buildout” on finite Nantucket will not occur for another 50 years or more.
The island’s isolation and high freight rates have contributed to “The Nantucket Factor”, a cost of construction that is perhaps 35% higher than in most other places in America. Depending on quality, per square foot costs range from a low of $95 to a high of over $500, according to local contractors and insurance adjusters. We are now estimating standard “no frills” construction at a bare minimum of $300 per foot. Modular homes can be finished faster and for about three-quarters of that figure.
According to a June 2002 study for the Nantucket Planning and Economic Development Commission, the cost of living on Nantucket is higher than on Cape Cod, measured by cost of gasoline (+40%), retail rents (up to 150%), groceries (8% to 25%), electricity (base rate +55%), and heating oil (+48%). However, until the recent recession started, our unemployment rate hovered below 2% for most of each year.
Property taxes in Nantucket County continue to be the third lowest in Massachusetts. The assessed valuation for the entire island as of January 1, 1994, was $3.036 billion, rising to the latest figure as of January 1, 2008, of $25.67 billion, third highest in Massachusetts. The mil rate for residential property is $2.76 for fiscal 2009. The commercial tax rate this year is $4.77, and a separate open space rate is $2.56.
The source of property tax revenues, and a graphic indication that of some 17,467 total taxable Nantucket properties, 89% are owned by off-island taxpayers, is shown below.
Nantucket land and property values escalated rapidly until 1989, with appreciation rates sometimes exceeding 15% per year for homes and 25% per year for vacant land. As shown in the chart below, the average price for a buildable lot peaked at $226,000 in 1989, then declined to $123,000 as of the end of 1993, down 50% in four years, with a monthly low that year of $109,000. The average vacant lot sale in 2006 was up 94% and the median was up 52%! Although the number of remaining vacant lots is dwindling, that very strong trend has proved unsustainable in the current economic climate. In 2008 the average lot was down 36%, while the median lost 20%. Only 35 vacant lots were sold so far in 2009, at an average price of $812,000, down 48% from last year. To date in 2010, just 3 vacant lots have transferred.
The average dwelling sale price rose steeply after 1980, peaked in 1989 at $504,000, then declined about 35% into 1993. In 2002 home prices declined as shown above, but were rising since July of 2003 and finished at a record average sale price of $2,438,000 in 2006. In 2009, the number of transactions barely topped 2008, and was the lowest since 1985. At $445 million, the dollar total was off 22%. Though the market may now be improving gradually, the effects of the international economic slowdown have clearly come home to Nantucket.
Due to the unique consideration that Nantucket properties are almost 89% owned by non-resident taxpayers, who may have affiliations or interests in Wall Street, we can see some correlation to the Dow Jones Industrial Average.
Between 1988 and 1990 volume also declined, a factor stemming from the 1987 stock market crash, higher interest rates, the 1986 “Tax Reform Act” that had a disastrous effect on real estate values, and a general recession in the northeastern United States. Although foreclosures represented 7% of the market for 1992 and 2% in 1993, that is below the 11% seen in 1990 and 1991. This year foreclosures represent about 6% of home sales.
The rate of Planning Board approval of new subdivision lots has been as follows, with 102 new residential building lots created in fiscal 2003, 37 in 2004, and 100 in 2005. There were 116 new residential lots created in 2008.
Average time on the market for all listings as of February 28, 2010 was 16 months, while average sale price as a percent of listing price is estimated at 73%. Sales are taking place at 95% of the January 1, 2008, (most recent) assessed values, on average.
Contributing to values on the island is a strong interest in and community support for conservation of the remaining open lands. Since the early 1960s, groups such as the non-profit 1,800 member Nantucket Conservation Foundation (NCF), the Trustees of Reservations, and the Massachusetts Audubon Society, have collectively purchased or been gifted nearly 40% of the island. NCF owns some 8,450 acres (28% of the Island), the Trustees some 921 acres, and Audubon about 874 acres.
In addition, the Nantucket Islands Land Bank was created by the state legislature in 1983 for the purpose of taxing each Nantucket County real estate transfer and using the funds to purchase land in the public interest. It is operated by a five-member publicly-elected commission. Commission records, which must be completed by buyers and sellers under penalty of perjury and a 2% tax paid prior to transferring title in the Registry, provide an accurate record of real estate transfers. A transfer cannot be recorded in the Registry of Deeds without prior Land Bank approval.
According to IRS, the Land Bank tax represents, not a deductible sales tax but an increase in the cost of purchase. The Land Bank has acquired some 2,200 acres of land (6% of the Island), at a cost far exceeding $100 million. About $20 million was collected through this fee in each of 2004 and 2005. Recently receipts have declined with the slower market.
Nantucket is a desirable destination resort for the millions of people living in the eastern quarter of the United States, many of whom will continue to support this real estate market. Relatively fast population growth over the past few years has resulted from Nantucket providing a safe environment for raising children combined with our historic ubiquity, as well as modern computer and increasingly reliable and fast internet connections.
For more on our favorite subject (Nantucket!), please contact one of us, and you are always welcome to visit our web site at www.denby.com.
H. Flint Ranney Katherine Ranney Sayle Robert F. Ranney
Yolanda Fernandez
© 2010 Denby Real Estate, Inc
September 18th, 2009
“A bank is a place that will lend you money if you can prove you don’t need it.” –Bob Hope (1903 - 2003)
Perhaps if lending standards over the past few years were truly as rigid as Bob Hope suggests, we might not be seeing the number of foreclosures we are currently seeing. Generally speaking, however, economic crises tend to feed on themselves from a variety of sources. Blaming banks does us no good now. In fact, perhaps, banks may help get us out of the economic mess we are still languishing in. Let’s take a look.
For the first eight months of 2009, there have been a total of 132 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 178 in the first eight months of 2008 and 271 for the same period in 2007. The total dollar amount of real estate changing hands so far in 2009 is now approximately $175 million, while in the same period of 2008 it was approximately $381 million and approximately $510 million in the first eight months of 2007. Clearly, we have come down well off the most recent market highs. The number of transactions (all sales) through August of 2009 was down about 26% compared to the same period in 2008 and the total dollar volume of those transactions for the same period was down about 54% in 2009 versus 2008.
During all of 2008, there were 174 homes sold on Nantucket, which is roughly equivalent to about 15 homes being sold a month (one home sold every two days or so). So far in 2009 (through August), there have been 76 homes sold on Nantucket, or roughly three-quarters of the monthly average we saw in 2008. Foreclosures and foreclosure related transactions are currently making up approximately 10% of the overall market so far in 2009.
As of the end of August in 2009 the average home sale is hovering just under $2 million, down about 22% from the approximate $2.561 million average home sale in 2008, while the median home sale so far in 2009 is $1.350 million, down about 24% from the $1.775 million median home sale in 2008.
In 2008, there were a total of 32 vacant lot sales with an average sale price of $1.550 million, there were 46 vacant lot sales in 2007, with an average sale price of just over $2.4 million. There have been 15 vacant lot sales so far in 2009, with an average lot price down about 46% from 2008, which in turn was down about 36% from 2007.
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. Annualized predictions for 2009, based on permits issued to date, indicate a total of less than half as many new single-family building permits being issued in 2009, as were issued in 2008.
The first eight months of 2009 indicate the Nantucket real estate market is still showing real indications of continued declines in both overall dollar volume and sales prices. August 2009 was the slowest August in dollar volume and number of total transactions since 1997. It is too soon to determine if the market declines we have seen to date are slowing, or stabilizing, or even forming the bottom point before a rebound. After the last major downturn in Nantucket real estate (early 1990’s), it took several years before any real “upturn” took hold. So, even if we are near a market bottom, I would not expect a rapid recovery.
Look on the bright side; mortgage rates are still historically very low, and despite stricter lending standards (just prove you don’t need the money!), this really is a buyer’s market! 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.
September 17th, 2009
“From the end spring new beginnings.”
–Pliny the Elder (23 AD – 79 AD)
If, as some are speculating, the real estate market is at or near its recent lows, what sort of ‘new beginnings’ can we expect? Will 2009 finish on an upswing? Is it reasonable to expect an upswing at all any time soon? Perhaps the numbers for 2009, so far, hold a clue. Let’s take a look.
For the first seven months of 2009, there have been a total of 116 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 155 in the first seven months of 2008 and 222 for the same period in 2007. The total dollar amount of real estate changing hands so far in 2009 is now approximately $158 million, while in the same period of 2008 it was approximately $297 million and approximately $382 million in the first seven months of 2007. The number of transactions (all sales) through July of 2009 was down about 25% compared to the same period in 2008 and the total dollar volume of those transactions for the same period was down about 47% in 2009 versus 2008, with 2008’s total dollar volume itself down 32% from 2007 levels.
During all of 2008, there were 174 homes sold on Nantucket, which is roughly equivalent to about 15 homes being sold a month (one home sold every two days or so). So far in 2009 (through July), there have been 65 homes sold on Nantucket, or roughly one-quarter of the monthly average we saw in 2008. Foreclosures and foreclosure related transactions are currently making up approximately 10% of the overall market so far in 2009.
As of the end of July in 2009 the average home sale is hovering around $2 million, down about 19% from the approximate $2.561 million average home sale in 2008, while the median home sale so far in 2009 is $1.415 million, down about 20% from the $1.775 million median home sale in 2008.
In 2008, there were a total of 32 vacant lot sales with an average sale price of $1.550 million, there were 46 vacant lot sales in 2007, with an average sale price of just over $2.4 million. There have been 13 vacant lot sales so far in 2009, with an average lot price down about 40% from 2008, which in turn was down about 36% from 2007.
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. Annualized predictions for 2009, based on permits issued to date, indicate a total of less than half as many new single-family building permits being issued in 2009, as were issued in 2008.
The first seven months of 2009 indicate the Nantucket real estate market is showing real indications of continued declines in both overall dollar volume and sales prices. July 2009 was the slowest July in dollar volume and number of total transactions since 2003. Looking back, though, July 2003 was the beginning of a resurgence in local real estate market appreciation following the ‘market pause’ during the time immediately following the terrorist attacks of September 11, 2001. It is too soon to determine if the market declines we have seen to date are slowing, or stabilizing, or even forming the bottom point before a rebound. After the last major downturn in Nantucket real estate (early 1990’s), it took several years before any real “upturn” took hold. Typically, the Nantucket real estate market roughly follows the stock market (see chart), with a lag time of up to a year or more (during the early 1990’s the lag time was quite pronounced). Whether our current economic situation will allow a continuance of this trend remains to be seen. 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.
August 14th, 2009
“The future is much like the present, only longer.”
–Dan Quisenberry
With the first half of 2009 in the books, what do the numbers indicate about the rest of the year? And perhaps what do the numbers indicate about the long extension of the present into the future? Let’s take a look.
In the first half of 2009, there have been a total of 95 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 128 in the first half of 2008. The total dollar amount of real estate changing hands so far in 2009 is now approximately $114 million, while in the first half of 2008 it was approximately $250 million and approximately $331 million in the first half of 2007. The number of transactions (all sales) through June of 2009 was down about 26% compared to the same period in 2008 and the total dollar volume of those transactions for the same period was down about 54% in 2009 versus 2008.
During all of 2008, there were 174 homes sold on Nantucket, which is roughly equivalent to about 15 homes being sold a month. So far in 2009 (through June), there have been only 47 homes sold on Nantucket, or roughly one-quarter of the monthly average we saw in 2008. Approximately 20% of the home sales so far in 2009 have been foreclosures, now making up nearly 10% of the market dollar volume. This is a sharp increase over 2008 numbers, which show foreclosures making up less than 1% of the total market in 2008 and even less than that in 2007.
The decline in the number of sales taking place, coupled with lower sales prices, is spilling over into the average and median home sales categories as well. So far in 2009 the average home sale has fallen under the $2 million mark for the first time in 5 years, which is down about 23% from the approximate $2.561 million average home sale in 2008, while the median home sale so far in 2009 is $1.415 million, down about 20% from the $1.775 million median home sale for all of 2008.
In 2008, there were a total of 32 vacant lot sales with an average sale price of $1.550 million, there were 46 vacant lot sales in 2007, with an average sale price of just over $2.4 million. There have been 12 vacant lot sales so far in 2009, with an average lot price down about 41% from 2008 levels.
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. Early annualized predictions for 2009, based on permits issued to date, indicate a total of less than half as many new single-family building permits being issued in 2009, as were issued in 2008.
For the first half of 2009, the Nantucket real estate market is showing real indications of significant declines in both overall dollar volume and sales prices. June 2009 was the slowest June in dollar volume and number of total transactions in over twenty years. At this pace, unless something drastic changes the economic picture (prices drop even further, mortgages become easier to obtain, national job losses become job gains and consumer confidence returns), we could wallow in real estate doldrums for some time. Look on the bright side though, there are some good deals out there and interest rates are still historically very low! Typically, the Nantucket real estate market is stronger in the second half of the year. 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.
July 6th, 2009
“Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body – the producers and consumers.”
–Herbert Hoover, 31st President of the United States, 1874-1964
What a difference a month makes. Last month I wrote that the Nantucket market had not seemingly begun to show signs of the real estate weaknesses sweeping many markets around the country. Now, a month later, we are beginning to actually see signs of weakness in the numbers. It was only a matter of time. Let’s take a look.
In the first five months of 2009, there have been a total of 84 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 102 in the first five months of 2008. The total dollar amount of real estate changing hands so far in 2009 is now approximately $106 million, while in the first five months of 2008 it was approximately $203 million and approximately $286 million in the first five months of 2007. The number of transactions (all sales) through May of 2009 was down about 18% compared to the same period in 2008 and the total dollar volume of those transactions for the same period was down about 48% in 2009 versus 2008.
During all of 2008, there were 174 homes sold on Nantucket, which is roughly equivalent to about 15 homes being sold a month. So far in 2009 (through May), there have been only 43 homes sold on Nantucket, or roughly half the monthly average we saw in 2008. Approximately 20% of the home sales so far in 2009 have been foreclosures, now making up nearly 10% of the market dollar volume. This is a sharp increase over 2008 numbers, which show foreclosures making up less than 1% of the total market in 2008.
The decline in the number of sales taking place, coupled with lower sales prices, is spilling over into the average and median home sales categories as well. So far in 2009 the average home sale is about $2 million, down about 21% from the approximate $2.561 million average home sale in 2008, while the median home sale so far in 2009 is $1.415 million, down about 20% from the $1.775 million median home sale for all of 2008.
In 2008, there were a total of 32 vacant lot sales with an average sale price of $1.550 million, there were 46 vacant lot sales in 2007, with an average sale price of just over $2.4 million. There have been 9 vacant lot sales so far in 2009, with an average lot price down about 28% from 2008 levels.
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. Early annualized predictions for 2009, based on permits issued to date, indicate a total of about half as many new single-family building permits being issued in 2009, as were issued in 2008.
So far in 2009 (the first five months), the Nantucket real estate market has just crested the $100 million dollar sales mark. In each of the past five years, it only took three months to surpass $100 million in sales (only one month in 2005 and 2006!). Not surprisingly, given the national economic picture, 2009 has begun on a much slower note than we are used to. Typically, the Nantucket real estate market is stronger in the second half of the year. 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.
June 2nd, 2009
