Real News - Dec 2009

January 20th, 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.

Entry Filed under: The Real News