Real News - Jun 09

July 6th, 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.

Entry Filed under: The Real News