Real News - Jul 09

August 14th, 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.

Entry Filed under: The Real News