Real News - Oct 09

November 6th, 2009

“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.

Entry Filed under: The Real News