Real News - Jan 2010

January 13th, 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.

Entry Filed under: The Real News