The third quarter was solid. Anchored by the month of September, the third quarter saw an increase in sales – both in number of transactions and dollars. The total of $62.4 million in sales exceeded that of the entire second quarter of the year. In addition the average sale price of a house increased in September to $1,793,000 from $1,308,000 in August. As of the end of the 3rd quarter there have been 133 sales of homes, condominiums, land and commercial properties on Nantucket. In 2008 there were 186 transactions for the same period. The total dollars sold so far in 2009 are $237 million, down from $435 million in 2008. Not surprising given how slow real estate activity was for the first half of this year.
How much has real estate declined on Nantucket? The highest average house price ever was $2,378,000 in 2006, 20% higher than it is now. The highest average vacant land price ever was $2,078,000 in 2008; it is now $881,000, 57% less than it was at the height of the market. Average selling prices of Nantucket real estate are at about the same levels they were in late 2004, just prior to the rapid escalation in value. The market on Nantucket went through a period of unsustainable appreciation and has been correcting now for more than two years.
Why should buyers buy now? Only you can make the decision of when to buy, but our advice is that, if you find a property that meets your needs, it will likely meet someone else’s needs too. Our last five sales have had multiple offers from different buyers. Buyers are educated about the market and understand value in the context of the current market. With a high number of properties to choose from, opportunities exist. If you are a buyer, educate yourself about the current market. Make sure that you have access to our multiple listing service, LINK Nantucket, through your broker. Be financially qualified before you start to look at property so that you know what you can realistically afford to buy. Be prepared to have a number of properties on your short list. If you are not able to buy the first one, then move on to the next. With the most recent decline in interest rates, they are at the lowest they have been since the early 1980’s and conforming loan limits have been significantly raised, even on Nantucket. Many of today’s buyers are those who thought the market had passed them by some years ago.
What about foreclosures on Nantucket? Foreclosure and short sale properties make up approximately 9% of the total sales so far this year. It takes patience and the ability to buy without contingencies to pursue this type of property. It can take up to 12 months or longer to close one of these sales. Most foreclosures on Nantucket have been for entry level properties. Nationally, only 7 out of 10 foreclosure or short sales actually end up selling to a buyer.