NANTUCKET MARKET NEWS
2009 FINAL
Last year turned out to be better than we had thought it would be. Anchored by the fourth quarter, in many ways 2009 and 2008 were similar: the total number of real estate sales on Nantucket was about the same with 237 closings compared to 248 in 2008. The most stark difference was the decline in total dollars. Total sales dollars in 2009 was $434 million compared to $574 million in 2008, a decline of 24%.
What about property values? The average home price was $1,945,000, compared to $2,271,000 in 2008, a decline of 14%. Perhaps more relevant, the median home price was $1,275,000, compared to $1,425,000 in 2008, down 10%. The average lot price was $970,000, compared to $1,915,000 in 2008 and the median lot price was $700,000 compared to $1,100,000 in 2008. Selling prices are at the same level they were in late 2004 just before the rapid escalation in property values. None of this is surprising, given the current economic climate.
One bright spot is the amount of time a Nantucket property is listed: The average months on the market, which has been at 11 months since 2007, is back down to 9 months, the same as in 2003. The fact that market time is declining is one of the leading indicators of a recovering market. The number of listings for sale now is slightly less than it was one year ago: 420 house, condos and coops and 68 pieces of vacant land. Atlantic East listings, as of the end of the year, have the lowest days on market, by a large margin, of any Nantucket real estate office. We are in the business of listing and selling, not just listing.
What kind of properties are selling? In the most simple terms, the properties that are selling are those that are priced to the current market. Always true, this is even more so during a recession because the competition is owners who have to sell. Foreclosure sales (either to a buyer or purchased back by the lender) made up 6% of the market in 2009. The number of new foreclosures is slowing down. The most active price sector in 2009 was the sale of houses between $1-$2MM with 70 sales, compared to 64 in 2008. It appears that consumer confidence is returning which will help to balance the market. According to National Association of Realtors, the long-term demand for second homes looks favorable because there are large numbers of people in the prime years for buying a second home.
How does the value of Nantucket real estate perform over time? In the past ten years the average selling price of a Nantucket home has increased from $666,000 to $1,945,000. The average selling price of vacant land has increased from $352,700 to $970,000 today. Take a look at the chart above to see how other major market indices have performed.
When is the best time to buy on Nantucket? Although we cannot predict the future, we believe that now is the best time to buy since early last decade. There was a market slump in 2002 which was followed by escalating property appreciation until 2006 when signs of the recession began. There continue to be opportunities for buyers with properties selling for 24% less than at the height of the market in 2005. If you are considering buying, you will be in a much stronger position if you do some work before starting to look at properties. It is very important that you be financially qualified before you start the process. Lending guidelines have tightened recently and you need to know how much you can spend.
What are the best deals? Best deals now are those whose sellers are realistic about pricing in the current market context. An experienced broker can guide you through the inventory and provide the information necessary to make an informed decision. The decision to buy is an individual one, but our advice is that, if you find a property that meets your needs not to wait. Make sure that you have access to our multiple listing service, LINK Nantucket, through your broker. With the most recent decline in interest rates, rates are 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 forever passed them by.