Following is the text from an interview that I recently did on the state of the Nantucket Real Estate Market.
Where is the market right now?
The first five months of the year the number of sales more than doubled over 2009. The dollars that those sales represent are up 72%. This likely portends the beginning of a market turn around. It clearly remains a great market for buyers with prices at their lowest since the last market escalation which began in 2002. The inventory continues to be high, with over 600 properties on the market, giving choices to buyers. And interest rates remain at historical lows.
There has been talk recently of signs pointing to a national recovery. What is your take on when we’ll feel the full and lasting effects of any recovery on Nantucket?
Although we cannot predict the future, the 2010 Nantucket real estate market is tracking to improve over 2009 by roughly 25% by the end of the year, in terms of both the sales volume and dollars. Nantucket typically feels the effects of an economic downturn later than other markets and tends to come out of it more rapidly. Nantucket is primarily a second home market which behaves differently than a primary one.
What is the state of the rental market?
The rental market is significantly stronger than the last few years, indicating that people are willing to spend again on non-essentials.
What kind of properties are selling now?
Those properties that are priced correctly are selling now. Most sellers understand that in order to sell, they must price their property to the current market. Sellers are competing now with others who may be more motivated to sell, and therefore, more realistic about pricing.
What area(s) do you think is/are undervalued right now? What area(s) do you think best retain its/their value over time?
It is difficult to generalize about particular areas as there are great opportunities right now in all sectors of the market. However, the island as a whole has retained value extremely well over the past decade. The average Nantucket house is worth 3 times what it was 10 years ago; the Dow Jones Industrial Average is worth less than it was 10 years ago.
Are you seeing any movement in the sale of land, either up or down from previous years?
Land sales have been off the past few years, not surprisingly, given the economic conditions. In many cases, a buyer can buy a finished house for about the same price of buying land and building. And they can use the property right away rather than taking a year or more to build. Land sales will remain slow until some of the existing inventory is sold.
Penny Dey, Broker, GRI, ABRM
Penny has worked in real estate on Nantucket full-time for nearly 30 years. She is co-owner of Atlantic East Real Estate and former president of the Nantucket Association of Real Estate Brokers.