The market continues to show signs of recovery with the number of sales, and the dollars that those sales represent, up over 100% for the second quarter of 2010 compared to the same period in 2009. The average selling price is on the rise; properties are now selling for 90.5% of the list price. This does not mean that we are experiencing appreciation across the board; it means that listing prices are more realistic.
The Town of Nantucket has just completed the state-mandated revaluation of all property on the island and many Nantucket property owners were surprised to see the assessed value of their property increase. The Town used market data from 2006-2008 to determine values as of January 2009. The actual real estate market is not supporting these new assessments with properties selling, on average, for 88% of assessed value – the lowest it has been during the past decade. The window for filing for a property tax abatement has now closed but, if you are a property owner and feel that you have a case for lowering your assessed value, you will have an opportunity again next year.
The average price of a home on Nantucket is now $1,656,000, about what it was in 2004, prior to the rapid escalation of values on island. The median price of a home is now an even $1MM. The average price of a vacant lot has climbed back to $1,401,000, about where it was in late 2005. The median price of a vacant lot is now $950,000. Prices for vacant land have started to climb again and prices for houses have declined compared to 2009 but the rate of decline is slowing.
The number of properties listed for sale is the highest it been in the past decade. There are currently 596 houses on the market and 85 pieces of vacant land totaling 681 listings (not including commercial). A word of caution if you are a seller: it is more important than ever to price your property correctly since you are competing with sellers who may be more realistic (motivated)? than you are. If the goal is to sell the property, and not to just list it, the property must be priced to the current market. The average time that a Nantucket property is on the market is 9.5 months, down slightly from 2009. This number will only decline after some of the backed up inventory is sold.
Buyers have many options to choose from. Because of the large number of properties on the market, buyers have many choices. And there are opportunities in all sectors of the market (location and price). Our experience tells us that if a buyer encounters a recalcitrant seller, they will simply move on to another property, especially if the initial property is overpriced.
What is selling? Besides the obvious answer that properties that are priced correctly are selling, we continue to see some strength in the market in Town and on the water. The least expensive sale in 2010 to date was $187,000 for a 3 bedroom, 2 bath condominium in Madaket. The most expensive sale was a waterfront estate property in Shawkemo for $19,200,000. Half of all real estate sales in 2010 have been under $1MM.
What about foreclosures? There continue to be a number of foreclosure sales on the island. Roughly 8% of the transfers for the first half of 2010 were foreclosure sales. In most cases the foreclosing lender or bank purchased the property back and these listings are starting to trickle onto the market. Beware of buying at foreclosure or of buying a bank-owned property – the process can take much longer than a conventional transaction and the buyer typically does not have the same opportunity for due diligence. These properties are most often sold in “as-is” condition. If you still wish to pursue this type of property, make absolutely sure that you are well represented with a broker and an attorney, preferably a local one.