The Real Estate Report
with Robert Ranney
If we only knew then, what we know now. Real estate trends are often difficult to gauge until well after the fact. Most economists are now suggesting that our most recent 'boom' actually peaked in mid 2005, based on statistics available now. 2006 is now being considered a slowing year, with 2007 continuing that trend. Maybe now is a better time to buy than 2006 was. Let's take a look.

In May 2007, there were 31 total real estate transactions, representing about $52 million in dollar volume. In May 2006 there were 40 transactions with a dollar volume of about $87 million.

For the first five months of 2007, there have been 158 total transactions worth a total of approximately $286 million. In the first five months of 2006 there were 207 total transactions worth approximately $406 million. Obviously 2007 is off to a relatively slow start.

The average home sale for the first five months of 2007 is $2.4 million (up about 1 percent from the average home sale in the first five months of 2006), and the median home sale is $1.6 million (up 4 percent from the median home sale in the first five months of 2006). At this point, 2007 is a relatively 'flat' year as compared to 2006.

For the first five months of 2007, there were a total of 22 vacant lot sales with an average sale price of $2 million (there were 28 over the same period in 2006, with an average sale price of $2.15 million). That doesn't look too bad, however, the average vacant land sale is down about 11 percent from the average vacant land sale to this point in 2006. The median vacant land sale is down about 2 percent from the median vacant land sale to this point in 2007 versus 2006. So, are land prices falling? I doubt it. Comparisons are difficult with relatively few sales to go by, and it's too soon to tell. Like a bear coming out of hibernation, our market usually doesn't wake up until the middle of the year and then roars through the fall.

Often, commercial sales, or the lack thereof, can be a telling statistic about the state of the market. Many commercial sales suggest a healthy market. As of the end of May 2007, there have been only two commercial sales in 2007. At this point in 2006, there had already been seven commercial sales. Often, a lack of commercial sales indicates a general lack of market enthusiasm. Although, on Nantucket, a lack of commercial sales might just indicate that very little commercial real estate is available or that the commercial real estate that is available is too expensive to take on during a relatively flat real estate market.

Of all the real estate changing hands on Nantucket so far in 2007, 71 percent of all sales (houses, land, condos, timeshares, etc) were over $1 million. With prices still holding firm at the upper end of the market, 54 percent of all sales were over $2 million, while about 6 percent of all sales sold for under $1 million. These percentages are slightly above what they were in 2006, providing evidence that generally speaking, prices have not really declined. Although, it is possible that with rising mortgage interest rates and a tightening of lending standards, the so-called low end of the market (under $1 million) will see some erosion in prices as fewer buyers are able to afford this segment of the market - where only a year or two ago they could with readily available cheap loans. With many upper end properties purchased outright without the assistance of financing, prices over say $2 million will probably not be affected.

According to Nantucket's version of multiple property listing services, there are approximately 500 listings of properties for sale (houses, condos, vacant lots). Prices range from $225,000 for a condo-unit near the airport, to $23.5 million for a waterfront property in Shawkemo. The number of listings is relatively steady; however, many asking prices have been coming down recently. We will have to wait and see if this actually translates into a drop in sale prices or not.

So, do the first five months of 2007 as compared to the first five months of 2006 really help predict what the rest of the year will bring? Not really. This year is already slower than 2006 was. We may see some price declines, we may see some price advances, but it is likely just more of a "leveling off" period. We will just have to wait and see what tomorrow brings - as the future unfolds before us, lead by the statistics of yesterday. Maybe now is the best time to buy, before the housing market recovers and double-digit appreciation is once

again the norm. I

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 "denby.com" - the source for all your Nantucket real estate information, statistics and market analysis needs.