REAL ESTATE REPORT
with Robert Ranney

"Well, real estate is always good, as far as I'm concerned."

- Donald Trump

With the first half of 2007 in the books, real estate is perhaps better now for buyers than it is for sellers. Everything is relative. After a few years of sellers having all the fun, maybe now the market is letting buyers have their turn. With much of our year on Nantucket spent waiting to see what summer brings, it's perhaps too soon to tell if we are in a buyer's market or not. After all, a buyer's market usually means falling or even rock bottom prices - is such a thing even possible on Nantucket? Everything is relative.

For the first half of 2007, there have been 193 total transactions worth a total of approximately $331 million. In the first six months of 2006 there were 249 total transactions worth approximately $484 million. Obviously 2007 is off to a relatively slow start.

For the first time in five years, both the average home sale and the median home sale are declining from the previous year, as well as both the average vacant lot sale and median vacant lot sale. Even the average sale price for all sales combined (home, land, condos etc) is down 11 percent from 2006. The first time that number has fallen since 2002.

For the first six months of 2007, there were a total of 26 vacant lot sales with an average sale price of $1,881,000 (there were 59 vacant lot sales in all of 2006, with an average sale price of $2.311 million).

Often, commercial sales, or the lack thereof, can be a telling statistic about the state of the market. Lots of commercial sales suggest a healthy market. As of the end of June 2007, there have been only two commercial sales so far in 2007. There were nine altogether in 2006.

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, 53 percent of all sales were over $2 million, while about six to seven percent of all sales sold for under $1 million. These percentages are about what they were in 2006, providing evidence that generally speaking, prices have not really declined.

According to Nantucket's versions of multiple property listing services, there are approximately 550 listings of properties for sale (houses, condos, vacant lots, etc). Prices range from $225,000 for a condo-unit near the airport, to $21.5 million for a waterfront property in Squam. The number of listings has increased recently, though not markedly so, and yes many asking prices have been coming down. We'll have to wait and see if this actually translates into a drop in sale prices or not. Certainly, lower asking prices is a good sign for buyers.

As we all know, Nantucket is a predominantly second home market, relying heavily on vacationers, and other second-home buyers to support the local real estate market. According to a report from the American Affluence Research Center, the wealthiest 10 percent of Americans indicated in a survey that they were less likely to purchase a second home than they were two years ago. In March, 4.6 percent of the respondents said they were seriously considering the purchase of an existing second home with the next year and 1.9 percent said they were interested in building a second home.

In the spring of 2005, 6.3 percent of those surveyed had answered positively to the same question about existing homes and 4.2 percent said they were considering building a second home. Ron Kurtz, the center co-founder, credited the dropping interest in second homes among the wealthy to interest in the stock market and anticipation of better housing bargains still to come. If only the respondents in this survey were asked about buying a second home on Nantucket (as an investment or just as a second home) and then they were shown this chart!

Truly the appreciation in real estate on Nantucket in the longer term is astounding compared to the rest of the world. Besides, where else would you rather be sitting in traffic?

So, does the first half of 2007 give us an indication of the state of the current market? Yes and no. 2007 is already slower than 2006 was and this trend is being seen in many markets all over the country.

Is it time to panic? I don't think so. We needed a breather anyway. Besides, real estate is always good,

especially on Nantucket. I

- Rob Ranney

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.