REAL ESTATE REPORT
with Robert Ranney
Labor Day has left us with noticeably fewer traffic jams and perhaps less stressful journeys to the grocery store. In many tourist towns, the end of summer often brings comparisons to previous years as to how 'busy' it was or how 'good' it was for local merchants. As for our real estate market, it is difficult to claim a 'good' summer as most sales take months to close. Those that do close during the summer have generally been in the works since the spring. But, looking simply at the closed transactions during July and August, the summer of 2007 was pretty good.

For the first eight months of 2007, there have been 271 total transactions worth a total of approximately $510 million. In the first eight months of 2006 there were 313 total transactions worth approximately $598 million. The number of transactions (all sales) is down about 13 percent from 2006. Total dollar volume of those transactions is down about 14 percent from 2006.

July and August of 2007, however, were much stronger than 2006. In July and August 2007 there were a total of 78 transactions, with a total dollar amount of about $179 million. In July and August 2006 there were a total of 64 transactions with a total dollar amount of $113 million. Even if we take out the single largest residential real estate transaction in Nantucket history ($26.5 million in Eel Point, August 2007), 2007 was still a better summer than 2006, measured in dollar volume.

Focusing just on home sales, as of the end of August 2007, there have been 174 homes sold this year with a total dollar volume of about $397 million. At this point in 2006, there had been 188 homes sold for a total of about $436 million. But just in the months of July and August, 2007 saw 54 homes sold for a total of about $136 million, while 2006 saw only 39 homes sold for a total of about $93 million. In 2005, the best real estate year in Nantucket history in terms of dollar volume, there were a total of 62 homes sold for a total of about $136 million. Does this mean 2007 will end up like 2005? Not likely. Despite a strong summer, 2007 is still only on pace to fall just shy of 2006 dollar volume totals.

Through August 2007, there have been a total of 35 vacant lot sales with an average sale price of $2.5 million (there were 59 vacant lot sales in all of 2006, with an average sale price of $2.3 million). The number of lot sales is about even with 2006, with the average lot sale price now up about 10 percent from 2006. The median sale price is up about 20 percent. These statistics are skewed upwards quite a bit by the $26.5 million dollar sale mentioned above. If we take that sale out, the median vacant lot sale in 2007 is up about 17 percent. The average vacant lot sale is actually down about 20 percent.

As of the end of August 2007, there have still been only two commercial sales so far in 2007. There were 9 altogether in 2006.

So far in 2007 there have been 101 single-family building permits issued. If this pace continues, 2007 will be the slowest building permit year since 2002.

Of all the real estate changing hands on Nantucket so far in 2007, 72 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 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, sale prices have not really declined yet.

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 been relatively steady over the past few months, with the average sale taking place at about 90 percent of its asking price.

The relative "strength" in the local real estate market for the past two months has really taken what was shaping up to be a truly negative year, and made it simply a 'break even' year.

Despite a strong summer, measured mostly in dollar volume, 2007 still seems to be a stabilizing or "leveling off" year. After two billion dollar sales years in a row (2004 and 2005) and then a slower 2006, 2007 still appears to be continuing the cooling trend. It may just be that the "good" summer we just had was really just a big cobblestone on the Main Street of our real estate year. With the national real estate market still very uncertain and experts disagreeing over the amount of time needed to shake off excess inventory, sub-prime woes, increasing foreclosures and simply recover to a more normalized housing market; we will have to see if this fall on Nantucket will be as nice as summer was. Will our real estate market experience an "Indian Summer" and stay relatively warm

or will winter chills come early? I
Number of all transactions (July/August)
2007: 78
2006: 64
Total dollar amount (July/August)
2007: $179 million
2006: $113 million
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Number of home sales (July/August)
2007: 54
2006: 39
Total dollar amount of home sales (July/August)
2007: $136 million
2006: $93 million

- Rob Ranney is 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 Nantucket real estate information, statistics and market analysis needs.