REAL ESTATE REPORT
with Robert Ranney

"In the business world, the rearview mirror is always clearer than the windshield."

- Warren Buffett

With September behind us, the real estate numbers for the first three quarters of 2007 are in, and they don't look quite as bad as they did earlier in the year. In fact, compared to 2006, 2007 is not too far behind, and actually ahead of 2006 in some comparisons.

For the first nine months of 2007, there have been 339 total transactions worth a total of approximately $620 million. By comparison, through the first nine months of 2006 there were 351 total transactions worth approximately $705 million. The number of transactions (all sales) is down about three percent from this point in 2006 and the total dollar volume of those transactions is down about 12 percent from 2006.

However, for just the months of July, August and September (the third quarter), 2007 was actually stronger than the third quarter in 2006. During the 2007 third quarter there were a total of 146 transactions, with a total dollar amount of about $289 million. In the third quarter of 2006 there were a total of 102 transactions with a total dollar amount of $220 million. Even if we take out the single largest residential real estate transaction in Nantucket history ($26.5 million in Eel Point, August 2007), the 2007 third quarter was stronger than the 2006 third quarter, measured in both dollar volume and total number of transactions.

Focusing just on home sales, as of the end of September, there have been 217 homes sold this year with a total dollar volume of about $486 million. At this point in 2006, there had been 216 homes sold for a total of about $529 million. But just in the third quarter, 2007 saw 97 homes sold for a total of about $225 million, while the third quarter in 2006 saw only 67 homes sold for a total of about $185 million.

Through September 2007, there have been a total of 40 vacant lot sales with an average sale price of $2.6 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 11 percent from 2006, and the median sale price up about 17 percent.

As of the end of September, there have still been only three commercial sales so far in 2007. There were nine altogether in 2006.

So far in 2007 there have been 111 single-family building permits issued. If this pace continues, 2007 will be the slowest new single-family building permit year in a decade. 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, 55 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 600 listings of properties for sale (houses, condos, vacant lots, etc.). Prices range from $225,000 for a condo-unit near the airport, to $19.75 million for a waterfront property in Squam. The least expensive vacant lot is currently listed for sale at $375,000, with the most expensive lot currently listed at $15.5 million. The number of listings has been slowly increasing over the past few months, with the average sale now taking place at about 90 percent of its asking price.

The relative "strength" in the island real estate market seen in the third quarter has taken what was shaping up to be a truly negative year, and made it more of a "break even" year. After two, billion-dollar sales years in a row (2004 and 2005) and then a slower 2006 ($900 million), 2007 still appears to be continuing the mildly cooling trend. At the current pace, 2007 will likely end up mirroring 2006. 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'll have to

wait and see what the fourth quarter will bring. I

A student of the current real estate market, and a licensed real estate salesperson since 1987, Rob Ranney 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.