REAL ESTATE REPORT
with Robert Ranney
"No real estate is

permanently valuable but the grave."

- Mark Twain The year 2007 is coming rapidly to a close and good riddance! Take your wild Wall Street rollercoaster rides of the stock market, your housing market slump, your credit worries, your high oil and gas prices, your national foreclosure rates that scared the pants off all but the most hardened old timers who claim to have seen worse only during the Great Depression. Be Gone, 2007!

For the first eleven months of 2007, there have been 425 total transactions worth a total of approximately $794 million. By comparison, through the first eleven months of 2006 there were 440 total transactions worth approximately $881 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 10 percent from 2006. It seems that, overall, 2007 has remained relatively close to 2006, although with December still needing to be accounted for, 2007 seems a tad weaker. Not surprising, given all the problems associated with the housing market nationally.

So far the Nantucket market seems to be on the outskirts of some of the more dire effects of national economic woes. The big question is how long can we remain "30 miles out to sea" compared to the rest of the country. "A mild U. S. recession is now likely, with no growth for the year ahead," Richard Berner, Morgan Stanley chief U. S. economist, said this week. Housing continues to be the single biggest drag on the economy, economists say. The Mortgage Bankers Association said recently that nearly 20 percent of higher-cost subprime adjustable mortgages were past due in the third quarter. The number of prime mortgage loans in default is also climbing. It's probably too soon to tell how much all of this affects our local market, since most of the properties on Nantucket are owned by non-resident taxpayers, typically as vacation or second homes, with most of those not under mortgage-based or even interest rate based, financial pressures.

As of the end of November 2007, there have been 286 homes sold this year with a total dollar volume of about $632 million. As of the end of November 2006, there had been 266 homes sold for a total of about $648 million.

Through November 2007, there have been a total of 46 vacant lot sales with an average sale price of $2. 4 million (there were 59 vacant lot sales in all of 2006, with an average sale price of $2.3 million). The average lot sale price is now up about four percent from 2006, and the median lot sale price up about 17 percent. These rates are drastically less than the 94 percent change in average lot price we saw in 2006 versus 2005.

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

So far in 2007 there have been 122 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, 73 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, 56 percent of all sales were over $2 million, while about sixto seven percent of all sales sold for under $1 million. These percentages are slightly higher (one percent, respectively) than they were in 2006, providing evidence that generally speaking, sale prices have not really declined yet. Although, the average home sale price in the under $1 million category has dropped nine percent versus 2006 (in 2006 the average home under $1 million sold for $828,000, while in 2007 it is selling for $750,000). This is most likely due to a recent flurry in sales of so-called "affordable" houses, a result of 40-B housing developments.

According to Nantucket's versions of multiple property listing services, there are just over 500 listings of properties for sale (houses, condos, vacant lots, etc) - a solid drop from last month when there were just over 600 listings. Prices range from $299,000 for a vacant lot on Williams Street, to $19.75 million for a waterfront property in Squam. The average sale is now taking place at about 89 percent of its asking price and average time on the market is now averaging about nine months.

As 2007 nears an end, thoughts begin to turn to 2008. Will 2008 continue the market trend lines of 2007? Will the market remain flat in 2008? Will 2008 see the bottom of the current cycle? Will 2008 see renewed market vigor? Do we have to wait till 2009 for a rebound in real estate? Will there be a

white Christmas on Nantucket? 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.