REAL ESTATE REPORT
with Robert Ranney

"It's tough to make predictions, especially about the future."

- - Yogi Berra New years invariably start with predictions about the year ahead and commentary about the year just gone by. Predictions for real estate markets are most often based on previous years or past trends. Will 2008 continue the flat trend demonstrated by 2007? Will the Nantucket real estate market see an actual 'down year' (something many of us haven't seen in over 10 years) or will 2008 surprise some of the economists who aren't predicting a return to actual market appreciation until 2010?

In 2007, there were 446 total transactions worth a total of approximately $841 million. By comparison, in 2006 there were 475 total transactions worth approximately $917 million. The number of transactions (all sales) was down about six percent from 2006 and the total dollar volume of those transactions was down about eight percent from 2006. The average home sale in 2007 was $2.25 million down about five percent from 2006, while the median home sale in 2007 was $1.56 million, up about one percent from 2006. It seems that overall, 2007 remained relatively close to 2006.

In 2007, there were 301 homes sold with a total dollar volume of about $678 million. In 2006, there were 284 homes sold for a total of about $675 million.

In 2007, there were 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 ended 2007 up about four percent from 2006, and the median lot sale price up about 17 percent.

In 2007, there were only five commercial sales. There were nine in 2006.

Of all the real estate changing hands on Nantucket in 2007, 74 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, 57 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 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 9 percent versus 2006 (in 2006 the average home under $1 million sold for $828,000, while in 2007 it was $754,000).

In 2007 there were only 127 new single family building permits issued. The slowest year since 1990 and 1991 (112 and 114 respectively). Couple this with the fact that there were no vacant lot sales at all in December 2007 and that 2007 saw the fewest vacant lot sales of any year in recent memory, and it looks like either Nantucket is running out of buildable land quicker than we thought, or the speculation of buying vacant land and building new homes has virtually evaporated, a sure economic sign of slower times ahead, at least in the near term.

According to Nantucket's versions of multiple property listing services, there are just under 500 listings of properties for sale (houses, condos, vacant lots, etc). Prices range from $275,000 for a condo unit near the airport, to $19.75 million for a waterfront property in Squam. The average sale is now taking place at about 88 percent of its asking price and average time on the market is now averaging about nine months.

Frank Nothaft, chief economist at Freddie Mac, notes that recent weak economic reports have "renewed concerns about economic conditions in the near future." This, in part, has caused average mortgage rates to come down recently, with some rates seeing their lowest levels since September 2005, thus creating somewhat of a silver lining for homeowners looking to refinance.

Whatever the future holds, fundamentally, 2007 ended with very similar overall numbers as 2006 did. With a new year comes a fresh perspective, new hopes and a fresh look at old hindsights. The nearby chart shows that scallop prices per pound and median home prices seem to move in relative tandem, while the only correlation to building permits seems to be that as the number of building permits declines, scallop prices and median home prices tend to enter relative flat periods, after which

there are modest increases. 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.