REAL ESTATE REPORT
with Robert Ranney

Annual percentage change: Dow Jones Industrial Average vs average Nantucket home through December 31, 2007 ©2007 Nantucket Listing Service, Inc.

"Every economy is uncertain. Referring to this or any economy as "uncertain" is an unnecessary and pessimistic redundancy."

- Bo Bennett

Uncertainty in the national economy, and in many housing markets around the country, is an almost constant topic in most financial discussions these days. Nantucket, although somewhat shielded from national economic woes, often still feels the undertones of national economic issues, though usually after somewhat of a lag, or to a lesser degree, than many other markets. So, after two months, how 'uncertain' is 2008 so far? Let's take a look.

For the first two months of 2008, there have been 52 total transactions worth a total of approximately $111 million. By comparison, in the first two months of 2007 there were 49 total transactions worth approximately $91 million. The number of transactions (all sales) is up about one percent compared to this point in 2007 and the total dollar volume of those transactions is actually up about 23 percent from this point in 2007. Thanks to a handful of sales over $5 million, the average home sale in 2008 (thru February) is hovering around $3 million, up from about $2.5 million at this point in 2007, while the median home sale is $2.1 million, up from the $1.625 million median home sale at this point in 2007.

Seemingly, Nantucket real estate is booming compared to this point in 2007, right? Well, not exactly. In the first two months of 2008, there were 28 homes sold with a total dollar volume of about $84 million. During the first two months of 2007, there were 34 homes sold for a total of about $83 million.

So far in 2008, there have been a total of four vacant lot sales with an average sale price of $1.128 million; there were four vacant lot sales to this point in 2007, with an average sale price of $1.29 million.

In all of 2007, there were five commercial sales. There have been four already this year.

In 2007 there were only 127 new single family building permits issued, the slowest year since 1990 and 1991 (112 and 114 respectively). There have been 11 issued so far in 2008, a pace that is about half of what it was in 2007.

If new home permits are used as an indicator for Nantucket real estate, 2008 is not looking very strong, although this can be an imperfect indicator on Nantucket, with relatively little available land on which to build, even in boom years.

Perhaps some hopeful news for buyers, though not necessarily for sellers, is that the average sales price for homes under $1 million has dropped by about 10 percent from 2007 levels.

Over the past 20 or so years, another real estate trend indicator for Nantucket has developed: (as shown in the chart above). Nantucket's real estate market tends to track the Dow Jones Industrial Average, with about a six-to-12-month lag time. With the Dow seeming to test current lows recently on an almost daily basis, the worst for us is probably still to come (sales

above $5 million notwithstanding!). 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 Nantucket Comparable Sales service, a subsidiary of Nantucket Listing Service, Inc.