A buyer’s market

Brokers consider Nantucket Real Estate a buyer’s market, in terms of purchase prices as well as the fact that 30-year fixed mortgage rates are at a historic low of five percent and an $8,000 first-time buyer tax refund incentive remains in place.

“I can’t emphasize enough that it is a good time to buy,” said Penny Dey, co-owner of Atlantic East Real Estate. “I think our average prices right now are slightly higher than at the end of 2004 before the precipitous increase in value. We are not going to see the escalation of 2005, 2006 and 2007, which is fine because it’s not sustainable.”

In Dey’s estimation, with which Bill Liddle, president of the Nantucket Association of Real Estate Brokers agrees, 2010, while only at its start, is looking strong in the real estate world according to the amount of property being shown and going under contract. It will be a couple of months before the first year’s quarter ends and brokers can get a better idea of where the market stands.

“I can’t wait to see the numbers, but 2009 wasn’t as bad as I thought it was going to be,” Dey said.

“I think for sure, 2009 was a really challenging year for anyone in the real estate industry on Nantucket, however we saw positive signs of change starting in September where the monthly sales numbers exceeded the previous year,” added Liddle.

“December was a particularly hopeful month because it was the best December we had in previous years going back to 2005. December 2009 outperformed the Decembers of 2006, 2007 and 2008 in terms of dollar volume.”

Dey anticipates a slow but steady recovery this year, using an increase in transactions as the definition of recovery, in part because of low interest rates and prices along with a show of restoration in consumer confidence. She also views a new buyer profile as a sign of better times ahead.

“I’ve noticed first time summer buyers who have rented here for years and never thought they would be able to buy,” she said. “I’m feeling better than I was a year ago. Nantucket is still a place where people want to be.”

Liddle concurs.

“We are entering 2010 with greater expectations and hope we will see a nice improvement in our local economy,” he said. “I think the measure of volume of real estate on Nantucket has a direct correlation to the financial health of the island.”

A glimpse at the past

real estate markets

According to data collected through the end of December, the island’s real estate market in 2008 was similar to 2009, with the exception of a 24 percent reduction in sales dollars last year.

In 2008 there were 248 property transfers, including commercial real estate and open land, but excluding timeshares. In 2009 there were 237 transfers, a dip of just 4.4 percent. The average home price in 2008 was $2,271,000 and in 2009 it was $1,945,000, a reduction of 14 percent. The sectors where more homes sold in 2009 than the prior year were in the $500,000 to $1 million range with 55 of those sales last year compared with 47 in 2008. That was also true of the houses, condos and co-ops in the range of $1 million to $2 million, excepting commercial properties and timeshares, with 70 sales in 2009 and 64 in 2008.

As of the close of December there were fewer than 500 properties available, approximately the same volume as at the end of December 2008. I