Market News
The year end real estate statistics are on everyone's mind. The numbers don't lie and it is apparent that the real estate market has lost some of its steam from previous years and has shifted into a period of adjustment. This correction has been predicted for some time by economists as the inevitable consequence of a rapidly growing market with unprecedented appreciation returns.
As most people familiar with Nantucket real estate will concur, the island housing market is truly unique and is not subject to many of the influences affecting primary markets. However, the statistics reveal a slowing trend as buyers and sellers alike assess the prospective direction of the market. Buyers continue to be hesitant about getting caught at the top of the market while many sellers remain tentative about making price concessions. These two factors have led to an increased inventory of available properties, which has shifted the dynamics of our market from a strong seller's market to one that is potentially more appealing to buyers. Although hesitant to imply that we are moving into a buyer's market, there is evidence to suggest that this transition period of adjustment is an excellent time to take advantage of sellers' pricing flexibility and motivation levels.
The total number of all sales reported by the end of October 2006 was 398, representing a dollar amount of $798,461,000. Compared to the same time last October, these figures represent a 31% decrease in the number of transactions and a 23% decrease in total dollar worth. However, even as these statistics reflect a slowing trend in the market, the average price for a home continues to escalate, increasing by 13% since 2005 from $2,164,000 to $2,372,000. The median price - a term used to identify the exact midpoint of the market - has risen by 6%, currently $158,750,000, up from $1,495,000.
The increased number of high end luxury sales continues to skew the average percentages while the median figures are more in line with the most active sales range. Properties selling between $1 - $2 million dollars continue to top the scale with 192 sales to date. In the $2- $3 million dollar range, there have been 96 sales and between $3 and $4 million dollars, there have been 45 sales. For properties selling over $5 million, there have been a total of 20 sales, including 9 sales over $10 million dollars. These figures indicate that the high end market has not been affected by the real estate slowdown as we see more and more demand for unique and distinctive properties.
The most impressive increase continues to be visible in the vacant land sector with average prices escalating an extraordinary109% in the past year. The average price for a piece of raw land is now $2,484,000 compared to $1,190,000 last year. The median price is currently $1,087,500 compared to $700,000 in 2005, an increase of 55% in a year's time. There have been 51 vacant land sales so far this year.
These statistics signify that Nantucket real estate is still considered a lucrative and solid investment due to several factors, not least among them the fact that there is a dwindling supply of vacant land left for development. With almost one half of the island's vacant land being held in conservation, therefore preserved from future development, the island's growth potential is becoming more and more limited. This basic theory of supply and demand continues to strengthen the reputation of the island's real estate market as one of stability, desirability and sound investing.
