the real news - nov 2014

“There’s a fine line between fishing and just standing on the shore like an idiot.”

-- Steven Wright (1955 -) Comedian

 

October is typically one of the busiest months of the year for the Nantucket real estate market and October 2014 is no exception. With only two months left in 2014, what do the real estate numbers tell us about the 2014 market? Let’s take a look.

 

In real estate analysis, we must look backward to look forward. Looking back over recent years (for comparison to 2014), we see that in the first ten months of 2012 there were a total of 411 total transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 309 during the first ten months of 2011 and 325 in 2010. The total dollar amount of real estate changing hands in the first ten months of 2012 was approximately $599 million, while in 2011 it was approximately $426 million and approximately $546 million in 2010.

 

Through the end of October in 2013, there were a total of 413 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc) with a total dollar volume of approximately $621 million, up about 0.5% in number of transactions, and up about 4% in total dollar volume from the same period in 2012. By comparison, in the first ten months of 2014, there were 484 total transactions, with a total dollar volume of about $830 million, a 17% increase in transactions and a 34% increase in dollar volume over the same period in 2013. By the numbers, 2014 is significantly better in comparison to any of the first ten-month periods for any of the past 5 years.

 

Foreclosures and foreclosure related transactions made up approximately 7% of the overall market in 2010, with approximately 35 foreclosures and foreclosure related sales taking place. This unfortunate statistic continued in 2011, showing some signs of slowing, with an estimated 23 foreclosures and foreclosure related transactions taking place, making up about 2% of the market in 2011 (based on dollar volume). For 2012, there were an estimated 35 foreclosures, representing approximately 3% of the market based on dollar volume. In 2013, there were an estimated 12 foreclosures, representing about 1% of the market. As of the end of October 2014, there have been an estimated 8 foreclosures so far in 2014, representing approximately 1% of the market by dollar volume.

 

The average home sale in 2011 was approximately $1.635 million, down about 26% from 2010, while the median home sale was approximately $1.195 million, down about 2% from 2010 levels. These numbers also reflect the fact that there were only 8 home sales over $5 million, representing 13% of the overall market and 2 home sales over $10 million in 2011. Whereas, in all of 2010 there were 23 home sales over $5 million, with eight home sales over $10 million, and in 2009 there were 12 home sales over $5 million and 6 over $10 million.

 

In 2012, the average home sale was $1.854 million, up about 13% from the average home sale for all of 2011. Further, there were 42 sales over $3 million, with 19 of those over $5 million, and 5 over $10 million in 2012, compared to only 27 sales over $3 million for all of 2011 and only 8 over $5 million. Helping to boost the average home sale is the upper end of the market. The average sale in the $500,000 to $999,000 range was $749,000, up 6% from 2011’s numbers. At the end of 2013, the average home sale was $1.94 million, up about 5% from the average home sale in 2012. Additionally, in 2013 there were 17 home sales over $5 million, with eight of those over $10 million, representing 24% of the market by dollar volume; as compared to 2012 which saw only 21% of the market comprised of home sales over $5 million. So far in 2014, through the end of October, there have been five home sales over $10 million, 22 home sales over $5 million (representing 21% of the market), and 202 sales over $1 million (or about 68% of the market by dollar volume).

 

Vacant land sales increased modestly in 2010 versus 2009, with a total of 42 vacant lots sold.  The average lot sale in 2010 was up 29% over 2009 and the median lot sale was up 41% compared to 2009. For 2011, there were 43 vacant lot sales, only 1 more than in 2010. In 2012, there were 83 vacant lot sales, with an average sale price of $1.375 million, compared to the 43 vacant lot sales for all of 2011 with an average sale price of $1.853 million (2011’s average vacant land sale was skewed by a $12 million lot sale, as well as an $8 million lot sale and another at $6 million). In the first ten months of 2013, there were 71 vacant lot sales, with an average lot sale of $822,000. By comparison, so far in 2014, through the end of October, there have been 81 vacant land sales, with an average lot sale of $1.144 million, or a 44% increase over the average for the same period in 2013.

 

2009 is the record holder for the year with the fewest number of building permits being issued since 1972 (the first year building permits were required and thus records were kept), with a total of only 44. 2010 ended with a total of 53 new single-family permits being issued, perhaps a glimmer of hope, and 2011 saw 54 single-family permits issued, only 1 more than were issued in 2010. In 2012, 58 single-family permits were issued in 2012, a modest increase over 2011. In 2013, there were 108 single-family permits issued, a significant increase over recent years. In the first ten months of 2014, 114 single-family permits were issued, an annualized rate of 137, at the current pace.

 

Overall sales volume (number of transactions) and dollar volume of those sales were down in 2013, compared to 2012’s numbers. The numbers for 2013, in comparison to recent years, show a market generally increasing from the lows of 2009, but doing so in much the same way a train starts off from the station, jerking awkwardly at first, but gradually gaining momentum. Through the end of October, 2014 is much stronger than any other year out of the past five, with 2012 at a close second. Stay tuned.

 

By Rob Ranney

- a student of the current real estate market, and a licensed real estate salesperson since 1987, Rob has been contributing to real estate appraisals with Denby Real Estate, Inc. since 1996 as an apprentice appraiser, construction progress inspector for numerous financial institutions, market statistician, REALTOR, and leading researcher and data collector for Denby Real Estate, Inc., the source for all your Nantucket real estate information, statistics and market analysis needs.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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