August Market Insights - Nantucket Real Estate

NANTUCKET REAL ESTATE Market Insights BY JEN ALLEN MONTHLY SALES HIGHLIGHTS

LONGEST SALE

HIGHEST SALE

$9,200,000

$1,807,511

2 BUCK HOLLOW WAY (10-LOT SUB) PRIVATE SALE

$5,450,000

53 WASHINGTON STREET MARKETED FOR [191 Days]

FISHER’S

76 MILLBROOK ROAD MARKETED FOR [11 Days]

KEY MARKET STATISTICS

REVIEW

ALL PROPERTY TYPES

FY 2022

Transactions

For the second time this year, monthly

Dollar Volume ($ in 000s)

dollar and transaction volume significantly

% CHANGE YOY

5-YEAR AVG.

252

432

-42% f

281

$866,948

$1,182,076

-27% f

$761,787

2.8

4.9

-43% f

5.6

97%

95%

2d

95%

Avg. Months on Market

trailed prior year figures and year-to-date

FY 2021

average monthly volume figures. Limited

Sale Price to Last Ask Price

inventory certainly continued to play a

Active Listings (August)

160

161

-1% f

319

role in reduced volume but rising interest

Months Supply of Inventory

3.5

2.3

51% d

9.7

rates and a volatile stock market likely

New Contracts (August)

43

83

-48% f

81

put additional pressure on transaction activity. August 2022 sales included 18 transactions totaling $55.5 million, a steep

NANTUCKET REAL ESTATE ACTIVITY

decline of 55 percent and 61 percent

THROUGH AUGUST 2011–22

respectively from one year ago and well off of the $100M+ monthly volume previously posted in 2022. These sales brought 2022, to 252 transactions totaling $867 million. While this is well below the $1.18 billion tallied through this time last year, it’s handsomely above pre-2020 figures for

# of Transactions

year-to-date figures through August 31,

Dollar Volume

AUG 22

LAND BANK PURCHASE

the same period. The question is whether this reduced transaction volume is the beginning of a new trend as we approach the fourth quarter, typically among the strongest quarters of the year. Here are Fisher’s August Market Insights…

Dollar Volume per Quarter

Q1

Q2

Q3

# of Transactions

© 2 0 2 2 F I S H E R R E A L E S TAT E

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

1

NANTUCKET REAL ESTATE Market Insights SINGLE-FAMILY HOME SALES SUMMARY

SINGLE-FAMILY HOME SALES BY PRICE POINT

MONTHLY HOME SALES DROPPED SIGNIFICANTLY

HIGH-END ACTIVITY WAS LIGHT IN AUGUST

Total Sales Dollar Volume Avg. Selling Price Median Selling Price Avg. Months on Market Avg. Price as % of Last Ask Avg. Price as % of Original Ask Avg. Price as % of Assessed Value

2021

% Change

5-Year Avg (2018-22)

159

268

-41% f

188

$669,849,740

$879,732,398

-24% f

$588,343,007

$4,212,891

$3,282,584

28% d

$3,127,139

$3,195,000

$2,562,500

25% d

$2,310,750

2.9

4.4

-35% f

5.7

97%

96%

2d

94%

96%

93%

4d

91%

189%

153%

37d

146%

•

August single-family home sales (excluding condos, co-ops & covenant properties) fell to just 10 transactions in 2022 compared to 25 in 2021 and 26 transactions over the five-year average.

This naturally led to a sizable decline in dollar volume which was off 73 percent from one year ago and 63 percent over the average of the last five years. While one could anticipate that 2022 figures might pale in comparison to the exceptional sales year of 2021, August was the first month in 2022 to fall so notably behind the five-year transaction average. Cumulative sales through August 31, 2022, registered 159 transactions and $670 million, respective declines of 41 percent and 24 percent from this time last year.

•

In addition to lower transaction volume, the sales that took place in August 2022 were of a lower average selling value than one year ago as the highest single-family home sale was the $5.45 million sale of 76 Millbrook Road (purchased by the Nantucket Islands Land Bank).

Nonetheless, all the higher end activity that took place thus far in 2022 resulted in the median home sale value rising to $3.195 million as of August 31, 2022. This is 25 percent higher than one year ago and 38 percent higher than the five-year average.

•

Interestingly, August 2022 was the first month of the year where single-family home inventory was effectively steady to 2021 levels rather than five to 12 percent lower as it had been in previous months. The pendulum could finally be swinging the other direction after three years of rapidly declining inventory levels. Even though inventory levels stabilized, it remained historically low and thus it only took an average of two months for properties to sell. This is the same pace as during the same time last year. Cumulatively, through the eight months of the year ending August 31, 2022, the average marketing time was 2.9 months, 1.4 months faster than in 2021. Sales discounts continued to narrow with the average sale price from the last and original asking prices narrowing to 97 percent.

Number of Records

2022

Total Transactions

AUG 22

BY JEN ALLEN

•

Given the rise in Nantucket property values, it’s not particularly surprising to see that there were no home sales under $1 million in August. There was just one during August 2021 and only two during the five-year average. Whether it was due to low transaction volume or a misalignment in pricing versus buyer-perceived value, there were also far fewer transactions in each milliondollar segment between $1 million and $4 million in August even though inventory levels were largely the same as one year ago.

•

As previously mentioned, there was a noticeable difference in high-end activity for August 2022 as there were no sales above $6 million wherein there were seven transactions in 2021 and eight transactions in this price range over the five-year average. While we are aware of at least one mega-high-end ($20M+) transaction under contract, the remaining four months of the year may not pack the same punch as the Nantucket market is used to seeing in terms of higher end closings. Aside from 2021, these sales have historically been most prominent in Q4.

•

In addition to the 10 arm’s length, single-family home transactions that took place in August, there were also two foreclosures on the books that are not included in our total figures, but which amounted to $9 million.

INVENTORY

CONTRACT ACTIVITY

INVENTORY LEVELS INCREASED IN CERTAIN PRICE POINTS

NEW PURCHASE ACTIVITY FAR LIGHTER THAN 2021

•

Though Nantucket property inventory was 66 percent lower than the most recent peak in 2019, August 2022 represented the first monthly period since that time where same period inventory levels held steady. As of August 31, 2022, there were 160 properties listed for sale including residential (142), commercial (6) and vacant land (12) listings. This is nearly an identical mix in the number of listings by property type as in August 2021. The total months’ supply, or how long it would take to sell all listings based on trailing 12-month sales, was still historically low at 3.5 months but was one month longer than at this time in 2021 based on the slower transaction pace.

•

While most price points continued to see a year-over-year decline in inventory levels, for the first time in recent memory, there were certain price points which saw a year-over-year increase. Most notably, inventory in the $7 million to $8 million price point rose from two properties listed for sale last year to 10 properties in August 2022. Listings above $10 million increased from 15 properties one year ago to 22 this year, while properties listed between $6 million and $7 million also saw a bump of three additional listings. These are by no means giant increases but could signal the beginning of a shift in overall inventory levels, particularly if transaction volume continues to remain relatively light.

•

Commercial property listings remained limited with just six listings as of August 31, 2022, while vacant land listings continued to be in short supply with just 12 listings. The five-year average for vacant land listings was 44.

June

July

August

•

Though new monthly contracts were just a fraction of those recorded in August 2020 and 2021, they saw a handsome increase from those recorded in June and July. Recorded contracts (Offers to Purchase and Purchase & Sale Contracts excluding duplicates) measured a total of 43 contracts in August 2022, down from 137 contracts in 2020 and down from 83 in August 2021, but higher than the 29 contracts noted in June and July of 2022.

•

Most of the August contracts, 51 percent, were for properties last priced between $1 million and $3 million, in line with what we saw in 2021 and even for the fiveyear average. In contrast to sales activity, August new purchase activity saw a little bump in the higher end of the market with five new contracts recorded above $9 million. Though this is significantly less than what has occurred in the last two years, it suggests there should be a little steam left in this segment of the market as we head into the fall.

•

As of the time of this report, September transactions measured just above $50 million. Based on this preliminary figure, September 2022 is also likely to significantly trail previous years’ figures but preliminarily show improvement from August activity. The 2022 market is certain to hit $1 billion so it is still a very vibrant year for the island’s real estate market.

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

2

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

SINGLE-FAMILY HOME SALES SUMMARY MONTHLY HOME SALES DROPPED SIGNIFICANTLY 2022

Total Transactions

% Change

5-Year Avg (2018-22)

159

268

-41% f

188

$669,849,740

$879,732,398

-24% f

$588,343,007

$4,212,891

$3,282,584

28% d

$3,127,139

$3,195,000

$2,562,500

25% d

$2,310,750

2.9

4.4

-35% f

5.7

Avg. Price as % of Last Ask

97%

96%

2d

94%

Avg. Price as % of Original Ask

96%

93%

4d

91%

189%

153%

37d

146%

Total Sales Dollar Volume Avg. Selling Price Median Selling Price Avg. Months on Market

AUG 22

2021

Avg. Price as % of Assessed Value •

August single-family home sales (excluding condos, co-ops & covenant properties) fell to just 10 transactions in 2022 compared to 25 in 2021 and 26 transactions over the five-year average. This naturally led to a sizable decline in dollar volume which was off 73 percent from one year ago and 63 percent over the average of the last five years. While one could anticipate that 2022 figures might pale in comparison to the exceptional sales year of 2021, August was the first month in 2022 to fall so notably behind the fiveyear transaction average. Cumulative sales through August 31, 2022, registered 159 transactions and $670 million, respective declines of 41 percent and 24 percent from this time last year.

•

In addition to lower transaction volume, the sales that took place in August 2022 were of a lower average selling value than one year ago as the highest single-family home sale was the $5.45 million sale of 76 Millbrook Road (purchased by the Nantucket Islands Land Bank). Nonetheless, all the higher end activity that took place thus far in 2022 resulted in the median home sale value rising to $3.195 million as of August 31, 2022. This is 25 percent higher than one year ago and 38 percent higher than the five-year average.

•

Interestingly, August 2022 was the first month of the year where single-family home inventory was effectively steady to 2021 levels rather than five to 12 percent lower as it had been in previous months.

The pendulum could finally be swinging the other direction after three years of rapidly declining inventory levels. Even though inventory levels stabilized, it remained historically low and thus it only took an average of two months for properties to sell. This is the same pace as during the same time last year. Cumulatively, through the eight months of the year ending August 31, 2022, the average marketing time was 2.9 months, 1.4 months faster than in 2021. Sales discounts continued to narrow with the average sale price from the last and original asking prices narrowing to 97 percent.

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

3

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

SINGLE-FAMILY HOME SALES BY PRICE POINT

AUG 22

Number of Records

HIGH-END ACTIVITY WAS LIGHT IN AUGUST

•

Given the rise in Nantucket property values, it’s not particularly surprising to see that there were no home sales under $1 million in August. There was just one during August 2021 and only two during the five-year average. Whether it was due to low transaction volume or a misalignment in pricing versus buyer-perceived value, there were also far fewer transactions in each million-dollar segment between $1 million and $4 million in August even though inventory levels were largely the same as one year ago.

•

As previously mentioned, there was a noticeable difference in high-end activity for August 2022 as there were no sales above $6 million wherein there were seven transactions in 2021 and eight transactions in this price range over the five-year average. While we are aware of at least one mega-high-end ($20M+) transaction under contract, the remaining four months of the year may not pack the same punch as the Nantucket market is used to seeing in terms of higher end closings. Aside from 2021, these sales have historically been most prominent in Q4.

•

In addition to the 10 arm’s length, single-family home transactions that took place in August, there were also two foreclosures on the books that are not included in our total figures, but which amounted to $9 million.

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

4

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

INVENTORY

AUG 22

INVENTORY LEVELS INCREASED IN CERTAIN PRICE POINTS

•

Though Nantucket property inventory was 66 percent lower than the most recent peak in 2019, August 2022 represented the first monthly period since that time where same period inventory levels held steady. As of August 31, 2022, there were 160 properties listed for sale including residential (142), commercial (6) and vacant land (12) listings. This is nearly an identical mix in the number of listings by property type as in August 2021. The total months’ supply, or how long it would take to sell all listings based on trailing 12-month sales, was still historically low at 3.5 months but was one month longer than at this time in 2021 based on the slower transaction pace.

•

While most price points continued to see a year-over-year decline in inventory levels, for the first time in recent memory, there were certain price points which saw a year-over-year increase. Most notably, inventory in the $7 million to $8 million price point rose from two properties listed for sale last year to 10 properties in August 2022. Listings above $10 million increased from 15 properties one year ago to 22 this year, while properties listed between $6 million and $7 million also saw a bump of three additional listings. These are by no means giant increases but could signal the beginning of a shift in overall inventory levels, particularly if transaction volume continues to remain relatively light.

•

Commercial property listings remained limited with just six listings as of August 31, 2022, while vacant land listings continued to be in short supply with just 12 listings. The five-year average for vacant land listings was 44.

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

5

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

CONTRACT ACTIVITY

AUG 22

NEW PURCHASE ACTIVITY FAR LIGHTER THAN 2021

June

July

August

•

Though new monthly contracts were just a fraction of those recorded in August 2020 and 2021, they saw a handsome increase from those recorded in June and July. Recorded contracts (Offers to Purchase and Purchase & Sale Contracts excluding duplicates) measured a total of 43 contracts in August 2022, down from 137 contracts in 2020 and down from 83 in August 2021, but higher than the 29 contracts noted in June and July of 2022.

•

Most of the August contracts, 51 percent, were for properties last priced between $1 million and $3 million, in line with what we saw in 2021 and even for the five-year average. In contrast to sales activity, August new purchase activity saw a little bump in the higher end of the market with five new contracts recorded above $9 million. Though this is significantly less than what has occurred in the last two years, it suggests there should be a little steam left in this segment of the market as we head into the fall.

•

As of the time of this report, September transactions measured just above $50 million. Based on this preliminary figure, September 2022 is also likely to significantly trail previous years’ figures but preliminarily show improvement from August activity. The 2022 market is certain to hit $1 billion so it is still a very vibrant year for the island’s real estate market.

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

6