February Market Insights - Nantucket Real Estate

NANTUCKET REAL ESTATE Market Insights BY JEN ALLEN MONTHLY SALES HIGHLIGHTS

COMMERCIAL SALE

HIGHEST SALE

$11,000,000

$2,000,000

$345,000

48 BARTLETT ROAD MARKETED FOR [29 Days]

FISHER’S

28 HONEYSUCKLE DRIVE PRIVATE SALE

KEY MARKET STATISTICS

REVIEW

ALL PROPERTY TYPES

Transactions Dollar Volume ($in 000s) Avg. Months on Market Sale Price to Last Ask Price Active Listings (Feb) Months Supply of Inventory New Contracts (Feb)

FY 2022

FY 2021

% CHANGE YOY

5-YEAR AVG.

-45% f

66

$210,007

-23% f

$159,494

5.6

-55% f

6.5

95%

94%

1d

94%

61

145

-58% f

200

1.1

2.6

-59% f

6.2

20

46

-57% f

27

51

93

$162,166 2.5

NANTUCKET REAL ESTATE ACTIVITY THROUGH FEBRUARY 2011–22

# of Transactions

Dollar Volume

FEB 22

18 RABBIT RUN ROAD PRIVATE SALE

Although January sales showcased a very solid start to 2022, February transactions pointed to the pervasive imbalance between supply and demand that has depleted Nantucket real estate inventory. For the month ending, February 28, 2022, just 16 transactions totaling $58 million in dollar volume traded hands. This is a respective decline of 60 percent and 44 percent from February 2021 and a dramatic reduction from the 35 transactions totaling $100 million just one month ago. While these figures are low relative to the last 18 months of activity, they are more consistent with what the Nantucket real estate market saw prior to its meteoric rise in 2020 and suggest that volume could slow down significantly unless there is a shift in the supply dynamics. Here are Fisher’s February Market Insights…

LOWEST LAND SALE

© 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

BY JEN ALLEN

RESIDENTIAL SALES SUMMARY

SINGLE FAMILY HOME SALES SALES VOLUME IMPACTED BY LIMITED SUPPLY 2022

Total Transactions 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

FEB 22

Avg. Price as % of Assessed Value

2021

% Change

5-Year Avg (2018-22)

33

60

-45% f

43

$127,812,667

$156,218,125

-18% f

$121,917,342

$3,873,111

$2,603,635

49% d

$2,900,030

$3,400,000

$2,100,000

62% d

$2,258,500

2.3

4.9

-53% f

6.9

96%

94%

2d

94%

96%

90%

6d

90%

168%

125%

42d

139%

•

Single-family home sales (excluding condos, co-ops & covenant properties) measured 21 transactions totaling $74.9 million in February, a decline of 42 percent and 11 percent respectively from February 2021. Despite the marked reduction in transaction volume, dollar volume was not as severely impacted due to several higher end sales, including the highest sale of the month which was the $11 million transfer of 18 Rabbit Run Road. This waterfront property in Shimmo initially sold as a new construction property in 2012 for $6.7 million. It resold in 2016 for $8.5 million and again in February 2022 for $11 million. This represented a five percent annualized return throughout the various transactions as no material changes were made to the property. The $7.55 million sale of 6 Kite Hill Lane tells a similar story with an annualized return of six percent since it’s last sale in 2012.

•

Given the outsized imbalance in supply and demand, single-family home sales metrics continued to strengthen. The average marketing time declined another 2.6 months from 2021 and was nearly five months lower than the five-year average, illustrating the continued, rapid pace of the current market. Pricing discounts narrowed while the median home sale price rose 62 percent (keep in mind this metric doesn’t hold much weight with such a limited sample size this early in the year). The average sale price as a percentage of the Town’s assessed value rose to 168 percent.

MARKET INDICATORS

NANTUCKET PROPERTY INVENTORY LEVELS

HISTORICAL COMPARISON OF CONTRACT ACTIVITY

FEWER THAN 10 LISTINGS PER PRICE POINT

NEW PURCHASE ACTIVITY MODERATED

January

•

•

•

In reviewing the last five years, February inventory peaked in 2019 when there were 291 properties listed for sale. In 2020, this figure remained largely the same at 269 properties before dipping significantly in 2021 to 145 properties.

As of February 28, 2022, the total number of properties listed for sale on the island measured 62 properties. This included 50 single-family homes, seven parcels of land, three commercial properties and two condominium units.

•

Of course, with these figures, not a single price point segment saw yearover-year growth. In fact, there were fewer than 10 properties listed for sale in each single million-dollar segment. Properties listed between $3 million and $4 million were the most numerous at nine listings, while there was just one lone property listed for less than $1 million. This is typically one of the leanest months of the year for inventory and, at the time of this report, we’ve already seen an increase in property inventory in March. Nonetheless, with the continued pent-up demand, the island will need to see far more properties come online before we see a material change in current appreciation rates or the multiple-bid scenarios for new listings. There’s likely never been a more efficient market in the history of the island.

February

While January and February 2021 saw the highest number of contracts (Offers to Purchase and Purchase & Sale Contracts excluding duplicates) ever booked during the same period, early results for 2022 pointed to reduced but more historically consistent figures. For the monthly period ending February 28, 2022, 20 new contracts were signed, down from the 33 reported in January and lower than the 46 booked in February 2021. This illustrates the continued demand in the market but also that constricted inventory levels will continue putting downward pressure on sales activity.

Most of the contracts booked, 50 percent, were for properties last priced between $1 million and $2 million, notably higher than the 28 percent for this segment in 2021 and an average of 36 percent for this segment over the last five years. Properties last priced between $3 million and $4 million increased from 22 percent in February 2021 to 30 percent of total contract activity in February 2022, while properties listed for more than $5 million registered just two new contracts during February.

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

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NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

SINGLE FAMILY HOME SALES SALES VOLUME IMPACTED BY LIMITED SUPPLY

2022

Total Transactions

% Change

5-Year Avg (2018-22)

33

60

-45% f

43

$127,812,667

$156,218,125

-18% f

$121,917,342

$3,873,111

$2,603,635

49% d

$2,900,030

$3,400,000

$2,100,000

62% d

$2,258,500

2.3

4.9

-53% f

6.9

Avg. Price as % of Last Ask

96%

94%

2d

94%

Avg. Price as % of Original Ask

96%

90%

6d

90%

168%

125%

42d

139%

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

FEB 22

2021

Avg. Price as % of Assessed Value

•

Single-family home sales (excluding condos, co-ops & covenant properties) measured 21 transactions totaling $74.9 million in February, a decline of 42 percent and 11 percent respectively from February 2021. Despite the marked reduction in transaction volume, dollar volume was not as severely impacted due to several higher end sales, including the highest sale of the month which was the $11 million transfer of 18 Rabbit Run Road. This waterfront property in Shimmo initially sold as a new construction property in 2012 for $6.7 million. It resold in 2016 for $8.5 million and again in February 2022 for $11 million. This represented a five percent annualized return throughout the various transactions as no material changes were made to the property. The $7.55 million sale of 6 Kite Hill Lane tells a similar story with an annualized return of six percent since it’s last sale in 2012.

•

Given the outsized imbalance in supply and demand, single-family home sales metrics continued to strengthen.

The average marketing time declined another 2.6 months from 2021 and was nearly five months lower than the five-year average, illustrating the continued, rapid pace of the current market. Pricing discounts narrowed while the median home sale price rose 62 percent (keep in mind this metric doesn’t hold much weight with such a limited sample size this early in the year). The average sale price as a percentage of the Town’s assessed value rose to 168 percent.

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

3

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

HISTORICAL COMPARISON OF CONTRACT ACTIVITY

FEB 22

NEW PURCHASE ACTIVITY MODERATED

January

February

•

While January and February 2021 saw the highest number of contracts (Offers to Purchase and Purchase & Sale Contracts excluding duplicates) ever booked during the same period, early results for 2022 pointed to reduced but more historically consistent figures. For the monthly period ending February 28, 2022, 20 new contracts were signed, down from the 33 reported in January and lower than the 46 booked in February 2021. This illustrates the continued demand in the market but also that constricted inventory levels will continue putting downward pressure on sales activity.

•

Most of the contracts booked, 50 percent, were for properties last priced between $1 million and $2 million, notably higher than the 28 percent for this segment in 2021 and an average of 36 percent for this segment over the last five years. Properties last priced between $3 million and $4 million increased from 22 percent in February 2021 to 30 percent of total contract activity in February 2022, while properties listed for more than $5 million registered just two new contracts during February.

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

4

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

NANTUCKET PROPERTY INVENTORY LEVELS

FEB 22

FEWER THAN 10 LISTINGS PER PRICE POINT

•

In reviewing the last five years, February inventory peaked in 2019 when there were 291 properties listed for sale. In 2020, this figure remained largely the same at 269 properties before dipping significantly in 2021 to 145 properties. As of February 28, 2022, the total number of properties listed for sale on the island measured 62 properties. This included 50 single-family homes, seven parcels of land, three commercial properties and two condominium units.

•

Of course, with these figures, not a single price point segment saw year-over-year growth. In fact, there were fewer than 10 properties listed for sale in each single million-dollar segment. Properties listed between $3 million and $4 million were the most numerous at nine listings, while there was just one lone property listed for less than $1 million. This is typically one of the leanest months of the year for inventory and, at the time of this report, we’ve already seen an increase in property inventory in March. Nonetheless, with the continued pent-up demand, the island will need to see far more properties come online before we see a material change in current appreciation rates or the multiple-bid scenarios for new listings. There’s likely never been a more efficient market in the history of the island.

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

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