November 2020 Nantucket Real Estate Market Insights

NOV 20

NANTUCKET REAL ESTATE Market Insights BY JEN ALLEN

MONTHLY SALES HIGHLIGHTS

QUICKEST SALE

HIGHEST SALE

$10,750,000

$2,100,000

30 ORANGE STREET MARKETED FOR [3,400 Days]

FISHER’S REVIEW

Though November real estate sales cooled from the monstrous volume posted

HIGHEST COMMERCIAL SALE

$2,400,000

14 POPLAR STREET MARKETED FOR [2 Days]

1 CAMBRIDGE STREET #2 MARKETED FOR [237 Days]

KEY MARKET STATISTICS ALL PROPERTY TYPES

FY 2020

Transactions Dollar Volume ($in 000s) Sale Price to Last Ask Price

transactions still rallied high enough to set

Active Listings (Nov)

another new record. November transactions

Months Supply of Inventory

included 82 property transfers totaling

New Contracts (Nov)

% CHANGE YOY

5-YEAR AVG.

527

376

40% d

432

$1,555,928

$892,824

74% d

$1,057,641

6.6

5.9

12% d

6.6

94%

93%

1% d

94%

272

407

-33% f

359

5.7

11.9

-52% f

11.0

71

46

54% d

472

Avg. Months on Market

in September and October, monthly

FY 2019

$216 million, a volume not ever witnessed before in November. These sales boosted cumulative figures through November 30, 2020 to 527 transactions totaling $1.55

NANTUCKET REAL ESTATE ACTIVITY THROUGH NOV 2011–20

billion, a respective 40 percent and 72 percent increase from one year ago. Singlefamily home transactions were numerous and included a higher percentage of lower

up during the month, while overall inventory © 2 0 2 0 F I S H E R R E A L E S TAT E

and projected marketing times declined.

New contract activity was lighter than in

Dollar Volume

months. Commercial activity also perked

# of Transactions

price point sales than during previous

previous months but was still well ahead of what the market would normally see this time of year, and preliminary December volume suggests the 2020 market will surpass $1.7 billion. Here are Fisher’s November Market Insights…

Dollar Volume per Quarter

Q1

Q2

Q3

Q4YTD

# of Transactions

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

1

N DE OV C 16 20

NANTUCKET REAL ESTATE

Market Insights

BY JEN ALLEN SHALLEY

RESIDENTIAL SALES ACTIVITY SINGLE FAMILY HOME SALES

COMMERCIAL SALES SUMMARY

STRONG VOLUME WITH INCREASE IN LOWER END SALES

SLIGHT BUMP IN ACTIVITY IN A LOW-VOLUME YEAR

2020

Total Transactions Total Sales Dollar Volume

2019

5-Year Avg (2016-20)

% Change

405

268

51% d

314

$1,366,901,674

$702,218,378

95% d

$891,883,992

2020

Transactions Total Sales Dollar Volume

Avg. Selling Price

$3,375,066

$2,620,218

29% d

$2,798,297

Avg. Selling Price

Median Selling Price

$2,575,000

$1,885,500

37% d

$1,991,600

Median Selling Price

7.0

5.9

19% d

6.7

94%

93%

1

93%

Avg. Price as % of Last Ask

89%

89%

0

90%

Avg. Price as % of Original Ask

130%

129%

1

128%

Avg. Price as % of Assessed Value

Avg. Months on Market Avg. Price as % of Last Ask Avg. Price as % of Original Ask Avg. Price as % of Assessed Value

•

Single-family home sales (excluding condos, co-ops & covenant properties) during the month of November measured 60 transactions totaling $185 million. Similar to October’s results, this is essentially double the transaction and dollar volume witnessed in November 2019 and significantly higher than the five-year November average. The transactions brought the year-todate tally to 405 single-family home sales totaling $1.37 billion through November 30, 2020, the highest transaction and dollar volume ever recorded for any similar period.

•

While we have continually reported on the high-end of the market this year due to its outsized performance compared to previous years, what was notable in November data was that home sales between $1 million and $2 million represented the highest percentage (32%) of monthly sales for any period so far this year. This caused the average monthly home sale value to decline from $3.65 million in October to $3.1 million in November and is the reason why there were effectively the same number of transactions during both months but $126 million less in dollar volume in November.

•

% Change

5 Year Avg (2016–20)

10

17

–41% f

12

$20,491,632

$75,435,000

–73% f

$31,222,326

$2,049,163

$4,437,353

–54% f

$2,366,572

$2,330,000

$3,191,996

–27% f

$2,010,399

6.1

7.9

-23% f

6.3

91%

92%

-1 f

93%

Avg. Months on Market

Sales metrics held largely steady with the average sale price occurring at 94 percent of the last asking price. Hidden within this average is the discount gap between new inventory that goes under contract within the first 30 days, and sales for homes that have been marketed for much longer. For example, there were 10 sales that occurred at full asking price (all of which went under contract quickly), and 8 transactions which sold for more than a 25 percent discount (most of which were marketed for more than one year). Home inventory continued to decline with just 193 single-family homes for sale across all prices points as of November 30, 2020.

2019

90%

89%

1d

93%

145%

132%

13 d

147%

•

It goes without saying that this has been a trying year for many commercial businesses and, as a result, there have been fewer commercial transactions in 2020 as compared to prior years.

Nonetheless, November real estate sales included two commercial transactions suggesting this segment of the market may begin to see renewed activity.

•

The property formerly operated as Sweet Inspirations at 1 Cambridge Street in Town sold for $2.4 million in November. It was initially listed for sale in October 2019 and went under contract relatively quickly in January 2020. That deal fell apart in April 2020. The property was relisted in May and a new contract was inked in October.

•

The other commercial transaction to take place was the private sale of the Inquirer & Mirror’s property (and assets) at 1 Old South Road. A private, locally owned LLC purchased the property for $1.33 million.

•

As of November 30, 2020, there were 19 commercial properties listed for sale as compared to the 16 listed one year ago. The properties ranged from a second floor, Main Street condo listed for $795,000, to a consortium of commercial properties on North Beach Street listed for $5 million.

FORWARD MARKET INDICATORS HISTORICAL COMPARISON OF CONTRACT ACTIVITY

PROJECTED MONTHS ON MARKET FOR SINGLE-FAMILY HOMES

NEW PURCHASE AGREEMENTS REMAIN HISTORICALLY HIGH

Trailing 12-Mo Sales

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

•

•

•

# of Contracts

Months

# of Properties

PROJECTED MARKETING TIMES SEE DRAMATIC REDUCTION

SFH Inventory

Projected MOM

As of November 30, 2020, there were 272 actively listed properties on the island, compared to 405 this same time one year ago. This included 212 residential properties (including condos, multi-family properties and co-ops), 41 parcels of land and 19 commercial properties. This represented the lowest inventory on record, even as compared to 2006.

Given the reduction in inventory, particularly by price point, it’s an interesting time to evaluate how the projected months on market timeline has shifted by comparing trailing 12-month sales to the current inventory for each million-dollar price point. If one assumes sales activity will continue at the trailing 12-month pace, the absorption projection ranged from 15 days to 88 months faster ($10M+) than what was projected in November 2019 based on trailing sales and inventory at that time. It’s a remarkable shift, particularly for the upper end of the market, driven by the robust buyer demand witnessed this year. The only price point to see a projected increase in the projected sale time is the $8 million to $9 million price point, though just one transaction more would shift this calculation significantly.

While these projections provide an indication of current market dynamics in specific price points, they are based on historic data and could change pending future sales trends.

September

October

November

•

Despite declining significantly from prior months, new purchase activity in November continued to set monthly records. Offers to Purchase and Purchase & Sale Contracts (excluding duplicates) measured 71, down from 112 contracts during October, but significantly above the 46 contracts recorded in November 2019.

•

Most of the contracts, 27 percent, were for properties last priced between $2 million and $3 million, double the percentage from one year ago when the majority of contracts were for properties last priced between $1 million and $2 million. The $3 million to $4 million segment also saw healthy volume and represented 23 percent of new contracts.

Ultra-high-end properties also continued to see activity, with three new contracts posted in December, up from two in 2019 and one in 2018.

•

As of the production of this report, December 2020 sales measured $156 million, placing the market north of $1.7 billion for its annual total. There were also $285 million in booked contracts (based on last list prices not selling prices), indicating the Nantucket real estate market will not only see the strongest year in history, but appears to still have quite a bit of steam remaining.

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

2

N OV 20

NANTUCKET REAL ESTATE

Market Insights

BY JEN ALLEN

SINGLE FAMILY HOME SALES STRONG VOLUME WITH INCREASE IN LOWER END SALES 2020

Total Transactions

2019

% Change

5-Year Avg (2016-20)

405

268

51% d

314

$1,366,901,674

$702,218,378

95% d

$891,883,992

Avg. Selling Price

$3,375,066

$2,620,218

29% d

$2,798,297

Median Selling Price

$2,575,000

$1,885,500

37% d

$1,991,600

7.0

5.9

19% d

6.7

Avg. Price as % of Last Ask

94%

93%

1

93%

Avg. Price as % of Original Ask

89%

89%

0

90%

130%

129%

1

128%

Total Sales Dollar Volume

Avg. Months on Market

Avg. Price as % of Assessed Value

•

Single-family home sales (excluding condos, co-ops & covenant properties) during the month of November measured 60 transactions totaling $185 million. Similar to October’s results, this is essentially double the transaction and dollar volume witnessed in November 2019 and significantly higher than the five-year November average. The transactions brought the year-todate tally to 405 single-family home sales totaling $1.37 billion through November 30, 2020, the highest transaction and dollar volume ever recorded for any similar period.

•

While we have continually reported on the high-end of the market this year due to its outsized performance compared to previous years, what was notable in November data was that home sales between $1 million and $2 million represented the highest percentage (32%) of monthly sales for any period so far this year. This caused the average monthly home sale value to decline from $3.65 million in October to $3.1 million in November and is the reason why there were effectively the same number of transactions during both months but $126 million less in dollar volume in November.

•

Sales metrics held largely steady with the average sale price occurring at 94 percent of the last asking price. Hidden within this average is the discount gap between new inventory that goes under contract within the first 30 days, and sales for homes that have been marketed for much longer. For example, there were 10 sales that occurred at full asking price (all of which went under contract quickly), and 8 transactions which sold for more than a 25 percent discount (most of which were marketed for more than one year). Home inventory continued to decline with just 193 single-family homes for sale across all prices points as of November 30, 2020.

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

3

N OV 20

NANTUCKET REAL ESTATE

Market Insights

BY JEN ALLEN

COMMERCIAL SALES SUMMARY SLIGHT BUMP IN ACTIVITY IN A LOW VOLUME YEAR

2020

Transactions

2019

% Change

5 Year Avg (2016–20)

10

17

–41% f

12

$20,491,632

$75,435,000

–73% f

$31,222,326

$2,049,163

$4,437,353

–54% f

$2,366,572

$2,330,000

$3,191,996

–27% f

$2,010,399

6.1

7.9

-23% f

6.3

Avg. Price as % of Last Ask

91%

92%

-1% f

93%

Avg. Price as % of Original Ask

90%

89%

1% d

93%

145%

132%

13% d

147%

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

Avg. Price as % of Assessed Value

•

It goes without saying that this has been a trying year for many commercial businesses and, as a result, there have been fewer commercial transactions in 2020 as compared to prior years. Nonetheless, November real estate sales included two commercial transactions suggesting this segment of the market may begin to see renewed activity.

•

The property formerly operated as Sweet Inspirations at 1 Cambridge Street in Town sold for $2.4 million in November. It was initially listed for sale in October 2019 and went under contract relatively quickly in January 2020. That deal fell apart in April 2020. The property was relisted in May and a new contract was inked in October.

•

The other commercial transaction to take place was the private sale of the Inquirer & Mirror’s property (and assets) at 1 Old South Road. A private, locally owned LLC purchased the property for $1.33 million.

•

As of November 30, 2020, there were 19 commercial properties listed for sale as compared to the 16 listed one year ago. The properties ranged from a second floor, Main Street condo listed for $795,000, to a consortium of commercial properties on North Beach Street listed for $5 million.

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

4

Market Insights

BY JEN ALLEN

PROJECTED MONTHS ON MARKET FOR SINGLE-FAMILY HOMES PROJECTED MARKETING TIME SEE DRAMATIC REDUCTION

Months

# of Properties

N OV 20

NANTUCKET REAL ESTATE

Trailing 12-Mo Sales

SFH Inventory

Projected MOM

•

As of November 30, 2020, there were 272 actively listed properties on the island, compared to 405 this same time one year ago. This included 212 residential properties (including condos, multi-family properties and co-ops), 41 parcels of land and 19 commercial properties. This represented the lowest inventory on record, even as compared to 2006.

•

Given the reduction in inventory, particularly by price point, it’s an interesting time to evaluate how the projected months on market timeline has shifted by comparing trailing 12-month sales to the current inventory for each million-dollar price point. If one assumes sales activity will continue at the trailing 12-month pace, the absorption projection ranged from 15 days to 88 months faster ($10M+) than what was projected in November 2019 based on trailing sales and inventory at that time. It’s a remarkable shift, particularly for the upper end of the market, driven by the robust buyer demand witnessed this year. The only price point to see a projected increase in the projected sale time is the $8 million to $9 million price point, though just one transaction more would shift this calculation significantly.

•

While these projections provide an indication of current market dynamics in specific price points, they are based on historic data and could change pending future sales trends.

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

5

Market Insights

BY JEN ALLEN

HISTORICAL COMPARISON OF CONTRACT ACTIVITY NEW PURCHASE AGREEMENTS REMAIN HISTORICALLY HIGH

# of Contracts

N OV 20

NANTUCKET REAL ESTATE

September

October

November

•

Despite declining significantly from prior months, new purchase activity in November continued to set monthly records. Offers to Purchase and Purchase & Sale Contracts (excluding duplicates) measured 71, down from 112 contracts during October, but significantly above the 46 contracts recorded in November 2019.

•

Most of the contracts, 27 percent, were for properties last priced between $2 million and $3 million, double the percentage from one year ago when the majority of contracts were for properties last priced between $1 million and $2 million. The $3 million to $4 million segment also saw healthy volume and represented 23 percent of new contracts. Ultra-high-end properties also continued to see activity, with three new contracts posted in December, up from two in 2019 and one in 2018.

•

As of the production of this report, December 2020 sales measured $156 million, placing the market north of $1.7 billion for its annual total. There were also $285 million in booked contracts (based on last list prices not selling prices), indicating the Nantucket real estate market will not only see the strongest year in history, but appears to still have quite a bit of steam remaining.

•

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

6