September 2020 Nantucket Real Estate Market Insights

SEPT 20

NANTUCKET REAL ESTATE Market Insights BY JEN ALLEN

MONTHLY SALES HIGHLIGHTS

HIGHEST SALE

$21,000,000

5 SHERBURNE WAY MARKETED FOR [272 Days]

As with many rural markets, Nantucket real estate is shattering historic sales records and is poised to set its highest annual sales volume in history. Monthly real estate sales in September were the highest ever recorded for any month, surpassing the previous monthly sales record (October 2018) by a whopping 63 percent. The $355 million in monthly sales through 113 transactions is more typical of what the island sees on a very healthy quarterly basis, but never before in just a single month. Third quarter sales volume totaled $655 million, bringing the market just shy of the $1 billion mark, after removing non-market rate transactions and foreclosures. The robust dollar volume can be attributed to a significant growth in high-end sales activity and an overall rise in buyer demand. Marketing times were at record lows, median home values set record highs, and property inventory continued to be limited. Here are Fisher’s September Market Insights…

$1,350,000

$2,800,000

11 ATLANTIC AVENUE MARKETED FOR [4 Days]

77 SQUAM ROAD MARKETED FOR [1,026 Days]

KEY MARKET STATISTICS ALL PROPERTY TYPES

FY 2020

Transactions

FY 2019

% CHANGE YOY

5-YEAR AVG.

337

281

20% d

314

$978,734

$651,757

50% d

$737,686

6.5

6

8% d

6.7

94%

93%

1d

94%

325

477

-32% f

417

Months Supply of Inventory

8.1

13.6

-40% f

9.0

New Contracts (Sept)

121

49

147% d

66

Dollar Volume ($in 000s) Avg. Months on Market Sale Price to Last Ask Price Active Listings (Sept)

NANTUCKET REAL ESTATE ACTIVITY THROUGH SEPT 2011–20

# of Transactions

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

REVIEW

LONGEST SALE

Dollar Volume

FISHER’S

QUICKEST SALE

Dollar Volume per Quarter

Q1

Q2

Q3YTD

# of Transactions

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

1

SDE E PCT 16 20

NANTUCKET REAL ESTATE

Market Insights

BY JEN ALLEN SHALLEY

RESIDENTIAL SALES SUMMARY SINGLE-FAMILY HOME SALES SUMMARY

SINGLE-FAMILY HOME SALES BY PRICE

METEORIC RISE IN SEPTEMBER SALES VOLUME

NOTABLE RISE IN $4M - $7M HOME SALES 2020

2020

Total Transactions Total Sales Dollar Volume Avg. Selling Price Median Selling Price

2019

% Change

5-Year Avg (2016-20)

Price Point

Total Transactions

2019

% of Total

Total Transactions

5-Year Average % of Total

Transactions

% of Total

260

193

35% d

226

<$1M

20

8%

28

15%

35

16%

$871,830,162

$492,532,466

77% d

$615,642,220

$1M–$2M

72

28%

77

40%

80

35%

$3,353,193

$2,551,982

31% d

$2,700,789

$2M–$3M

65

25%

35

18%

47

21%

$2,562,500

$1,850,000

39% d

$1,944,200

$3M–$4M

34

13%

23

12%

24

11%

23

9%

10

5%

13

6%

6

3%

9

4%

6.9

6.3

10% d

6.9

$4M–$5M

Avg. Price as % of Last Ask

93%

94%

0

93%

$5M–$6M

17

7%

Avg. Price as % of Original Ask

89%

90%

–1 f

90%

$6M–$7M

14

5%

3

2%

6

3%

134%

129%

5d

129%

$7M–$8M

5

2%

4

2%

4

2%

$8M–$9M

­­1

0%

2

1%

2

1%

$9M–$10M

3

1%

3

2%

2

1%

Avg. Months on Market

Avg. Price as % of Assessed Value

•

Single-family home sales (excluding condos, co-ops & covenant properties) measured 260 transactions totaling $872 million through September 30, 2020. This is 35 percent higher on a transaction basis and 77 percent higher on a dollar volume basis from the same period in 2019.

As compared to the five-year average, transaction figures rose 15 percent while dollar volume surged 42 percent higher. September single-family home sales alone measured 88 transactions through $330 million, a respective 214 percent and 350 percent increase from September 2019.

•

September transactions were led by the third highest sale so far this year, the $21 million sale of a 1.8-acre waterfront parcel on the Cliff. There have only been 14 mega-high-end ($20M+) residential sales in Nantucket’s history, four of which have occurred thus far in 2020. Two other ultra-high-end ($10M-$20M) sales in September, along with 14 high-end ($5M-$10M) transactions, lofted the market to its record height. With soaring demand and just 225 properties listed for sale, sub-$1 million sales have become increasingly limited. In fact, most of the sales in this price point were vacant land transfers.

$10M–$20M

3

1%

2

1%

4

2%

>$20M

3

1%

—

—

3

0%

•

One year ago, we reported that most all price points trailed the prior year’s activity due to the decline in overall transaction volume. Well, 2020 has certainly reversed that trend -- through September 30, 2020, every price point above $2 million saw healthy year-over-year growth. The price points which saw the most substantial increase, however, were between $4 million and $7 million. As compared to 2019, home sales between $4 million to $5 million doubled, sales between $5 million to $6 million effectively tripled, and sales between $6 million to $7 million were nearly five times higher than one year ago. Even as compared to the five-year average, where activity was higher in this price range than in 2019, these price points saw the most significant growth.

•

The number of ultra-high-end ($10M+) and mega-high-end ($20M+) sales also increased from 2019. Through September 30, 2020, there was one additional residential sale in the ultra-highend of the market and three additional sales above $20 million as compared to one year ago.

Historically, the high-end of the market sees most of its transaction activity in the fourth quarter so we expect 2020 will surpass all previous high-end, ultra-high-end and mega-high-end records.

FORWARD MARKET INDICATORS CONTRACT ACTIVITY BY QUARTER

AVERAGE MARKETING TIMES & MEDIAN PROPERTY VALUES

NEW PURCHASE ACTIVITY REMAINED ROBUST

Median Selling Price

Average Days on Market

RAPID SALES PACE AND RISING PROPERTY VALUES

# of Contracts

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

Average Days on Market

Q1

Median Selling Price

Q2

Q3

Q4

•

As we reported last month, the average marketing time ticked up slightly from one year ago but remains historically low. As of September 30, 2020, the average marketing time for single-family homes measured 197 days as compared to 141 days for the same time period in 2019. This is largely due to the fact that a few homes that have been marketed for several years are now selling (see page 1 longest sale highlight). Though the metric is ‘worsening’, the average marketing time should continue to decline as this older inventory continues to clear the market and other property sales continue to trade faster than recent averages.

•

After four consecutive month-to-month surges in new contract activity, total new purchase activity was more moderate in September than in previous months. Recorded contracts (Offers to Purchase and Purchase & Sale Contracts excluding duplicates) for the monthly period ending September 30, 2020, totaled 121 properties, down from the 137 reported in August but well above any previous period. Third quarter contract activity measured an astonishing 356 contracts, dwarfing any figure the market has seen in the last five years and likely in its history (contract data for the 2004-2008 period is limited).

•

Thanks to the increase in higher end property sales, Nantucket’s average and median property values have also increased quite handsomely. As of September 30, 2020, the median singlefamily home sale value was $2.6 million, up from $1.9 million one year ago. On the other hand, the average home sale value was $3.4 million, up from $2.6 million in 2019. The latter metric is more influenced by the ultra-high-end and mega-high-end sales than is the median home sale value. Regardless, both datapoints point to a notable increase in Nantucket property values.

•

Most of the contracts booked in the third quarter, 27 percent, were for properties last priced between $1 million and $2 million, slightly lower than the 31 percent for this segment in 2019 and dramatically lower than the 51 percent in 2018. New contracts for properties listed between $4 million to $7 million also increased, while the ultra-highend continued to show solid activity.

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

2

S E P T 20

NANTUCKET REAL ESTATE

Market Insights

BY JEN ALLEN

SINGLE-FAMILY HOME SALES SUMMARY METEORIC RISE IN SEPTEMBER SALES VOLUME

2020

Total Transactions

2019

% Change

5-Year Avg (2016–20)

260

193

35% d

226

$871,830,162

$492,532,466

77% d

$615,642,220

$3,353,193

$2,551,982

31% d

$2,700,789

$2,562,500

$1,850,000

39% d

$1,944,200

6.9

6.3

10% d

6.9

Avg. Price as % of Last Ask

93%

94%

0

93%

Avg. Price as % of Original Ask

89%

90%

–1 f

90%

134%

129%

5d

129%

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

Avg. Price as % of Assessed Value

•

Single-family home sales (excluding condos, co-ops & covenant properties) measured 260 transactions totaling $872 million through September 30, 2020. This is 35 percent higher on a transaction basis and 77 percent higher on a dollar volume basis from the same period in 2019. As compared to the five-year average, transaction figures rose 15 percent while dollar volume surged 42 percent higher. September single-family home sales alone measured 88 transactions through $330 million, a respective 214 percent and 350 percent increase from September 2019.

•

September transactions were led by the third highest sale so far this year, the $21 million sale of a 1.8-acre waterfront parcel on the Cliff. There have only been 14 mega-high-end ($20M+) residential sales in Nantucket’s history, four of which have occurred thus far in 2020. Two other ultra-high-end ($10M-$20M) sales in September, along with 14 high-end ($5M-$10M) transactions, lofted the market to its record height. With soaring demand and just 225 properties listed for sale, sub-$1 million sales have become increasingly limited. In fact, most of the sales in this price point were vacant land transfers.

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

3

S E P T 20

NANTUCKET REAL ESTATE

Market Insights

BY JEN ALLEN

SINGLE-FAMILY HOME SALES BY PRICE POINT NOTABLE RISE IN $4M - $7M HOME SALES 2020

2019

5-Year Average

Total Transactions

% of Total

Total Transactions

% of Total

Transactions

% of Total

<$1M

20

8%

28

15%

35

16%

$1M–$2M

72

28%

77

40%

80

35%

$2M–$3M

65

25%

35

18%

47

21%

$3M–$4M

34

13%

23

12%

24

11%

$4M–$5M

23

9%

10

5%

13

6%

$5M–$6M

17

7%

6

3%

9

4%

$6M–$7M

14

5%

3

2%

6

3%

$7M–$8M

5

2%

4

2%

4

2%

$8M–$9M

­­1

0%

2

1%

2

1%

$9M–$10M

3

1%

3

2%

2

1%

$10M–$20M

3

1%

2

1%

4

2%

>$20M

3

1%

—

—

3

0%

Price Point

•

One year ago, we reported that most all price points trailed the prior year’s activity due to the decline in overall transaction volume. Well, 2020 has certainly reversed that trend -- through September 30, 2020, every price point above $2 million saw healthy year-over-year growth. The price points which saw the most substantial increase, however, were between $4 million and $7 million. As compared to 2019, home sales between $4 million to $5 million doubled, sales between $5 million to $6 million effectively tripled, and sales between $6 million to $7 million were nearly five times higher than one year ago. Even as compared to the five-year average, where activity was higher in this price range than in 2019, these price points saw the most significant growth.

•

The number of ultra-high-end ($10M+) and mega-high-end ($20M+) sales also increased from 2019. Through September 30, 2020, there was one additional residential sale in the ultra-high-end of the market and three additional sales above $20 million as compared to one year ago. Historically, the high-end of the market sees most of its transaction activity in the fourth quarter so we expect 2020 will surpass all previous high-end, ultra-high-end and mega-high-end records.

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

4

Market Insights

BY JEN ALLEN

AVERAGE MARKETING TIMES & MEDIAN PROPERTY VALUES

Average Days on Market

RAPID SALES PACE AND RISING PROPERTY VALUES

Median Selling Price

S E P T 20

NANTUCKET REAL ESTATE

•

As we reported last month, the average marketing time ticked up slightly from one year ago but remains historically low. As of September 30, 2020, the average marketing time for single-family homes measured 197 days as compared to 141 days for the same time period in 2019. This is largely due to the fact that a few homes that have been marketed for several years are now selling (see page 1 longest sale highlight). Though the metric is ‘worsening’, the average marketing time should continue to decline as this older inventory continues to clear the market and other property sales continue to trade faster than recent averages.

•

Thanks to the increase in higher end property sales, Nantucket’s average and median property values have also increased quite handsomely. As of September 30, 2020, the median single-family home sale value was $2.6 million, up from $1.9 million one year ago. On the other hand, the average home sale value was $3.4 million, up from $2.6 million in 2019.

The latter metric is more influenced by the ultra-high-end and mega-high-end sales than is the median home sale value. Regardless, both datapoints point to a notable increase in Nantucket property values.

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

5

S E P T 20

NANTUCKET REAL ESTATE

Market Insights

BY JEN ALLEN

CONTRACT ACTIVITY BY QUARTER NEW PURCHASE ACTIVITY REMAINED ROBUST

Number of Contracts

Q1

Q2

Q3

Q4

•

After four consecutive month-to-month surges in new contract activity, total new purchase activity was more moderate in September than in previous months. Recorded contracts (Offers to Purchase and Purchase & Sale Contracts excluding duplicates) for the monthly period ending September 30, 2020, totaled 121 properties, down from the 137 reported in August but well above any previous period. Third quarter contract activity measured an astonishing 356 contracts, dwarfing any figure the market has seen in the last five years and likely in its history (contract data for the 2004-2008 period is limited).

•

Most of the contracts booked in the third quarter, 27 percent, were for properties last priced between $1 million and $2 million, slightly lower than the 31 percent for this segment in 2019 and dramatically lower than the 51 percent in 2018. New contracts for properties listed between $4 million to $7 million also increased, while the ultra-high-end continued to show solid activity.

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

6