First Quarter Update
“Spring is when you feel like whistling even with a shoe full of slush.”
-- Doug Larson (Columnist, 1926 -).
Spring may finally be starting to take hold on Nantucket, although Winter has not completely let go. With the first quarter of 2013 now in the books, what should we expect for the real estate market going forward? Is Spring taking hold in terms of real estate, even though we may still have a shoe full of slush? Let’s take a look.
In real estate analysis, we must look backward to look forward. Looking back over recent years (for comparison to the first quarter of 2013, and how they compare), we see that in the first quarter of 2011 there were a total of 69 total transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 70 during 2010 and 42 in 2009. The total dollar amount of real estate changing hands in the first quarter of 2011 was approximately $74 million, while in 2010 it was approximately $108 million and approximately $54 million in 2009. Just by these numbers alone, 2009 was the low point, with 2010 and 2011 showing improvement.
In the first three months of 2012, there were a total of 88 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc) with a total dollar volume of approximately $96 million, up about 28% in number of transactions, and up about 30% in total dollar volume from 2011’s numbers. By comparison, in the first three months of 2013, there were 70 total transactions, with a total dollar volume of about $83 million, a 20% decrease in transactions and a 14% decrease in dollar volume over 2012’s first quarter numbers. So, simply based on comparisons to recent years, we saw the bottom in 2009, a rebound of sorts in 2010 through 2012 and an overall slow continuation of this trend at the present time.
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. So far in 2013, we’ve seen an estimated 2-3 foreclosures, representing about 1% of the market.
The average home sale in 2010, hovered in the $2.2 million range, roughly even with the approximate $2.236 million average home sale for all of 2009, while the median home sale at the end of 2010 was $1.225 million, down about 20% from the $1.538 million median home sale for all of 2009. 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 is $749,000, up 6% from 2011’s numbers. At the end of the first quarter of 2013, the average home sale is $1.745 million, down about 6% from the average home sale in 2012. So far in 2013, there have been only two home sales over $5 million, with one of those over $10 million.
There were 35 vacant lot sales in all of 2009, with an average lot price down about 48% from 2008, which in turn was down about 36% from 2007. Vacant land sales increased modestly in 2010, 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 quarter of 2013, there were 17 vacant lot sales, with an average lot sale of $1.005 million, down about 27% from the average lot sale in 2012.
2008, on an annual basis, saw the fewest number of new single-family building permits being issued for any year since building permits were first required in 1972. 2009 is now the new record holder for the year with the fewest number of building permits being issued since 1972, 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. As of the end of the first three months of 2013, there have been 23 single-family permits issued, for a projected annual rate of 92 at the current pace. The general feeling in the market is that building has begun to slowly return and these permits numbers bear witness to that.
Overall sales volume (number of transactions) and dollar volume of those sales was down in the first quarter of 2013, compared to 2012’s numbers. How this will translate into overall yearly numbers for 2013 remains to be seen. Perhaps the prolonged period of severe winter weather we experienced during the first quarter, adversely affected the Nantucket real estate market. With Spring supposedly here, and our busy season just around the corner, time will tell. Stay tuned.
- a student of the current real estate market, and a licensed real estate salesperson since 1987, Rob has been helping to perform real estate appraisals with Denby Real Estate, Inc. since 1996 as an apprentice appraiser, construction 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.