2014 Real Estate Review
“History never looks like history when you are living through it.” -- John W. Gardner (1912 – 2012)
Well it took almost ten years to do it, but real estate sales topped the one billion dollar mark for the third time in history on Nantucket. 2014 made history as the third highest dollar volume year in Nantucket real estate history after 2005 and 2004 (one and two respectively). What do these real estate numbers tell us about the 2014 market and do they help us look forward into 2015? Let’s take a look.
In real estate analysis, we must look backward to look forward. Looking back over recent years (for comparison to 2014), we see that in 2012 there were a total of 546 total transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 384 during 2011 and 415 in 2010. The total dollar amount of real estate changing hands in 2012 was approximately $834 million, while in 2011 it was approximately $542 million and approximately $690 million in 2010.
In 2013, there were a total of 506 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc) with a total dollar volume of approximately $754 million, down about 7% in number of transactions, and down about 10% in total dollar volume from 2012. By comparison, in 2014, there were 566 total transactions, with a total dollar volume of about $1.012 billion, a 12% increase in transactions and a 34% increase in dollar volume over 2013. By the numbers, 2014 is significantly better in comparison to any of the past 5 years.
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. In 2013, there were an estimated 12 foreclosures, representing about 1% of the market. As of the end of 2014, there were an estimated 9 foreclosures in 2014, representing approximately 1% of the market by dollar volume.
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 was $749,000, up 6% from 2011’s numbers. At the end of 2013, the average home sale was $1.94 million, up about 5% from the average home sale in 2012. Additionally, in 2013 there were 17 home sales over $5 million, with eight of those over $10 million, representing 24% of the market by dollar volume; as compared to 2012 which saw only 21% of the market comprised of home sales over $5 million. In 2014, there were ten home sales over $10 million (three of those were over $20 million), 25 home sales over $5 million (representing 23% of the market), and 239 sales over $1 million (or about 70% of the market by dollar volume).
Vacant land sales increased modestly in 2010 versus 2009, 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 2013, there were 89 vacant lot sales, with an average lot sale of $792,000. By comparison in 2014, there were also 89 vacant land sales, with an average lot sale of $1.130 million, or a 43% increase over the average in 2013.
2009 is the record holder for the year with the fewest number of building permits being issued since 1972 (the first year building permits were required and thus records were kept), 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. In 2013, there were 108 single-family permits issued, a significant increase over recent years. In 2014, 140 single-family permits were issued, a 30% increase over 2013.
Overall sales volume (number of transactions) and dollar volume of those sales were down in 2013, compared to 2012’s numbers. The numbers for 2013, in comparison to recent years, show a market generally increasing from the lows of 2009, but doing so in much the same way a train starts off from the station, jerking awkwardly at first, but gradually gaining momentum. 2014 ended as a much stronger year than any other year out of the past five, with 2012 at a close second. Is this market strength sustainable into 2015? Will 2014 and 2015 end up looking like 2004 and 2005? Stay tuned.