2015 First Quarter Update
“Be not afraid of growing slowly, be afraid only of standing still.” -- Chinese Proverb
2014 made history as the third highest total dollar volume year in Nantucket real estate history after 2005 and 2004 (one and two respectively). Now that the first quarter of 2015 has come to a close, what do the real estate numbers tell us about the 2015 market so far? Let’s take a look.
In real estate analysis, we must look backward to look forward. Looking back over recent years (for comparison to 2015), we see that in 2013 there were a total of 506 total transactions (houses, land, condos, commercial, timeshares, foreclosures, etc), as compared to 546 during 2012 and 384 in 2011. The total dollar amount of real estate changing hands in 2013 was approximately $754 million, while in 2012 it was approximately $834 million and approximately $542 million in 2011.
In 2014, there were a total of 566 transactions (houses, land, condos, commercial, timeshares, foreclosures, etc) with a total dollar volume of just over $1 billion, up about 12% in number of transactions, and up about 34% in total dollar volume from 2013. By comparison, through the first quarter of 2015, there have been 95 total transactions, with a total dollar volume of about $182 million, a 15% decrease in transactions and a 4% increase in dollar volume over the first quarter of 2014. By the numbers, 2014 was significantly better in comparison to any of the previous 5 years before it and 2015 has begun on a similar footing, continuing this trend.
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. Through the first quarter of 2015, there have been an estimated 2 foreclosures, representing about 0.5% of the market by dollar volume.
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. 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). So ar in 2015, through the first three months, the average home sale is $2.34 million, buoyed by 13 home sales over $3 million, 6 home sales over $5 million and 1 home sale over $10 million.
Vacant land sales have been increasing since 2009. In 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. In the first three months of 2015, there have been 16 vacant lot sales, with an average lot sale of $926,000, down about 18% from where 2014 ended.
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. As of the end of March, there have been 29 single-family permits issued in 2015, an annualized rate of 116 at the current rate.
Overall sales volume (number of transactions) and dollar volume of those sales were down in 2013, compared to 2012’s numbers. 2014 ended as a much stronger year than any other year out of the past five, with 2012 at a close second. 2015 appears to be continuing, at least so far, what 2014 started in terms of market momentum. Will 2014 and 2015 end up looking like 2004 and 2005? Stay tuned.