2016 First Quarter Update
“Even if you’re on the right track, you’ll get run over if you just sit there.” – Will Rogers (1879 – 1935)
2014 made history as Nantucket real estate’s third $1 billion dollar year after 2005 and 2004 (one and two respectively). Continuing a recent multi-year trend since 2009 (even years up, odd years down), 2015 ended on a more muted note than 2014, falling short of the lofty $1 billion dollar milestone. 2016 has begun on a slightly more positive note compared to 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 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, in 2015, there were 514 total transactions, with a total dollar volume of about $883 million, a 9% decrease in transactions and a 13% decrease in total dollar volume from 2014. Through the first quarter of 2016, there have been 121 total transactions, with a total dollar volume of about $201 million. This is an approximate 27% increase in transactions and a 10% increase in dollar volume over the first quarter of 2015.
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. There were an estimated 9 foreclosures in 2014, representing approximately 1% of the market by dollar volume. For all of 2015, there were an estimated 4 foreclosures, representing about 0.2% of the market by dollar volume.
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, the average home sale was 2.124 million (up 9% from 2013) and there were 10 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).
In 2015, the average home sale was $2.133 million (statistically unchanged from 2014), supported by 59 home sales over $3 million, 20 home sales over $5 million and 6 home sales over $10 million (with 1 of those over $25 million). The average sale in the $500,000 to $999,000 range was $764,000, up 2% from the $751,000 average for this market segment in 2014.
Through the first quarter of 2016, the average home sale was $1.988 million (down about 7% from the first quarter of 2015), supported by 53 home sales over $1 million, 13 home sales over $3 million, 4 home sales over $5 million and 1 home sale over $10 million. The average sale in the $500,000 to $999,000 range was $739,000, down 3% from the $764,000 average for this market segment in 2015.
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 2015, there were 98 vacant lot sales, with an average lot sale of $965,000, down about 15% from the average vacant lot sale in 2014. Through the first quarter of 2016, there have been 16 vacant lot sales, with an average lot sale of $1.165 million, up about 21% from the same period in 2015 (buoyed in large part by a $6million vacant waterfront sale).
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, and 2011 saw 54 single-family permits issued, only 1 more than were issued in 2010. 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 preceding years. In 2014, 140 single-family permits were issued, a 30% increase over 2013. In 2015, 141 single-family permits were issued. Through the first quarter of 2016, 34 single-family permits have been issued, representing an annualized total of 136 at the current pace.
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 continued a recent trend of even numbered years on the upswing and odd numbered years, by comparison, on the downswing. Will this recent trend continue and will 2016 be a stronger year than 2015, perhaps even rivaling the strength of 2014? 2016 seems to have started on a note consistent with this recent trend. Stay tuned.
- a student of the current real estate market, and a licensed real estate salesperson since 1987, Rob has been contributing to real estate appraisals with Denby Real Estate, Inc. since 1996 as an apprentice appraiser, construction progress 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.