2016 Market Wrap-Up
“Do not anticipate trouble, or worry about what may never happen. Keep in the sunlight.”
– Benjamin Franklin (1706 - 1790)
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 downward note from 2014, falling short of the lofty $1 billion dollar milestone, while this multi-year trend continued through 2016, lifting the market back up somewhat. Let’s take a look.
In real estate analysis, we must look backward to look forward. Looking back over recent years (for comparison to 2016), we see that 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. For 2016, there were 534 total transactions, with a total dollar volume of about $972 million. This is an approximate 4% increase in transactions and a 10% increase in dollar volume over 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. In 2016, there were an estimated 10 foreclosures, representing about 0.1% 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.
By the end of 2016, the average home sale was $2.276 million (up about 7% from 2015), supported by 262 home sales over $1 million, 83 home sales over $3 million, 32 home sales over $5 million and 7 home sales over $10 million. The average sale in the $500,000 to $999,000 range was $760,000, about even with 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. In 2016, there were 74 vacant lot sales, with an average lot sale of $1.027 million, up about 6% from 2015 (buoyed in large part by a $6 million 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. At the end of 2016, 150 single-family permits had been issued, up slightly from 2015’s permit numbers.
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 previous 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. 2016 showed some modest renewed market strength, continuing this recent trend. Stay tuned.