June 2020 Nantucket Market Insights from Fisher Real Estate

JUN 20

NANTUCKET REAL ESTATE Market Insights BY JEN ALLEN

MONTHLY SALES HIGHLIGHTS

HIGHEST SALE

QUICKEST SALE

$16,000,000

$8,130,000

36 WASHING POND ROAD MARKETED FOR [1.5 Months]

June 2020 Nantucket real estate data continued to show the impact of the pandemic on the local market.

In total, monthly sales included 18 transactions totaling $47.5 million, a 42 percent decline in both transaction and dollar volume from June 2019.

In fact, the entirety of the second quarter was down approximately 40 percent from 2Q19. Given that the first quarter of the year didn’t reflect much of the impact of COVID-19, cumulative data through June 30, 2020 posted a 24 percent decline in transactions and a 14 percent drop in dollar volume. Yet, while June sales data was more markedly lower than historic norms, new contract activity surged ahead. Combined with a significantly reduced level of property inventory, we anticipate the third quarter will rebound quite nicely.

Until then, here are Fisher’s Market Insights for 1H20…

137 ORANGE STREET MARKETED FOR [22 Months]

KEY MARKET STATISTICS ALL PROPERTY TYPES

FY 2020

Transactions

FY 2019

% CHANGE YOY

5-YEAR AVG.

128

168

–24% f

182

$323,695

$378,546

-14% f

$386,719

6.3

7.1

–11% f

7

Sale Price to Last Ask Price

92%

94%

–2 f

93%

Active Listings (June)

350

457

-23% f

402

Months Supply of Inventory

10.2

14.3

-29% f

10.7

57

40

43% d

30

Dollar Volume ($in 000s) Avg. Months on Market

New Contracts (June)

NANTUCKET REAL ESTATE ACTIVITY THROUGH JUNE 2011–2020

# of Transactions

©2020 FISHER REAL ESTATE

REVIEW

$2,000,000

5 POND VIEW DRIVE MARKETED FOR [1 Day]

Dollar Volume

FISHER’S

COMMERCIAL SALE

Dollar Volume per Quarter

Q1

Q2

# of Transactions

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

1

DE J UN C 16 20

NANTUCKET REAL ESTATE

Market Insights

BY JEN ALLEN SHALLEY

1H20 RESIDENTIAL SALES ANALYSIS RESIDENTIAL SALES ACTIVITY

RESIDENTIAL SALES ANALYSIS BY PRICE POINT

TRANSACTION VOLUME STILL IMPACTED BUT AVERAGE SALE VALUE ROSE

SALES INCREASED IN THE UPPER END OF THE MARKET

2020

Total Transactions

2019

% Change

5-Year Avg (2016–20)

98

105

–7% f

124

$282,798,600

$260,263,950

9% d

$309,899,608

Avg. Selling Price

$2,885,700

$2,478,704

16% d

$2,513,964

Median Selling Price

$2,050,000

$1,750,000

17% d

$1,781,600

6.7

7.8

–14% f

7.2

91%

94%

-3 f

93%

86%

89%

–3 f

89%

127%

127%

0

126%

Total Sales Dollar Volume

Avg. Months on Market Avg. Price as % of Last Ask Avg. Price as % of Original Ask Avg. Price as % of Assessed Value

•

Despite a quiet April, May and June market, single-family home sales (excluding condos, co-ops & 40B/covenant properties) through June 30, 2020 totaled 98 transactions with $283 million in total dollar volume. This represented a 7 percent year-over-year decline in transactions, but a nine percent increase in dollar volume thanks to higher end transaction activity. As compared to the five-year average, transaction levels were down 21 percent while dollar volume was off nine percent.

•

•

•

In reviewing residential sales activity by price point, home sales for less than $1 million and between $1 million and $2 million declined year-over-year and from the five-year average. This isn’t all that surprising given that there were just 13 homes listed for sale for less than $1 million as of June 30, 2020 and only 44 listed (compared to 86 in 2019) between $1 million and $2 million.

Two $20M transactions in the first half of the year not only buoyed sales volume but also the average home sale value which jumped 16 percent from both June 2019 and the five-year average. Property marketing times declined a little more than one month, dropping to an average of 6.7 months. Not surprisingly, average sales discounts also declined from one year ago given all the uncertainty in the market earlier this year. We anticipate discounts will narrow in coming months given the robust new purchase activity in June and July.

•

The most significant increase in transaction activity was in the $2 million to $3 million segment and the $4 million to $5 million segment, both of which jumped five percentage points in total transaction activity from one year ago. Property inventory levels were largely stable year-over-year for the $2 million to $3 million segment, but were 23 percent lower in the $4 million to $5 million segment, with relative scarcity creating a sense of urgency for buyers in this price point.

For the first time in four years, single-family home inventory was notably lower than prior summer selling seasons. As of June 30, there were just 259 properties formally listed for sale.

This compares with 359 properties one year ago and 313 properties for the five-year June average. This, too, is expected to change in the coming months as July inventory increased as the market rebounded.

•

While the $8 million to $20 million segment was quiet through June 30, 2020, the ultra-high-end of the market saw two transactions above $20 million. This is one more transaction that we saw for the full-year results over the last couple of years. Based on current contract activity, we anticipate we will continue to see higher end transaction activity in the coming months.

FORWARD MARKET INDICATORS CONTRACT ACTIVITY

# of Contracts ©2020 FISHER REAL ESTATE

•

MARKETING TIMES RANGE FROM THREE MONTHS TO 60 MONTHS

May

Months

April

•

PROJECTED MONTHS ON MARKET FOR SFH

Number of Properties

NEW PURCHASE ACTIVITY REBOUNDED IN JUNE

June

After dropping to historic lows in April and May, new purchase activity made an exceptionally strong comeback in June. Recorded contracts (Offers to Purchase and Purchase & Sale Contracts excluding duplicates) soared to 57 contracts from a mere six and 18 contracts respectively in April and May. This also compares well to the 40 contracts booked in June 2019. Much of this activity likely stemmed from pent-up demand from what was otherwise setting up to be a healthy spring market prior to the pandemic. That said, preliminary July activity looks similarly strong so we will have to evaluate how long this renewed strength persists. Historically, the third quarter is the strongest quarter for new contracts so 2020 sales could surpass 2019 if purchase activity continues to be this healthy.

Most of the June contracts, 28 percent, were for properties last priced between $1 million and $2 million, significantly lower than the 54 percent that comprised this segment in 2019.

New contract activity for the $2 million to $3 million price point increased five percentage points from one year ago, as did contracts for properties last listed between $3 million and $4 million. The high-end of the market ($5 million+) also saw more contract activity from one year ago, at least for what was noted in the MLS.

•

Given the reduction in inventory by price point, it’s an interesting time to evaluate how the projected months on market timeline has shifted by comparing trailing 12-month sales to the current inventory by each million-dollar price point. (It will get more interesting as we have more sales data in the coming months).

•

Assuming sales activity continues at the trailing 12-month pace, homes priced less than $1 million are expected to sell in approximately three and a half months, while homes priced between $6 million and $7 million may take approximately 18 months to sell, or as many as 60 months for properties between $8 million and $9 million (at least according to trailing data). What this analysis doesn’t provide for is that there is often a big difference in the marketing time of newer, renovated homes versus older homes. And, of course, many trends may be shifting given the current environment in what looks to be increasing momentum in the high-end of the market.

•

While these projections provide an indication of current market dynamics in specific price points, they are based on historic data so could naturally change pending future sales trends, which we are keeping a keen eye on.

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

2

J UN 20

NANTUCKET REAL ESTATE

Market Insights

BY JEN ALLEN

CLOSE

RESIDENTIAL SALES ACTIVITY TRANSACTION VOLUME STILL IMPACTED BUT AVERAGE SALE VALUE ROSE

2020

Total Transactions

2019

% Change

5-Year Avg (2019–20)

98

105

–7% f

124

$282,798,600

$260,263,950

9% d

$309,899,608

Avg. Selling Price

$2,885,700

$2,478,704

16% d

$2,513,964

Median Selling Price

$2,050,000

$1,750,000

17% d

$1,781,600

6.7

7.8

–14% f

7.2

Avg. Price as % of Last Ask

91%

94%

-3 f

93%

Avg. Price as % of Original Ask

86%

89%

–3 f

89%

127%

127%

0

126%

Total Sales Dollar Volume

Avg. Months on Market

Avg. Price as % of Assessed Value

•

Despite a quiet April, May and June market, single-family home sales (excluding condos, co-ops & 40B/covenant properties) through June 30, 2020 totaled 98 transactions with $283 million in total dollar volume. This represented a 7 percent year-over-year decline in transactions, but a nine percent increase in dollar volume thanks to higher end transaction activity. As compared to the five-year average, transaction levels were down 21 percent while dollar volume was off nine percent.

•

Two $20M transactions in the first half of the year not only buoyed sales volume but also the average home sale value which jumped 16 percent from both June 2019 and the fiveyear average. Property marketing times declined a little more than one month, dropping to an average of 6.7 months. Not surprisingly, average sales discounts also declined from one year ago given all the uncertainty in the market earlier this year. We anticipate discounts will narrow in coming months given the robust new purchase activity in June and July.

•

For the first time in four years, single-family home inventory was notably lower than prior summer selling seasons. As of June 30, there were just 259 properties formally listed for sale. This compares with 359 properties one year ago and 313 properties for the five-year June average. This, too, is expected to change in the coming months as July inventory increased as the market rebounded.

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

3

J UN 20

NANTUCKET REAL ESTATE

Market Insights

BY JEN ALLEN

CLOSE

RESIDENTIAL SALES ANALYSIS BY PRICE POINT SALES INCREASED IN THE UPPER END OF THE MARKET

•

In reviewing residential sales activity by price point, home sales for less than $1 million and between $1 million and $2 million declined year-over-year and from the five-year average.

This isn’t all that surprising given that there were just 13 homes listed for sale for less than $1 million as of June 30, 2020 and only 44 listed (compared to 86 in 2019) between $1 million and $2 million.

•

The most significant increase in transaction activity was in the $2 million to $3 million segment and the $4 million to $5 million segment, both of which jumped five percentage points in total transaction activity from one year ago. Property inventory levels were largely stable year-over-year for the $2 million to $3 million segment, but were 23 percent lower in the $4 million to $5 million segment, with relative scarcity creating a sense of urgency for buyers in this price point.

•

While the $8 million to $20 million segment was quiet through June 30, 2020, the ultra-high-end of the market saw two transactions above $20 million. This is one more transaction that we saw for the full-year results over the last couple of years. Based on current contract activity, we anticipate we will continue to see higher end transaction activity in the coming months.

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

4

Market Insights

BY JEN ALLEN

CLOSE

CONTRACT ACTIVITY NEW PURCHASE ACTIVITY REBOUNDED IN JUNE

# of Contracts

J UN 20

NANTUCKET REAL ESTATE

April

May

June

•

After dropping to historic lows in April and May, new purchase activity made an exceptionally strong comeback in June. Recorded contracts (Offers to Purchase and Purchase & Sale Contracts excluding duplicates) soared to 57 contracts from a mere six and 18 contracts respectively in April and May. This also compares well to the 40 contracts booked in June 2019. Much of this activity likely stemmed from pent-up demand from what was otherwise setting up to be a healthy spring market prior to the pandemic. That said, preliminary July activity looks similarly strong so we will have to evaluate how long this renewed strength persists. Historically, the third quarter is the strongest quarter for new contracts so 2020 sales could surpass 2019 if purchase activity continues to be this healthy.

•

Most of the June contracts, 28 percent, were for properties last priced between $1 million and $2 million, significantly lower than the 54 percent that comprised this segment in 2019.

New contract activity for the $2 million to $3 million price point increased five percentage points from one year ago, as did contracts for properties last listed between $3 million and $4 million. The high-end of the market ($5 million+) also saw more contract activity from one year ago, at least for what was noted in the MLS.

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

5

Market Insights

BY JEN ALLEN

CLOSE

PROJECTED MONTHS ON MARKET FOR SFH MARKETING TIMES RANGE FROM THREE MONTHS TO 60 MONTHS

Months

Number of Properties

J UN 20

NANTUCKET REAL ESTATE

•

Given the reduction in inventory by price point, it’s an interesting time to evaluate how the projected months on market timeline has shifted by comparing trailing 12-month sales to the current inventory by each million-dollar price point. (It will get more interesting as we have more sales data in the coming months).

•

Assuming sales activity continues at the trailing 12-month pace, homes priced less than $1 million are expected to sell in approximately three and a half months, while homes priced between $6 million and $7 million may take approximately 18 months to sell, or as many as 60 months for properties between $8 million and $9 million (at least according to trailing data).

What this analysis doesn’t provide for is that there is often a big difference in the marketing time of newer, renovated homes versus older homes. And, of course, many trends may be shifting given the current environment in what looks to be increasing momentum in the highend of the market.

•

While these projections provide an indication of current market dynamics in specific price points, they are based on historic data so could naturally change pending future sales trends, which we are keeping a keen eye on.

(508) 228–4407 21 MAIN STREET, NANTUCKET, MASSACHUSETTS

6