March Market Insights - Nantucket Real Estate

FISHER’S MAR ‘23 REVIEW

BY JEN ALLEN

KEY MARKET METRICS

First quarter Nantucket real estate transactions dropped to figures not seen since 2009 but signs continued to point to this reduction being driven by limited inventory given multiple bid situations and significant appreciation figures being posted. After a slower than typical start to 2023, March sales rebounded and first quarter activity totaled 45 transactions totaling $165 million in sales, a respective decline of 47 percent and 38 percent from 1Q22.

Additionally, new contract activity during the month was just as strong as it’s been the last few years, signaling the market remains on solid ground and may well stay that way if real estate continues to be a haven for investors looking to diversify assets amidst unrest in the financial markets. Here are Fisher’s March Market Insights...

NANTUCKET REAL ESTATE ACTIVITY

MONTHLY SALES HIGHLIGHTS

MARCH ‘23 REVIEW

Market Insights BY

JEN ALLEN

RESIDENTIAL SALES ACTIVITY

VOLUME DOWN BUT MARKET STILL VIBRANT

• First quarter single-family home sales (excluding condos, co-ops, multi-family & covenant properties) were one-third lower than both 2022 and the five-year average. Yet, based on multiple bid activity, particularly for properties in Town, the decline in volume seems more to do with inventory selection than it does a drastic change in buyer demand. At least three of the properties that sold during March had multiple offers and there were plenty more in January and February suggesting the market remains quite vibrant.

• Although high-end residential sales perked up during March with four single-family home sales above $5 million, including a speculative sale for $5.725 million and the resale of 25 Ellens Way for $6 million, they were notably lower in 2023 than in 2022. This resulted in a $1 million decline in the median home sale value, though we anticipate this is a temporary decline that will likely shift in the coming months.

• First quarter marketing times remained swift with just 2.8 months as the average listing period while sales discounts were slightly stronger than one year ago.

CONTRACT ACTIVITY

MODEST NEW PURCHASE ACTIVITY

• Based on first quarter recorded contract activity, the future sales pipeline doesn’t seem to be shifting meaningfully in the coming months. Offers to Purchase and Purchase & Sale Contracts (excluding duplicates) were well below the golden years of 2021 & 2022 and even below 2019 and 2020 figures. This said, there is a healthy amount of off-market or pre-market contract activity occurring for properties not yet listed in the MLS thanks to brokers activity seeking to meet buyer demand.

• Of the contracts that were publicly recorded during March, all were for properties listed for less than $7 million. Twenty percent of the contracts were for properties last listed between $2 million to $3 million with every other price point securing a 13 percent share. There was no ultra-high-end activity (at least formally on the books) in 1Q23 whereas both 2021 & 2022 had two contracts each during March of the corresponding years.

PROPERTY INVENTORY (ALL TYPES)

SLIGHT BUMP IN SPRING LISTINGS

• As of March 31, 2023, total inventory for all Nantucket property types (residential, land and commercial properties) tallied 97 properties, 30 more properties than during this time in 2022 but still well below pre-pandemic levels.

• In looking at single-family listings by price point at the end of the first quarter, there was a modest increase in inventory across every million-dollar price point aside from properties listed between $8 million and $9 million. The price point which saw the biggest increase in the number of new listings (not as a percentage of existing listings) was the $2 million to $3 million price point. This could be good news for future transaction activity as this price point typically represents the highest percentage of sales.