May Market Insights - Nantucket Real Estate

NANTUCKET REAL ESTATE Market Insights BY JEN ALLEN MONTHLY SALES HIGHLIGHTS

HIGHEST SALE

QUICKEST SALE

$10,650,000

$1,455,000

FISHER’S

4B HAWTHORNE LANE MARKETED FOR [303 Days]

KEY MARKET STATISTICS

REVIEW

ALL PROPERTY TYPES

FY 2021

Transactions Dollar Volume ($in 000s)

FY 2020

% CHANGE YOY

5-YEAR AVG.

277

110

152% d

168

$721,125

$276,193

161% d

$391,126

5.9

6.2

-5% f

6.7

95%

93%

2d

94%

-57% f

312

Avg. Months on Market Sale Price to Last Ask Price Active Listings (May)

139

325

Months Supply of Inventory

2.1

9.8

-79% f

11.0

New Contracts (May)

57

18

217% d

33

NANTUCKET REAL ESTATE ACTIVITY THROUGH MAY 2011–21

# of Transactions

Just when we thought historic records couldn’t possibly continue to be dwarfed, Nantucket’s spring and early summer market took hold. April 2021 activity measured five times the dollar volume of the historical average while May 2021 sales were also recordsetting. Though May dollar volume declined to just half of the meteoric $250 million in sales we saw just one month ago, the $119 million in sales far surpassed any previous May on record. These exuberant transaction months brought Nantucket real estate sales to 277 transactions totaling $721 million through May 31, 2021. This is a respective 152 percent and 161 percent increase from 2020, which of course was a record year for the island. Full price offers have increased substantially, high-end sales continue to drive dollar volume, marketing times are plummeting, and inventory remains historically low. Here are Fisher’s May market insights….

$1,595,000

8 NEW STREET MARKETED FOR [1 Day]

Dollar Volume

MAY 21

99 CLIFF ROAD MARKETED FOR [14 Days]

HIGHEST LAND SALE

Dollar Volume per Quarter

Q1

Q2YTD

# of Transactions

© 2 0 2 1 F I S H E R R E A L E S TAT E

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

1

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

RESIDENTIAL SALES SUMMARY

RESIDENTIAL SALES ACTIVITY

RESIDENTIAL SALES ANALYSIS BY PRICE POINT

RECORD SALES CONTINUE IN 2021

HIGH-END SALES CONTINUE TO PROPEL DOLLAR VOLUME

2021

Total Transactions Total Sales Dollar Volume Avg. Selling Price Median Selling Price Avg. Months on Market

% Change

$5M–$10M

5-Year Avg (2017-21)

>$10M

Transactions

Total Sales Volume

Transactions

Total Sales Volume

2011

2

$10,875,000

-

-

2012

4

$26,147,500

-

-

2013

2

$16,691,300

1

$20,000,000

167

81

106% d

111

$509,781,625

$235,621,100

116% d

$297,286,726

$3,052,585

$2,908,902

5% d

$2,632,871

$2,400,000

$1,950,000

23% d

$1,865,000

2014

5.6

6.6

14% f

7.0

5

$30,225,000

-

-

2015

7

$46,748,875

2

$21,225,000

Avg. Price as % of Last Ask

95%

92%

3d

93%

2016

5

$33,225,000

2

$25,900,000

Avg. Price as % of Original Ask

92%

86%

6d

89%

2017

6

$46,783,000

2

$25,490,000

142%

130%

12d

130%

2018

12

$77,760,000

2

$28,850,000

With the most stellar first five months of the year ever recorded, single-family home sales (excluding condos, co-ops & 40B/covenant properties) through May 31, 2021, totaled 167 transactions with $510 million in total dollar volume. Both figures represent twice the level of activity we saw during the same period one year ago. Naturally, there was a slowdown in the market in April and May of 2020 but even as compared to the five-year average, 2021 transaction levels increased 50 percent while dollar volume rose 72 percent.

2019

5

$32,895,000

1

$11,670,000

2020

8

$47,465,500

2

$48,500,000

2021

21

$142,561,150

2

$26,350,000

Avg. Price as % of Assessed Value •

•

MAY 21

2020

So far this year, 12 properties sold for more than the listing price and another 33 traded at full asking price. For the same period in 2020, there were only four properties that traded above the asking price and 12 which traded for full asking price. What the 2021 figures don’t capture are the behind-the-scenes pricing of the 63 private transactions that have taken place so far this year. Many of these transactions simply never officially hit the market (ie pre-construction properties or listings that sold before they were formally placed in the MLS) but we suspect the terms follow these early 2021 trends. All of which is to say that the current market is still moving rapidly, and sellers are often not conceding much in the way of sales price.

•

In reviewing residential sales activity by price point, the most significant increase in transaction activity as a percentage of total activity was in the $3 million to $4 million and the $4 million to $5 million segment, which jumped five percentage points and three percentage points respectively from one year ago. From a transaction volume perspective, sales in both segments tripled from 2020.

•

In aggregating the high-end of the market for sales between $5 million and $10 million (“highend”) and then $10 million and above (“ultra-high-end”), one can see that the trend we began noticing in the second half of 2020 continued with fervor into the first part of 2021. High-end sales are significantly higher than any other period within the last 10 years and, with such a fiery transaction start to 2021, the cumulative dollar volume figures are relatively massive as compared to any other year. Through May 31, 2021, the high-end of the market contributed $143 million in total sales compared to just $47 million in 2020 and $33 million in 2019. The most recent, ‘best’ market for high-end sales was in 2018 and even at that time high-end sales were half of what they’ve been so far in 2021. Interestingly, nine of the 21 sales that took place above $5 million were speculative development properties.

FORWARD MARKET INDICATORS

MEDIAN SALE PRICE & DOM

INVENTORY

MEDIAN SALE VALUE RISING, MARKETING TIME PLUMMETING

STRONG DEMAND CONTINUED TO PRESSURE SUPPLY

Median Selling Price

Average Days on Market

•

•

It should come as no surprise that property values are on the rise. As of May 31, 2021, the median home sale value was $2.4 million, 23 percent higher than one year ago. While this is an eyecatching figure, much of this growth stems from the high-end sales we previously mentioned.

Although the median home sale metric is superior to the average home sale metric when trying to quantify appreciation in a market as price diverse as Nantucket, the sheer volume of high-end sales is causing additional pressure on the natural upward trajectory of the metric. In fact, when we isolate appreciation analysis to the handful of properties that sold in 2021 and also within the last few years without significant alteration, the figures are dramatically lower and reflective of a more moderate appreciation range in the neighborhood of four to five percent.

The average length of time a property is marketed is inversely related to the strength of the market.

As such, we continue to see marketing times decline dramatically. As of May 31, 2021, the average days on market for single-family homes dropped to a record low of 166 days. This compares to 222 days one year ago and 195 days for the five-year average. In reality, many properties coming to the market are transacting far more quickly than this average. This is due to the fact that properties like 5 Orange Street, which sold in May 2021, was marketed for 46 months prior to sale. There are several examples like this that greatly skew the average.

•

Although seasonal inventory continued to come to market in May, Nantucket property inventory was drastically lower than one year ago. As of May 31, 2021, there were just 139 properties listed for sale including residential (118), commercial (6) and vacant land (15) listings. The total months’ supply, or how long it would take to sell all listings based on trailing 12-month sales, measured just 2 months, 8 months faster than the same period last year.

•

Every price point from the entry-level to the high end of the market had markedly less inventory than one year ago. The $1 million to $2 million segment saw the largest yearover-year declines with just 12 properties listed (versus 45) as of May 31, 2021. The $2 million to $3 million segment was also significantly lower with 19 properties listed in May as compared to 59 properties one year ago. Ultra-high-end inventory above $10 million saw just a slight decline in inventory, with 13 properties listed as compared to 14 in 2020.

•

We anticipate more inventory could hit the market in late summer but it is unlikely to be sufficient to balance out the supply and demand dynamics in this market.

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

2

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

RESIDENTIAL SALES ACTIVITY RECORD SALES CONTINUE IN 2021

2021

Total Transactions

% Change

5-Year Avg (2017-21)

167

81

106% d

111

$509,781,625

$235,621,100

116% d

$297,286,726

$3,052,585

$2,908,902

5% d

$2,632,871

$2,400,000

$1,950,000

23% d

$1,865,000

5.6

6.6

14% f

7.0

Avg. Price as % of Last Ask

95%

92%

3d

93%

Avg. Price as % of Original Ask

92%

86%

6d

89%

142%

130%

12d

130%

Total Sales Dollar Volume Avg. Selling Price Median Selling Price Avg. Months on Market

Avg. Price as % of Assessed Value

MAY 21

2020

• With the most stellar first five months of the year ever recorded, single-family home sales (excluding condos, co-ops & 40B/covenant properties) through May 31, 2021, totaled 167 transactions with $510 million in total dollar volume. Both figures represent twice the level of activity we saw during the same period one year ago. Naturally, there was a slowdown in the market in April and May of 2020 but even as compared to the five-year average, 2021 transaction levels increased 50 percent while dollar volume rose 72 percent.

• So far this year, 12 properties sold for more than the listing price and another 33 traded at full asking price. For the same period in 2020, there were only four properties that traded above the asking price and 12 which traded for full asking price. What the 2021 figures don’t capture are the behind-the-scenes pricing of the 63 private transactions that have taken place so far this year. Many of these transactions simply never officially hit the market (ie pre-construction properties or listings that sold before they were formally placed in the MLS) but we suspect the terms follow these early 2021 trends. All of which is to say that the current market is still moving rapidly, and sellers are often not conceding much in the way of sales price.

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

3

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

RESIDENTIAL SALES ANALYSIS BY PRICE POINT HIGH-END SALES CONTINUE TO PROPEL DOLLAR VOLUME

MAY 21

$5M–$10M

>$10M

Transactions

Total Sales Volume

Transactions

Total Sales Volume

2011

2

$10,875,000

-

-

2012

4

$26,147,500

-

-

2013

2

$16,691,300

1

$20,000,000

2014

5

$30,225,000

-

-

2015

7

$46,748,875

2

$21,225,000

2016

5

$33,225,000

2

$25,900,000

2017

6

$46,783,000

2

$25,490,000

2018

12

$77,760,000

2

$28,850,000

2019

5

$32,895,000

1

$11,670,000

2020

8

$47,465,500

2

$48,500,000

2021

21

$142,561,150

2

$26,350,000

•

In reviewing residential sales activity by price point, the most significant increase in transaction activity as a percentage of total activity was in the $3 million to $4 million and the $4 million to $5 million segment, which jumped five percentage points and three percentage points respectively from one year ago. From a transaction volume perspective, sales in both segments tripled from 2020 .

•

In aggregating the high-end of the market for sales between $5 million and $10 million (“high-end”) and then $10 million and above (“ultra-high-end”), one can see that the trend we began noticing in the second half of 2020 continued with fervor into the first part of 2021. High-end sales are significantly higher than any other period within the last 10 years and, with such a fiery transaction start to 2021, the cumulative dollar volume figures are relatively massive as compared to any other year. Through May 31, 2021, the high-end of the market contributed $143 million in total sales compared to just $47 million in 2020 and $33 million in 2019. The most recent, ‘best’ market for high-end sales was in 2018 and even at that time high-end sales were half of what they’ve been so far in 2021. Interestingly, nine of the 21 sales that took place above $5 million were speculative development properties.

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

4

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

MEDIAN SALE PRICE & DOM MEDIAN SALE VALUE RISING, MARKETING TIME PLUMMETING

MAY 21

Median Selling Price

Average Days on Market

•

It should come as no surprise that property values are on the rise. As of May 31, 2021, the median home sale value was $2.4 million, 23 percent higher than one year ago. While this is an eye-catching figure, much of this growth stems from the high-end sales we previously mentioned. Although the median home sale metric is superior to the average home sale metric when trying to quantify appreciation in a market as price diverse as Nantucket, the sheer volume of high-end sales is causing additional pressure on the natural upward trajectory of the metric. In fact, when we isolate appreciation analysis to the handful of properties that sold in 2021 and also within the last few years without significant alteration, the figures are dramatically lower and reflective of a more moderate appreciation range in the neighborhood of four to five percent.

•

The average length of time a property is marketed is inversely related to the strength of the market. As such, we continue to see marketing times decline dramatically. As of May 31, 2021, the average days on market for single-family homes dropped to a record low of 166 days. This compares to 222 days one year ago and 195 days for the five-year average. In reality, many properties coming to the market are transacting far more quickly than this average. This is due to the fact that properties like 5 Orange Street, which sold in May 2021, was marketed for 46 months prior to sale. There are several examples like this that greatly skew the average.

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

5

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

INVENTORY

MAY 21

STRONG DEMAND CONTINUED TO PRESSURE SUPPLY

•

Although seasonal inventory continued to come to market in May, Nantucket property inventory was drastically lower than one year ago. As of May 31, 2021, there were just 139 properties listed for sale including residential (118), commercial (6) and vacant land (15) listings. The total months’ supply, or how long it would take to sell all listings based on trailing 12-month sales, measured just 2 months, 8 months faster than the same period last year.

•

Every price point from the entry-level to the high end of the market had markedly less inventory than one year ago. The $1 million to $2 million segment saw the largest yearover-year declines with just 12 properties listed (versus 45) as of May 31, 2021. The $2 million to $3 million segment was also significantly lower with 19 properties listed in May as compared to 59 properties one year ago. Ultra-high-end inventory above $10 million saw just a slight decline in inventory, with 13 properties listed as compared to 14 in 2020.

•

We anticipate more inventory could hit the market in late summer but it is unlikely to be sufficient to balance out the supply and demand dynamics in this market.

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

6