May Market Insights - Nantucket Real Estate

NANTUCKET REAL ESTATE Market Insights BY JEN ALLEN MONTHLY SALES HIGHLIGHTS

$17,600,000

$1,770,000

$3,100,000

27 TASHAMA LANE MARKETED FOR [2 Days] (111% of ask)

FISHER’S

2 NAUTILUS LANE MARKETED FOR [20 Days] (72% return)

KEY MARKET STATISTICS

REVIEW

ALL PROPERTY TYPES

FY 2022

Transactions Dollar Volume ($ in 000s)

FY 2021

% CHANGE YOY

5-YEAR AVG.

165

279

-41% f

174

$575,898

$724,379

-20% f

$450,005

2.9

5.8

-50% f

6

Avg. Months on Market Sale Price to Last Ask Price

97%

95%

2d

94%

Active Listings (May)

115

139

-17% f

266

Months Supply of Inventory

2.2

2.1

6% d

8.4

New Contracts (May)

27

57

-53% f

31

NANTUCKET REAL ESTATE ACTIVITY THROUGH MAY 2011–22

# of Transactions

Dollar Volume

MAY 22

41 HULBERT AVENUE MARKETED FOR [13 Days]

It’s becoming clear that 2021 may be the peak of the pandemic-era real estate market as 2022 sales are struggling to match what was the most exceptional year for the island.

Although May dollar volume declined to just half of the $200 million in sales we saw one year ago, the $107 million in sales through 34 transactions is still competitive with historic figures. The market appears to be settling into a more measured pace due both to continued low inventory but also the headwinds created by rising interest rates. May transactions brought cumulative Nantucket real estate sales to 165 transactions totaling $576 million through May 31, 2022. This is a respective 40 percent and 20 percent decrease from 2021 but similar to transaction volume for the five-year average. Dollar volume has been notably vibrant due to continued sales activity in the upper end of the market, which also lifted the median home sale value substantially. As we head into the peak selling season, it will be interesting to watch whether the price change activity witnessed in May continues and whether the inventory and marketing time landscape shifts amidst a higher rate environment.

Here are Fisher’s May market insights ….

NOTABLE RETRADE SALE

HIGHEST PREMIUM TO LIST SALE

HIGHEST SALE

Dollar Volume per Quarter

Q1

YTD Q2

# of Transactions

© 2 0 2 2 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 RESIDENTIAL SALES ACTIVITY

RESIDENTIAL SALES ANALYSIS BY PRICE POINT

TRANSACTION VOLUME DOWN, DOLLAR VOLUME STRONG 2022

Total Transactions

% Change

HIGH-END & ULTRA HIGH END SALES SUMMARY $5M–$10M

5-Year Avg (2018-22)

>$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

103

169

-39% f

112

$450,910,007

$513,035,674

-12% f

$338,960,178

Avg. Selling Price

$4,377,767

$3,035,714

44% d

$3,018,323

Median Selling Price

$3,100,000

$2,350,000

32% d

$2,135,000

2014

3.6

5.6

-35% f

6.3

5

$30,225,000

-

-

2015

7

$46,748,875

2

$21,225,000

Avg. Price as % of Last Ask

97%

95%

2d

94%

2016

5

$33,225,000

2

$25,900,000

Avg. Price as % of Original Ask

96%

92%

4d

90%

2017

6

$46,783,000

2

$25,490,000

180%

141%

38d

141%

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

Total Sales Dollar Volume

Avg. Months on Market

Avg. Price as % of Assessed Value

•

MAY 22

2021

BY JEN ALLEN

While single-family home sales (excluding condos, co-ops & 40B/covenant properties) were down 39 percent through May 31, 2022, as compared to one year ago, they were off just eight percent compared to the five-year average. On the other hand, dollar volume posted a less severe year-to-year decline of 10 percent but rallied 33 percent above the five-year average, illustrating the significant role the high-end of the market has played so far this year.

•

May transactions ranged from a $1.16 million sale of a one-bedroom property to the $17.6 million sale of a two-dwelling, waterfront property in Brant Point that traded above its asking price of $16.95 million. The latter represented the eighth property sale above $10 million through the period, quadruple the activity witnessed one year ago, as well as through the same time during any of the last ten years.

•

Through May 31, 2022, the median sale price increased to $3.1 million, 32 percent higher than 2021, while the average home sale price rocketed above $4 million on account of the higher proportion of sales above $10 million. The average marketing time also improved two months, averaging 3.6 months from listing date to purchase contract. Average sales discounts improved modestly while single-family inventory declined 14 percent from one year ago. These figures continued to paint a picture of a very solid residential market through May, prior to any impact from recent interest rate hikes.

•

•

2021

21

$142,561,150

2

$26,350,000

2022

18

$111,306,207

8

$139,975,000

•

In reviewing residential sales activity by price point, the most significant increase in transaction activity as a percentage of total activity was for single-family home sales above $10 million, which rose seven percentage points from one year ago. Sales between $5 million and $6 million saw the next biggest increase at five percentage points (which was similar to the change from the five-year average). Not surprisingly, home sales below $2 million saw the biggest declines on a year-to-year and five-year average basis.

•

In segregating 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 has continued with fervor, particularly in the ultra-high-end. Ultra-high-end sales are significantly higher than any other period within the last 10 years resulting in a significant contribution to annual dollar volume. Through May 31, 2022, the ultra-high-end of the market contributed $140 million in total sales compared to just $27 million at this time in 2021 and $48 million in 2020. The high-end ($5M-$10M) also continued at an impressive pace with $111 million year-to-date volume, down from 2021 but well above any other previous period. As we move into a high-interest-rate/high-inflation environment, it will be interesting to see whether these high-end transactions continue at such an impressive pace.

MEDIAN SALE PRICE & DOM

PROPERTY INVENTORY & PRICE REDUCTIONS

MEDIAN SALE SURGED, MARKETING TIME DIMINISHED

PRICE REDUCTIONS INCREASED, INVENTORY LIMITED

After two years of record property sales, it should come as no surprise that property values continue to be on the rise. As of May 31, 2022, the median home sale value was $3.1 million, 32 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 2021-2022, and within the last few years without significant alteration, the figures are substantially lower and reflective of a more moderate appreciation range around five percent. That said, there are a handful of new construction properties that saw appreciation rates higher than 30 percent so market-wide appreciation could be difficult to pinpoint as property attributes (like newer construction homes) are driving certain property values materially higher than others.

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 improve, although that may begin to change with recent interest rate activity. As of May 31, 2022, the average days on market for single-family homes dropped to a record low of 108 days. This compares to 166 days one year ago and 195 days for the five-year average. In reality, many properties coming to the market are still transacting far more quickly than this average. We are also now seeing some properties linger on the market a little longer than we saw just a few months ago so average marketing times vary by property pricing, location and amenities. The average marketing time varies from three months for homes priced less than $1 million to over 12 months for homes sold between $9 million and $10 million, for example.

•

There is a natural correlation in the level of property inventory to Nantucket’s peak season and although we are beginning to see a steady increase in inventory, levels remain well below historic averages. As of May 31, 2022, there were 115 properties (residential, land & commercial) listed for sale and the total months’ supply (how long it would take to sell all listings based on trailing 12-month sales) measured two and a half months. As compared to last year, the number of listed properties is lower for nearly every million-dollar pricing segment but held steady for the $5 million to $6 million and above $10 million price ranges.

•

Interestingly, despite the strength in all the market metrics, there was a notable increase in price reduction activity in May. Through the 31 days ending May 31, 2022, there were price adjustments to 19 properties, a 72 percent increase from the same period last year. The average price discount from the original list price was approximately 9 percent. The pricing adjustments may stem from overinflated pricing and/or a seller’s desire to get ahead of any potential slowdown in the market due to the rise in mortgage rates. The price adjustments were across nearly every price point and were not concentrated to any particular segment. We will continue to monitor this activity moving forward to see if we can glean any notable trends.

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

2

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

RESIDENTIAL SALES ACTIVITY TRANSACTION VOLUME DOWN, DOLLAR VOLUME STRONG 2022

Total Transactions

% Change

5-Year Avg (2018-22)

103

169

-39% f

112

$450,910,007

$513,035,674

-12% f

$338,960,178

Avg. Selling Price

$4,377,767

$3,035,714

44% d

$3,018,323

Median Selling Price

$3,100,000

$2,350,000

32% d

$2,135,000

3.6

5.6

-35% f

6.3

Avg. Price as % of Last Ask

97%

95%

2d

94%

Avg. Price as % of Original Ask

96%

92%

4d

90%

180%

141%

38d

141%

Total Sales Dollar Volume

Avg. Months on Market

MAY 22

2021

Avg. Price as % of Assessed Value

•

While single-family home sales (excluding condos, co-ops & 40B/covenant properties) were down 39 percent through May 31, 2022, as compared to one year ago, they were off just eight percent compared to the five-year average. On the other hand, dollar volume posted a less severe year-to-year decline of 10 percent but rallied 33 percent above the five-year average, illustrating the significant role the high-end of the market has played so far this year.

•

May transactions ranged from a $1.16 million sale of a one-bedroom property to the $17.6 million sale of a two-dwelling, waterfront property in Brant Point that traded above its asking price of $16.95 million. The latter represented the eighth property sale above $10 million through the period, quadruple the activity witnessed one year ago, as well as through the same time during any of the last ten years.

•

Through May 31, 2022, the median sale price increased to $3.1 million, 32 percent higher than 2021, while the average home sale price rocketed above $4 million on account of the higher proportion of sales above $10 million. The average marketing time also improved two months, averaging 3.6 months from listing date to purchase contract. Average sales discounts improved modestly while single-family inventory declined 14 percent from one year ago. These figures continued to paint a picture of a very solid residential market through May, prior to any impact from recent interest rate hikes.

(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 & ULTRA HIGH END SALES SUMMARY

MAY 22

$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

2022

18

$111,306,207

8

$139,975,000

•

In reviewing residential sales activity by price point, the most significant increase in transaction activity as a percentage of total activity was for single-family home sales above $10 million, which rose seven percentage points from one year ago. Sales between $5 million and $6 million saw the next biggest increase at five percentage points (which was similar to the change from the five-year average). Not surprisingly, home sales below $2 million saw the biggest declines on a year-to-year and five-year average basis.

•

In segregating 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 has continued with fervor, particularly in the ultra-high-end. Ultra-high-end sales are significantly higher than any other period within the last 10 years resulting in a significant contribution to annual dollar volume. Through May 31, 2022, the ultra-high-end of the market contributed $140 million in total sales compared to just $27 million at this time in 2021 and $48 million in 2020. The high-end ($5M-$10M) also continued at an impressive pace with $111 million year-to-date volume, down from 2021 but well above any other previous period. As we move into a high-interest-rate/high-inflation environment, it will be interesting to see whether these high-end transactions continue at such an impressive pace.

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

4

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

MEDIAN SALE PRICE & DOM

MAY 22

MEDIAN SALE SURGED, MARKETING TIME DIMINISHED

•

After two years of record property sales, it should come as no surprise that property values continue to be on the rise. As of May 31, 2022, the median home sale value was $3.1 million, 32 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 20212022, and within the last few years without significant alteration, the figures are substantially lower and reflective of a more moderate appreciation range around five percent. That said, there are a handful of new construction properties that saw appreciation rates higher than 30 percent so market-wide appreciation could be difficult to pinpoint as property attributes (like newer construction homes) are driving certain property values materially higher than others.

•

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 improve, although that may begin to change with recent interest rate activity. As of May 31, 2022, the average days on market for single-family homes dropped to a record low of 108 days. This compares to 166 days one year ago and 195 days for the five-year average. In reality, many properties coming to the market are still transacting far more quickly than this average. We are also now seeing some properties linger on the market a little longer than we saw just a few months ago so average marketing times vary by property pricing, location and amenities.

The average marketing time varies from three months for homes priced less than $1 million to over 12 months for homes sold between $9 million and $10 million, for example.

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

5

NANTUCKET REAL ESTATE Market Insights

BY JEN ALLEN

PROPERTY INVENTORY & PRICE REDUCTIONS

MAY 22

PRICE REDUCTIONS INCREASED, INVENTORY LIMITED

•

There is a natural correlation in the level of property inventory to Nantucket’s peak season and although we are beginning to see a steady increase in inventory, levels remain well below historic averages. As of May 31, 2022, there were 115 properties (residential, land & commercial) listed for sale and the total months’ supply (how long it would take to sell all listings based on trailing 12-month sales) measured two and a half months. As compared to last year, the number of listed properties is lower for nearly every million-dollar pricing segment but held steady for the $5 million to $6 million and above $10 million price ranges.

•

Interestingly, despite the strength in all the market metrics, there was a notable increase in price reduction activity in May. Through the 31 days ending May 31, 2022, there were price adjustments to 19 properties, a 72 percent increase from the same period last year. The average price discount from the original list price was approximately 9 percent. The pricing adjustments may stem from overinflated pricing and/or a seller’s desire to get ahead of any potential slowdown in the market due to the rise in mortgage rates. The price adjustments were across nearly every price point and were not concentrated to any particular segment. We will continue to monitor this activity moving forward to see if we can glean any notable trends.

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

6