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SALES OBSERVATIONS

Posted: September 24, 2013

As the Island's summer season winds down several market trends have become apparent.

The first notable market movement is the majority of sales of single family homes occurred under $2,000,000. Year to date there have been 174 home sales. 136 (or 78%) of transfers sold under $2,000,000. Additionally, there are 48 pending sales under $2,000,000. This popular price range is seeing tightening inventory pressures based on continued demand. There are currently 170 listings available in this range which is less than a one-year supply when you consider that the market has absorbed 184 houses (sold and pending) year to date. The driving factor behind this activity is the continuation of historically low interest rates and home values that are still below the heights of 2006. This price range will remain active if new and appropriately priced inventory comes to market and if interest rates remain low.

The second trend is the activity of land sales. Land sales activity has been spurred by speculative builders and end-users, who are motivated to build to their own design. The land inventory is shrinking to an all time low. There are currently 77 parcels for sale. That seems like a large selection but when you consider there have been 53 land sales plus an additional 10 pending land sales year-to-date it is clear that the inventory is absorbing at a swift rate. The island's culture of land conservation and success of the Nantucket Land Bank and Conservation Foundation solidifies the notion that land is scarce and the supply will continue to dwindle. Currently over 50% of the island is under conservation.

The third trend is the activity for single-family homes in the Cliff area compared with activity of single-family homes in Polpis. Both locations are considered exceptional. The Cliff provides easy access to Town and North Shore beaches and Polpis has unmatched conservation lands and unspoiled vistas over the moors. But, the activity on the Cliff has been notably stronger. There are currently 29 available single-family homes on the Cliff. Year-to-date there have been 12 transfers and 5 pending sales. In Polpis there are currently 11 available homes and year-to-date there have been four home sales. There are no pending sales. The trend of greater activity in the Cliff area is likely due to buyer's desire to have space and privacy, but also wanting the convenience of close proximity to town. However, as Polpis becomes a more obvious value (combined with its stunning attributes) it is probable that the market will shift.

Our last observation is focused on the high-end market as defined by sales $5,000,000 or more. This is the segment of the market that spurs cocktail conversation and is probably the more misunderstood segment of the market. Popular opinion is the market is active and Nantucket reigns as a high-end market. But when you look at the numbers it appears that the high-end is sluggish. There have been 8 sales and there are 8 pending transactions. That's not bad given there is not a substantial population who can pay $5,000,000 for seasonal home. What is particularly interesting is there are 65 available properties priced at $5,000,000 or more. That would suggest that aspirational sellers will have to be patient.

GPP