The year 2000 represented a peak in the Nantucket real estate market. After ten years of sales growth and price appreciation Nantucket real estate sales peaked at $628 million. For the next two and a half years, sales abated. The island market was affected by the dot.com bust and then 9/11 and the resulting recession. Yet, by mid-summer 2003, the market was roaring back to life. The next two plus years saw unprecedented growth. By the end of 2005 sales topped $1.2 billion, a 167% increase from the 2002 low. As the chart below shows, the years highlighted in blue represent the heart of the Nantucket real estate boom. In 2006 the decline began. By 2009, the Nantucket real estate market had hit bottom. Sales had contracted to $429 million, 64% below the 2005 peak and at a level not seen since 1998.
2010 AND 2011
From that desultory point in 2009 the Nantucket real estate market rebounded. The turn around began in the fall of 2009. As 2010 closed, Nantucket real estate sales were up 49% in dollar volume on a 41% increase in transaction over 2009. On the surface 2011 sales declined, with an 18% reduction in dollar volume, on a slight decrease in total transactions. Breaking down the numbers by price point showed that the discrepancy in those figures was attributable to the real estate sales market of $4 million and over. In 2011 there were 310 sales under $4 million, which made up 95% of all Nantucket real estate transactions. Those sales were level with 2010.
In the over $4 million range, there was a decrease from 30 transactions in 2010 to 18 in 2011. That represented a $129 million decline in dollar volume, accounting for the entire decrease in dollar volume for the year. For 95% of the Nantucket real estate market, dollar volume was up slightly. So in many ways, 2011 was a stable year for the real estate market. Two years removed from the depths of 2009, the island real estate market was continuing to solidify.
THE FIRST 6 MONTHS OF 2012
2012 has proven to be an excellent year so far. Nantucket real estate sales transactions are up from 146 to 176 and dollar volume has moved apace up 26% to $270 million. Looking at the various price points, Nantucket real estate sales, at most levels, are ahead of last year.
The only small changes are one less transaction in the $4 million to $6 million segment and there have been no sales above $10 million. As we are just at the beginning of the selling season, we anticipate those price points will move ahead of 2011. This good news points to a very healthy island real estate market. Since 2009, we have seen positive Nantucket real estate sales trends. Unless there is a significant macro-economic event to negatively impact the national economy, Great Point Properties would expect further solidification of the Nantucket real estate market. With historically low interest rates, this summer still represents a great time to purchase real estate.