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With May sales in the books, the Nantucket real estate market is doing very well. Except for a slight downturn in dollar volume for lots sales, every segment of the market is further ahead of 2011’s pace. Home sales, a significant part of the overall market, are well ahead of last year.  Dollar volume is 42% ahead and transaction volume is up 26%.

Analyzing the market by price point shows that every segment except the $3,000,000 to $4,000,000 price range is well ahead of 2011.  And even that price point is off an insignificant amount.  An interesting point is the high end of the market is rebounding after an off year in 2011.  Last year, Nantucket Real Estate sales in the $4,000,000 to $10,000,000 segment declined 32% in transactions and 77% in total dollar volume.  For 2012 that trend has been reversed with corresponding 200% and 268% increases.

Inventories and price reductions continue to decline, with the heightened sales activity.  The only cloud that looms on our horizon is 3,500 miles to the east of Sconset.  Europe once again is shaking the markets as a whole.

But the threat of economic headwinds is also creating historically low interest rates.  10-year treasury bonds are at lows not seen since World War II.  It is possible to borrow money at 30 year fixed rates of 4%.  Adjustable rates are even lower.  Undoubtedly this factor is responsible for some of the market activity.  Coupled with lower prices, buyers are seeing the twin benefits of once-in-a-lifetime low interest rates and pricing that has yet to rebound from the 2008/2009 bear market.  Assuming that there is a reasonable solution to the European debt crisis and our economy remains above water, the Nantucket real estate market will remain in this healthy state.  If that occurs sellers will eventually gain some advantage and prices will continue to firm.  Great Point Properties has for some time been bullish on the island market.  We see no reason to change that tune now.