OVERALL THE BEST START IN MANY YEARS
The most consistent and most startling trend of the first 4 months of 2104 is the significant increase in real estate sales transactions in the $1 million to $2 million and the $2 million to $4 million dollar segments. Sales in those 2 categories are well ahead of not only last year but are the strongest in five years. In addition, total sales transactions are the highest they have been in five years.
Taking a closer look at the broad $2 to $4 million dollar segment of transactions, all but 5 transactions were below $3 million. That translates to nearly 90% of all sales being below $3,000,000. Although the lower part of the high end market, starting at $4 million, is off to a solid start and equaling 2010’s totals, sales above $6 million are almost non-existent. The one sale recorded above $10 million was a commercial sale of the Nantucket Bank properties from Santander to Blue Hills Bank. That sale consisted of seven properties. When that sale is distributed among those individual properties the discrepancy in sales below and above $3 million is further widened.
THE LOWER END
As sales below $2 million, especially below $1 million, blossomed, inventory has consistently declined. Today there are only forty-five houses for sale priced below $1 million. A robust local economy and a healthy mortgage market has combined to greatly reduce the lower end of the housing market. In less than 24 months the buying opportunities created by the 2009 recession are gone. We foresee prices continuing to escalate to the point where a single family home selling under $1 million will disappear. As extreme as that may sound it could happen in a few years.
THE HIGHER END
Great Point Properties has been very active in handling sales over $10 million. Since 2010 we have participated in nine of the twenty-five sales above $10 million. Without a specific explanation, that market segment seems to have hit a “glass ceiling”. Possibly the overall mediocre economy, although selectively robust for the last few years, is having a dampening effect on the high-end sales. Discussions with our Christie’s International Real Estate family suggest that these trends are not isolated to Nantucket.
In addition, some other exclusive markets, such as the Hamptons and Palm Beach, have seen a significant influx of foreign buyers, a trend that Nantucket has yet to experience. These buyers have had a significant impact on pricing. Sales in Palm Beach, which is much more than a resort town, routinely see sales in excess of $25,000,000. On Nantucket there have been five residential sales over $20,000,000. Ever! As we have yet to see any significant influx of foreign buyers and the political climate still hampers the national economy as a whole, the high-end market has yet to experience the same growth as the lower end.