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It's hard to believe that January has come and gone. While it is a sleepy time of year on Nantucket there have already been fifteen property transfers ranging from $325,000 to $20,000,000. Thankfully, Great Point Properties brokered the two highest real estate sales of the month. And there are 39 pending transactions reported in LINK, Nantucket's multiple listing service. The sales activity suggests that we are off to a good start. And the Nantucket vacation market is reported by Nantucket homeowners and real estate agents alike as robust for July and August vacation rental bookings. The big question is how the balance of the year will shape up. I'm going to make a prediction on Nantucket Real Estate for the year but I will start with looking to the past.

2008 was a memorable year. That was the year that credit default swaps, AIG, subprime mortgages, Lehman Brothers and Bernie Madoff became front page stories. Fear was in endless supply and the doubt of our economic future was on everyone's minds.  To many, 2008 marked the beginning of the end of a long appreciating market. Nantucket real estate sales tumbled 33% in dollar volume compared to 2007; this was a huge setback. But what is more interesting is 2007 contracted 7% in dollar volume compared to 2006 AND the 2006 dollar volume was hammered 26% compared to 2005. In short, Nantucket real estate sales peaked in 2005 at 1.2 billion dollars and by 2008 the dollar volume slumped to 560 million dollars. My point is that the real estate recession was in full swing by 2006 and 2008 marked the definitive shift in buyer's and seller's outlook. 2009 was an accelerated continuation of the already familiar trend. Nantucket house and land sales for the year rang in at an anemic 429 million dollars. Since the lows of 2009, the healing economy, recovering consumer sentiment and amazing buying opportunity in terms of affordability and abundant inventories have resulted in a notable rise in volume. 2012 ended with about 805 million in sales. While we are no where near peak activity of 2005 it seems like 2009 is a distant memory.

There are two factors on which the health of the Nantucket real estate market rests. The first is the health of the economy and Wall Street. The fact that the Dow Jones is hovering at near all time highs and that interest rates remain historically low bodes well. The second is the health of our island. Nantucket is amazing and unique. Our beaches, harbors, town, architecture and commitment to open lands make this island one of the best in the world and I don't think that will change.

With Nantucket real estate prices stable after many years of eroding values, low interest rates, banks lending, improving economic growth and buyer confidence mending the 2013 market should shape up to be a continuation of 2012. Here are my 2013 predictions:

* By July 1, 2013 there will be 500 properties listed for sale on Nantucket (land and houses), compared to recent years this is a low inventory.
* The Cliff and areas West of Town will enjoy significant activity and price appreciation.
* Inventory for newer and updated homes across all price categories will reach a low.
* Land inventory will continue to shrink.
* Home inventories will shrink to a level that will mark the end of this historic buyer's market.
* Year end sales will tally just under 800 million dollars on Nantucket.

Let's check in on January to see how my predictions shake out. One thing is for certain, Nantucket remains an incredibly special destination.