7/29/2019 Real Estate Sales Activity Under $1M On Nantucket Island - July 2013

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Mortgagerates,whichatthebeginningofMaystoodat3.59%foraconventional30-yearfixed-rateloan,jumpedto4.68%duringthefirsttwoweeksofJuly(accordingtotheMortgageBankersAssociation);theirhighestlevelintwoyears.Whilestillrelatively low,these increased rates will likely begin to impact mortgage-dependent buyer decisions.Potentialbuyersalreadyonafairlytightbudgetarediscoveringthepurchasepricetheythought they could afford has already dropped and will be further reduced with eachsubsequentraiseinrates.Sellers,hopingthehousingrecoverythatbeganoverayearagowould lead tohigher selling prices are discovering that this isnot necessarily the case.Instead,thepressuretobeproperlypricedismounting.On Nantucket, the market sharefor residential properties selling

for less than $1M has steadilyincreased over the last 5 years.Prior to 2010, the last year thissegment of themarket exceededthe 40% level for residentialpropertysaleswas in2005.So itreally is an anomaly forresidential properties selling forless than $1M to now make upmore than 60% of year-to-dateresidential sales and 51.3% of

the residential sales in the past12months.While this increase in marketshare could easily be explainedhad total residential salesdeclinedandthenumberofsalesunder $1M remained about thesame, this is not the case.Instead,therehasbeenasteadyincrease in the number of

residentialpropertiessoldbelowthe$1Mmarksince2008andinthreeofthepastfiveyearstotalresidential sales were actuallyhigherthantheyearbefore.Notsurprisingly,year-to-dateresultsareevenmoredramatic,withpropertiessellingforlessthan$1Msurpassingthenumberofpropertiessellingformorethan$1Mforthefirsttimesince2004.

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7/29/2019 Real Estate Sales Activity Under $1M On Nantucket Island - July 2013

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So what led to this increase in activity below the $1M mark on Nantucket? While anincrease in the availability of residential properties below the $1M mark definitelycontributedtothisphenomenon(65%ofthebelow$1MYTDsaleswereunder$750K),themajormotivatorwashistoricallylowinterestrates.Duringthispastyear,potentialbuyers

foundthemselvesintheperfectstorm;higherinventorylevels,lowinterestrates,reducedprices,motivatedsellersandeagerlenders(notcompromisingoncreditworthiness)withmoneytolend.Withonly87residentialpropertiescurrentlyon-marketbelowthe$1Mlevel(only51ofwhichhavebeenon-marketlessthan4months),inventoryisrelativelylowcomparedtothe178propertiessoldwithinthelast12monthsbelowthispricepoint.Forthosewantingtostayunderthe$1Mpricetag,itisstillagoodtimetotakeaseriouslookinterestratesmaynotbedroppinganytimesoonbuttheyarestillrelativelylow.Forthosetryingtosellapropertybelowthispricepointnowmaybeagoodtimetore-

evaluateyourpricingstrategy,particularlyifyouhavebeenon-marketformorethansixmonths(andespeciallyforthe13propertieson-marketformorethanayear).Salescontinuetobebriskinthispricerangewithnewinventorycreatinggreatercompetitionfor

buyerattention.Withhigherratesonthehorizon,pricingwillmattereven

moreforthosewantingtobuyorsellthisseason.