Windwalker's Window to the Island - A Nantucket Real Estate Blog

A Friday Winter Morning on Main Street

With the recently released Case-Schiller index revealing a slide in national home prices during October, there are renewed worries about the strength of the housing market.   Despite historically low interest rates and tax incentives, there may not be enough ammunition to sustain the turnaround according to some economists who are now predicting that we may in fact be on the path of a double dip recovery.  For buyers, it is still difficult to obtain mortgage financing and many consumers remain concerned about job security.  For sellers, it is estimated that a quarter of mortgage holders own more on the balance of their loan that the current market value of their property.  This creates substantial friction in the wheel of real estate supply and demand.

Though it’s too early to tell just how Nantucket will fare should the economy deteriorate further, high-end luxury markets do have one very positive attribute:  the majority of transactions are not contingent on financing.  While Nantucket property owners may still be gobbling up losses upon sale, many are not beholden to mortgage repayments.  Sales of Nantucket vacation homes will often progress more quickly without bank negotiation.  This is not to say that Nantucket, or any high-end market, will be immune from any worsening of the economy but that buyers and sellers may be more quick to act and react.  This hopefully portends a quicker recovery.  The coming months will reveal more about the future of the Nantucket real estate market.  Stay tuned…

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