Nantucket Real Estate Agent Blog

I was recently asked to answer a few questions of the state of the Nantucket Real Estate market for the July edition of the Nantucket Property Journal.  I thought these questions and answers about the current state of the Nantucket Real Estate market may be of interest for those of you following the blog and worth sharing to friends and family interested in the Nantucket Real Estate market.

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- Where is the market right now?

Nantucket has two markets, year round and vacation homes.  We are now transitioning from a very busy winter year round market into the summer season of vacation sales.  Prices in the year round market have fallen in the last few years and this has greatly increased the number of transactions in that market place in the past 10 months.  Recently we have seen a good number of new listing come to market positioned for the summer vacation market, pricing has adjusted from the highs and are now in line with current economic environment.

- There has been talk recently of signs pointing to a national recovery. What's your take on when we'll feel the full and lasting effects of any recovery on Nantucket?

Historically Nantucket has always been the last place to decline and the first place to recover from any economic national or global downturn and it appears this time won’t be any different.  Strong rental numbers have been posted, word is hotel reservations, enplanements and ferry reservations are all up as well.  Nantucket has been a building based economy for many years.  A visit to the building department today shows that there have been 20 new homes permitted and 104 renovations since Jan 1^st.   8 of these new home projects were just permitted in the month of May.  New home construction has fallen dramatically since 2005 when there were 212 new homes built, but renovations have been consistently over 300 since 2003 an indication to me that Nantucket is a very constrained market with limited new land available for construction and constant competition with conservation groups to acquire open space.  (The renovation number represent demo and new build). 

- What is the state of the rental market?

 YTD the rental market is very strong for the months of July and Aug.  Number of leases is up 30% across the board and dollar volume follows suit.  At this point it is very difficult to find quality inventory in all price points.  The strongest weeks of season are the first 3 weeks of Aug and the first two of July.  These numbers have been up consistently since before the 1^st of the year which is a strong sign of recovery that people are and were willing to commit to planning vacations far in advance.  The vacation sales market historically has followed the pattern set by the rental market.

- What kind of properties are selling now?

Throughout the winter season the year round market was very active, prices have fallen to a point that many buyers are qualifying for new mortgages and seeing value.  Over the last 12 months we have seen great strength in the top end of the market with 21 sales over $5 million and an avg. price of $10,312,405.   When this article is printed I expect historic trends to be true and the $2 to $4 million market so see significant increased activity.

- What neighborhood(s) do you think is/are undervalued now?

Surfside or Tom Nevers

What neighborhood(s) do you think best retain its/their value over time?

Any waterfront. Monomoy/Shimmo, The Cliff

- Are you seeing any movement in the sale of land, either up or down from previous years? 

Land sales are down and it is a scarcity/supply issue. The Nantucket Land bank, Conservation Foundation, and the Town of Nantucket control the majority of property on the island at this point.  Supply of quality lots has been on a rapid decline over the last 10 years and this is driving price up, this also drives pricing in home sales as well as more and more property is acquired by conservation.   In 1998 there were 269 lots sold with an avg. price of $302,000, 2005 there were 117 sales with an avg. price of $1,190,000 and in 2010 there were only 31 lots sold and the average price was $1,109,000.  Land on Nantucket has held its value well during this most recent economic cycle and will only continue to increase in value as we as and island and national economy recover from the most recent downturn.

As always if you have any questions about the Nantucket Real Estate market please contact me or post a message here.