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A U T U M N Summer on Nantucket was surely different this year and, for the most part, was marked by cautious and responsible behavior on the part of locals and visitors alike which kept the number of COVID-19 cases to a minimum. After Labor Day, the island usually slows down quite noticeably, but this has not been the case this year. Many visitors who were unable to come in late spring and early summer had moved their rentals to the fall. In addition, a lot of people have decided to either use their homes through the fall or to rent for longer periods of time until in-person school begins again in their community. All of which is good for the island economy after a shaky start to the season, especially for the restaurants which are still able to have outside dining. In a “normal” year, it is not unusual for the Nantucket real estate market to exceed $1 billion in sales by the end of December. It happened in 2017, 2018 and 2019. This year it happened before the end of September. We are on track to have the best year ever with total sales dollars in excess of $1.5 billion. The market is largely being driven by the phenomenon we call, “heading for the hills”, and it is not unique to Nantucket. People are buying quickly in places that are perceived to be safe and that offer the opportunity to enjoy outdoor spaces. The market acceleration this year was not predictable and surprised even the most seasoned brokers. The average selling price of a property on Nantucket is $2,868,000, an increase of 32% over last year. The average selling price of a residential property is $3,307,000 (+33%) and the median is $2,450,000 (+47%). Vacant land is selling, on average, for $1,558,000 (+7%) and the median lot is now $950,000 (-3%). Continued on Page 2...
M A R K E T
N E W S
The time on market is now down to 9 months (it was 10 months at the end of 2019), and we expect this number to come down even more during the fourth quarter. Properties are selling for an average of 97% of list price at the time of sale, compared to 89% in 2019. This is reflective of the fact that so many properties are generating multiple offers, some of which are higher than the list price. It also means that new listings are moving very quickly. Properties are now selling for, on average, 128% of the assessed value. There have been 359 sales on Nantucket through Q3 this year. Last year the total number of sales was 472 with the majority of closings occurring in Q4. Inventory is low right now with only 330 listings. Of these, 253 are residential properties, 57 are vacant land and 20 are commercial properties. The one slow sector has been the sale of commercial properties which is likely due to concern about the economy going forward. However, we are starting to see some good opportunities in commercial real estate for the savvy buyer. It has been our experience that some buyers, perhaps due to the pandemic, have accelerated their plans to purchase on Nantucket. A number of listings that have been on the market for a year or longer are now under contract as the market has risen to meet their prices. The challenging side of this market activity is that it makes it even more difficult for the year-round working community to secure housing, whether to rent or own. We are often asked how long this market will continue and the only thing we can say with certainty is that it will change at some point in the future. There are many variables at play right now, among them: the upcoming presidential election, a vaccine or cure for coronavirus and the performance of the financial markets.
$3,000,000
$2,500,000
Nantucket Real Estate As of 9.30.2020
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Median Lot
$845,000
$970,000
$750,000
$688,000
$730,000
$668,000
$800,000
$660,000
$920,000
$975,000
$950,000
Average Lot
$1,095,000
$1,769,000
$1,483,000
$1,258,000
$1,130,000
$965,000
$1,027,000
$811,000
$1,756,000
$1,453,000
$1,558,000
Median Home
$1,100,000
$1,013,000
$1,050,000
$999,000
$1,400,000
$1,525,000
$1,525,000
$1,600,000
$1,750,000
$1,670,000
$2,450,000
Average Home
$1,970,000
$1,528,000
$1,666,000
$1,726,000
$2,124,000
$2,133,000
$2,276,000
$2,373,000
$2,615,000
$2,481,000
$3,307,000
Page 2
2020 Nantucket Sales by Price Range (in 000's as of Q3) 120
97
100
80 71 59
60
42 40
35 21
20
12 7
0 Under $500K
$500-$1,000
$1,000-$2,000
$2,000-$3,000
$3,000-$4,000
$4,000-$6,000
$6,000-$10,000
Over $10,000
Alert: Chemicals Found in Some Wells During the summer it was discovered that some private wells located near the Nantucket Airport had been contaminated with a chemical compound called PFAS (polyfluoroalkyl substances). These chemicals are used in flame retardant foam for fire fighting and are potentially carginogenic. The Nantucket Fire Department, until recently, did test drills using the foam at the airport. The product had been represented as safe by the manufacturer and was required to be used by the federal government. The airport has contracted with Weston Solutions, an environmental company from Pennsylvania and has been testing wells at the airport and neighboring properties. Areas that may have been impacted include neighborhoods to the west of the airport on Monohansett Road and Skyline Drive and residences located south of the airport, due to flow of groundwater. The airport is working closely with the Massachusetts Department of Environmental Protection and is abiding by the current regulations that have been set forth. A wealth of information is available on the subject - start at the Town website: https://www.ack-pfas.com/
Nantucket: COVID-19 Update Nantucket had the lowest number of COVID cases all summer (only 63 cases and 1 death) of any county in the state. Then came September - there have been two recent spikes in positive cases (88 since September 9th) due largely to people getting relaxed about following the safety requirements. Very sadly there have been 2 more deaths in the past week. Hospital and Town officials were able to effectively contact trace the new cases and determined that the spread was largely amongst people who work in the trades and those who had gathered at a church event. Even though we are 8 months into the pandemic, It is clear that we need to be ever more vigilant to prevent additional community spread. Nantucket is now classified as a hot spot by the state, and if the numbers continue to trend in the wrong direction we will be facing a roll back of some of the freedoms we enjoyed this summer. This week the Board of Health instituted Emergency Order #13 tightening safety precautions by requiring face coverings whenever outside and limiting gatherings, inside and out, to less than 10 people. Please remember to wear a mask, practice physical separation, wash your hands frequently and stay at home and contact your health service provider if you feel ill. The Select Board recently made the decision not to hold the Christmas Stroll because of the large crowds that it draws. For more information: Nantucket Cottage Hospital (https://nantuckethospital.org/coronavirus-news-and-information/) or the Town (As of October 7, 2020) of Nantucket (https://nantucket-ma.gov/1657/Covid-19). Page 3
TIPS FOR GETTING YOUR OFFER ACCEPTED Our current market is on fire and properties are moving. If you are in the market to buy, here are some tips to help get your offer accepted: Pay cash! Sellers love strong cash offers. Do not make a low offer, it will be ignored in a seller's market. If you are financing, include a mortgage pre-approval letter from your bank. Refrain from asking for personal items or the furnishings if the property is not offered furnished. Keep the contingencies to a minimum; shorten the time for inspections. Make your offer over the asking price or include an escalation clause (if there are multiple bids). Include a large deposit with your offer to get the seller's attention. Find out the ideal closing date for the seller and agree to it or offer to rent them the house back if it helps them out. Include a short note to the sellers to connect with them, tell them about yourself and why the property appeals to you. Finally, make sure your offer is complete with all required disclosures and has been proofed for any typos or mistakes.
Defer no More!! It is common for people to live in the same home for a decade or more these days. Things that were in good shape when you moved in might now need to be upgraded or replaced. The most common exterior items are roofs, decks, trim, gutters and down spouts, windows and doors, sidewall shingles and painting. In the mechanical department it is important to stay on top of servicing or replacing the heating and air conditioning systems, the hot water heater, and the appliances. It is also important to make sure your smoke and CO detectors are in compliance with current regulations. Another common issue is shrubs, trees and vines that might have seemed perfect for the space when planted but are now taking over the house. This can cause serious damage and block light. When listing a property for sale it is important to try to be objective and view the property as potential buyers will. This means taking a step back and making an honest assessment of what needs to be done. It is a good idea to have a home inspection by a professional, not your nephew unless he is licensed, prior to listing. This will objectively inform you of the reality of what a buyer will find out and what needs to be done. We always recommend having the structures as ship shape as possible when preparing to list for sale, and it usually costs less to do the work than to make concessions in a future negotiation. The cost of deferred maintenance is higher than dealing with issues as they arise. Waiting for components or buildings to prove their antiquity and inefficacy will always be more expensive than getting out in front of things and keeping everything up to date. We have many helpful resources available if you need advice – please contact your broker for more info!
Nantucket Harbor Web Cam Back in Action We are very pleased to report that our web cam atop the roof at the Nantucket Historical Association’s Whaling Museum has been fixed. It was taken out by a lightning strike last spring during a storm! It is a great resource for checking out Steamboat Wharf and the inner Nantucket Harbor. It can be found at https://nha.org/nantucket-harbor-webcam/ Page 4
TOWN SEEKING PROPERTIES TO BUY FOR NEIGHBORHOOD FIRST Through the Affordable Housing Trust, the Town of Nantucket is seeking to purchase properties in scattered locations for inclusion principally in a rental program for year round residents. These properties will count toward the Town’s state-mandated 10% affordability requirement (the Subsidized Housing Inventory or “SHI” list). The 2019 Annual Town Meeting authorized bonding up to $20 million in order to fund the program. The state requires that 10% of the housing units in any community meet affordable guidelines in order to stay in safe harbor from unfriendly 40B developments. Nantucket is currently at about 4%. Because Nantucket has a certified Housing Production Plan in place, we are allowed to stay in safe harbor by creating a certain number of units each year on our way to achieving the 10%. Nantucket is currently in safe harbor until June of 2021. A request for proposals has gone out from the Town requesting applications from property owners who would like to see their property go to meet this critical year-round community need. Responses are due on October 22, 2020. For more information please see: https://www.nantucket-ma.gov/184/Affordable-Housing-Trust
NOTES All of the property listings on Nantucket can be found on LINKNantucket, the multiple listing service for the Nantucket Association of Real Estate Brokers. If you would like to have direct and complimentary access, please contact your broker who will get you signed up. LINKNantucket has also recently partnered with Realtor.com to feed all of the Nantucket listing information to their portal. Check it out! According to the state of Massachusetts, there are approximately 2,000 rental homes on Nantucket registered with the state. Some of these homes rent for the entire season and some may rent for only 3 weeks in total. ACK Now, a newly organized group of summer and year-round residents, is seeking to further regulate and limit short term rentals. They believe that a large number of homes on-island are owned by corporate interests who are running the homes as businesses. In our experience, the vast majority of short term rental properties are owned by individuals who rent their properties out periodically in order to generate some income to help defray the high cost of owning on Nantucket. ACK Now also believes that these corporate interests are buying up “housing that would otherwise be used by yearround people”. This is not entirely accurate. Here is a link to their web site: https://www.acknow.org/str/ If your property has an irrigation system that is fed by Town or ‘Sconset water rather than a well, you should investigate getting a deduct meter from Wannacomet Water Company. The deduct meter will lower your water bill by segregating out the water used for irrigation. The initial cost for the meter is $650, and it requires a licensed plumber for the installation. Please contact Wannacomet Water Company for more information at 508.228.0022 or at: http://www.wannacomet.org/ Page 5
Nantucket: Pace of Sales 2020 By Month 140 120 100 80 60 40 20 0
January
February
March
April
May
June
July
August
September
No. Properties OP
10
13
5
2
8
45
37
75
59
No. Properties PS
25
13
17
4
18
53
63
71
64
No Properties Sold
37
21
17
21
16
15
61
46
115
New Listings
22
30
27
23
63
82
126
103
81
Thank You to Owners and Tenants The 2020 season has certainly been an interesting one. The pandemic and how it would affect travel and vacation activities contributed to a lot of uncertainty heading into the summer season. As you can imagine, we had more cancellations than we would expect in a normal rental season. However, as the weather started to warm up and the country started to open up, it seemed as though everyone wanted to escape to Nantucket! Most cancelled weeks were rebooked and last minute demand was higher than usual through the summer. We also saw lots of interest in extending existing leases and bookings into the fall. While the season was certainly a challenge, it was one we were able to meet with the understanding and flexibility of homeowners and tenants alike. Homeowners shifted leases to 2021 or allowed full or partial refunds to tenants who were at high risk or particularly concerned about travel. Tenants adapted to the changes necessitated by the pandemic‌masks in public, patio dining and lines to get into your favorite retail establishment. Visitors to the island seemed especially grateful to be here this year, and no one seemed to mind the inconveniences. The relationship between Atlantic East and our rental homeowners and tenants is a partnership we value every year, but it has been especially rewarding to work with you all during these challenging times.
Atlantic East N A N T U C K E T R E A L E S TAT E Penny Dey, GRI, ABRM and Heidi Drew, ABR, RSPS, SRS, Broker/Owners Ken Beaugrand; Linda Bellevue, GRI, CBR; Peter DuPont; Alison K. Forsgren, ePro, NAR Green, SRES Mary D. Malavase, ABR, RSPS, TRC, SFR, SRS; Jane Miller, ABR, RSPS; Erikka Perkins; Meg Ruley, ABR, RSPS; Lisa Sherburne, ABR, RSPS; Melinda Vallett; Christine Whelden, ABR; Geri Walker, Tanya Babaitsava We believe in doing one thing and in doing it well! 82 Easton Street Nantucket MA 02554 508.228.7707 NantucketRealEstate.com
Volume XVI, Issue 3, Summer 2020