N
A
N
T
U
C
K
E
T
N A N T U C K E T
S P R I N G ! Longer days, forsythia and daffodils in bloom and the Nantucket high school sailing team out on the harbor are all signs that we can shut the door on winter. Another sure sign of spring is the number of property listings coming on the market. Some are properties that were taken off the market for the winter months; others are new to the market. Rentals continue to book with August being the highest in-demand month, followed by July and then June and September. It seems that many vacationers are waiting until the last minute to make plans this year. We love this time of the year - Mary Malavase, one of our brokers, is the local daffodil expert and she assures us that there will still be plenty of the happy flowers come Daffodil Weekend on April 28th. The island is waking up again and it is something to behold. We spent some time off-season assessing how we can do our jobs better and are pleased to introduce you to our new web site, NantucketRealEstate.com, going live the first week of May. Some of the new features include Google and GIS maps, larger images and easier user interfaces. The real estate market stumbled a bit in the first quarter of 2017, due largely to a number of listings and sales in the lower price ranges. Of the 104 sales to date this year, 35% of them were under $1 million and only 3 sales were over $5 million. This is not an unusual pattern for this time of the year and it resulted in the total sales dollars being down 8% compared to 2016 at the same time. The total number of sales was down 14% compared to the same quarter last year. However, pending sales activity continues to be robust with 47 properties under contract, ranging from a townhouse unit in Madaket (listed for $299,000) to a waterfront compound in Sconset (listed for $8.5 million). There are currently 287 listings actively on the market, with an average list price of just over $4 million, a median list price of $2.6 million and 325 average days on the market (higher than the 9 months it took a property to sell in 2016). There are some indicators that sellers have gotten ahead of the market in their pricing. This translates into more frequent price reductions and longer time on the market, often resulting in the property selling for less than had the property been priced correctly initially. Continued on Page 2....
M A R K E T ( c o n t i n u e d
N E W S f r o m
P . 1 )
The number of properties on the market will continue to rise as we get closer to summer. Last June there were nearly 500 listings by the end of June. It is no surprise that the majority of sales on Nantucket are of residential property. In the past decade commercial sales have averaged only 7 per year on the whole island. The demand for vacant land is beginning to outweigh the supply as many buyers prefer building anew to renovating. The number of building permits for single family homes is averaging around 120 per year. In the first 3 months of 2017 the Town has already issued 65 building permits for new homes. The average sale on Nantucket is $1,776,000; the average home sale price is $2,143,000 and the average lot sale price is $670,000. Commercial properties are selling, on average, for $2,200,000. Foreclosures continue to be less than 1% of market transactions. Properties are currently selling for 89% of list price and 112% of assessed value. The least expensive property (not restricted for affordability) to sell on Nantucket this year was a 1 bedroom/1 bath condominium unit at 1 Freedom Square, selling for $271,900. The highest price paid was $14 million for 36 Shawkemo Road, a harborfront property with 7.8 acres and nearly 7,000 s.f. of building. The property right smack in the middle of sales to date was 4 Delaney Road, located in the Cliff area, a single family house on .14 acre, listed at $1.4 million and selling for $1.2 million. The property was on the market for only 2 days before going under contract. The economy, although expanding, is growing slowly. The Fed has cautiously raised the benchmark interest rates twice in the past four months; it is anticipated that there will be two more rate increases this year. Employers are hiring (unemployment is down), consumers are spending and business are starting to invest more money into their operations. The stock market continues its heady climb since the fall. Consumer confidence, especially in discretionary markets such as Nantucket, will be ever more important as we progress through this year.
Nantucket Real Estate Average Selling Price All Properties (000's) As of 3.31.17 2500
2000
1500
1000
500
0 Average Selling Price (000's)
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 475
533
666
970
940
862
1001 1373 1801 1931 2135 2316 1834 1907 1532 1645 1597 1787 1717 1821 1776
Page 2
N a n tu c k e t: 1 s t Q C o m p a ris o n S a le s D o lla rs
$ 3 0 0 ,0 0 0
$ 2 5 0 ,0 0 0
$ 2 0 0 ,0 0 0
$ 1 5 0 ,0 0 0
$ 1 0 0 ,0 0 0
$ 5 0 ,0 0 0
$0
2001
D o lla rs 1 s t Q . (0 0 0 's ) $ 1 4 2 ,5 1 5
2002
2003
$ 7 8 ,9 2 7
$ 7 3 ,5 5 7
2004
2005
2006
2007
2008
$ 1 5 2 ,1 5 8 $ 2 5 1 ,2 3 9 $ 2 2 9 ,7 3 0 $ 1 7 1 ,9 0 2 $ 1 5 0 ,4 6 8
2009
2010
2011
2012
2013
$ 5 3 ,3 2 2
$ 1 0 8 ,0 9 5
$ 7 3 ,8 7 4
$ 9 6 ,1 3 2
$ 7 4 ,3 3 4
2014
2015
2016
2017
$ 1 7 4 ,0 7 3 $ 1 5 6 ,1 7 6 $ 1 9 6 ,2 7 1 $ 1 8 4 ,7 1 9
TOWN MEETING HIGHLIGHTS We are fortunate to be able to engage in the most pure form of democracy by having an annual town meeting. Approximately 500 people attended (out of over 9,000 registered voters). Among the most hotly debated articles were those related to the relocation and funding for a new Our Island Home, Nantucket’s convalescent home. The existing building, located in Town overlooking the harbor, is in need of major repairs. It is one of only two in the Commonwealth that is subsidized by the community (the other is in Taunton), the cost of which is approximately $3 million per year. The general feeling of the voters was that the location of OIH, with views of the harbor, matters to our community and that it should stay in the current location rather than being moved to the Miacomet area. The vote on the $30 million funding, which needed two thirds to pass, failed 264-253. The fate of OIH will now be studied further by the various work groups and Town leadership and brought back to a future town meeting. A unanimous vote was taken to get a sense of the meeting regarding a ban on small mesh fishing gear. Islanders feel that the ban should extend to include up to 3 miles off of Nantucket as it does in 90% of the rest of the coastal communities in Massachusetts. With no discussion at all the annual operating budget of over $81 million passed. The school system represents over $27 million of the total. The Planning Department brought forward numerous articles to change zoning, most of which passed. Less successful were some attempts by individual property owners to re- zone their properties in order to subdivide. A zoning by law amendment passed that reduces the size and limits the location of swimming pools in the village of Madaket. An article passed that eliminates helicopter landings except at the airport and the hospital, or in an emergency.
Page 3
MORE SEWER NEWS! If you own property in the Nantucket Harbor Shimmo/Plus areas you should be aware by now of plans to bring municipal sewer to your area for continued environmental protection of Nantucket Harbor. Construction work is expected to begin in September 2017. Streets in the Harbor Shimmo area that are effected are: Berkeley Avenue, Boston Avenue, Brewster Road, Cathcart Road, Gardner Road, Harbor View Drive, Juniper Hill, Kelley Road, Middle Valley Road, Moors End Lane, North Road, Pippens Way, Polpis Road, Shawkemo Road, Shimmo Pond Road and South Valley Road. Streets in the Plus area are: Bayberry Lane, Dooley Court, Friendship Lane, Green Meadows Drive, Hussey Farm Road, Maclean Lane, Marsh Hawk Lane, Meadowview Drive, Pinkham Circle, Pond Road, Rugged Road, Somerset Road, Tashama Lane, Ticcoma Way and Wamasquid Place. The project will serve 360 properties that are currently on septic systems, many of them outdated and/or failing. At the Town Meeting in 2016 it was voted to pay entirely for the cost of extending the sewer with the tax base. Individual property owners will be responsible for connecting to Town sewer within 2 years of sewer becoming available at their property. The cost to connect may include the following costs: engineering and survey work, excavation and piping, electrical work, installation of a grinder pump and disposition of the old septic system. The Town is offering sewer extension grinder pumps for $500 to owners who have recently installed an Innovative/Alternative septic system and $1,500 for homeowners who have a traditional septic system. The pumps normally cost between $3,500 and $5,000 and the Town will pick up the difference. For questions please contact the Town at: sewerproject@nantucket-ma.gov or call 508.228.7200 x7800.
T A X E S
O N
V A C A T I O N
R E N T A L S
Currently, there is no state or local tax on vacation rentals. However, there have been many movements over the years to tax the rental of private homes on Nantucket. One compelling reason against a room occupancy tax (similar to what is charged by commercial establishments) on rentals is that they are not regulated by the Town. Hotels and inns have to comply with specific health and safety regulations and are licensed by the Town. Because they are commercial properties they have to meet certain standards and undergo annual inspections. With the rise in the use of on line booking sites, such as Air bnb, many cities and towns are eyeing the lost potential tax revenue. This is an issue that is not going away and we will do our best to keep you informed going forward.
Nantucket: Total Annual Number of Sales As of 3.31.17 900
800
700
600
500
400
300
200
100
0 Total Number of Sales
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
522
613
776
659
475
399
248
237
364
384
546
506
566
514
534
104
Page 4
TAXES TAXES TAXES The Nantucket Board of Selectmen recently voted to keep the 20% residential exemption the same. The property tax exemption applies to Nantucket property owners who reside in their property on a year round basis. State law allows for a local exemption of up to 35%. The majority of selectmen felt it better to wait until the cost of the many capital projects currently underway start showing up on our tax bills to increase the exemption. Rental Income: If you own a second home and use it yourself you are permitted, under current IRS regulations, to rent the home out for up to 14 days in a calendar year without reporting the rental income. You are also permitted to write off mortgage interest you pay on up to $1.1 million of debt secured by your first and second homes and used to acquire or improve the properties ($1.1 million total). Check with your accountant for more information about your particular situation.
Buying a Home on Nantucket? Read This! Here are some helpful suggestions you should consider when buying a home on the island: 1. Cell Phone Service: Believe it or not the island has some areas with very weak signals. Double check your location if this is important for you. 2. Internet Service: There are some parts of the island that are not serviced by cable TV or internet. Be sure to ask about service for the property you are considering. 3. Land Bank Fee: There is an additional fee of 2% of the purchase price payable to the Nantucket Land Bank. Be aware and plan ahead for this. 4. Insurance: Since most homes are located within a mile of the ocean insurance rates are higher, and there will be additional charges if the property is in a flood zone. Also, second homeowners typically pay more for homeowner insurance because the home is not occupied full time. 5. HOA's: Ask about any homeowner's association fees, road maintenance fees or annual septic system inspection fees.
Nantucket: Home Prices As of 3.31.17
2500
2378
Avg Home ($OOO)
2276
2271
Median Home ($OOO)
2164
2124
2103 1945
2000
1970
1672
1666 1550
1500
2143
2133
1726
1528
1495
1525
1425
1525 1438
1400
1297 1187
1000
1150
1190 1100 1013
970
917
1050
999
775
500
0 2002
2003
2004
2005
2006
2007
2008
2009
Page 5
2010
2011
2012
2013
2014
2015
2016
2017
Nantucket: Sales as % of List Price and Assessed Value As of 3.31.17
160%
150%
140%
130%
120%
110%
100%
90%
80%
70%
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Avg Sale as % of List price
90%
90%
94%
93%
91%
93%
93%
90%
79%
82%
84%
88%
90%
91%
90%
89%
Avg Sale % of AV
121% 151%
130% 114%
99%
95%
106%
89%
81%
139% 141% 103% 112%
135% 135% 152%
Lowest Commission? Are you thinking of selling your home and considering listing with the office offering the “lowest commission�? Before you make your decision, do some homework and understand exactly what the office/agent will be doing to represent and sell your property. You don't necessarily want to list with the agent that negotiates down very quickly; they might not have the skills or experience to represent you properly during the selling process. A discount agent may be more interested in high volume than your best interests. Your Flag When an American flag becomes worn, faded, torn or soiled, it should be retired and replaced with a new flag. There are several ways to respectfully dispose of the American flag. The most common method is burning the torn or tattered flag in a special ceremony. If you are unable to commit to a special ceremony, the Nantucket American Legion Hall located in town at 21 Washington Street, has a special white depository station to the left of the building. They will honorably take care of your retired flag.
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, Principal Brokers 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, Rental Manager; Meg Ruley, ABR, RSPS Lisa Sherburne, ABR, RSPS; John F. Trudel III, SFR; Melinda Vallett; Christine Whelden, ABR; Geri Walker and Ani Mulcahy, Office Managers
We believe in doing one thing and in doing it well. 82 Easton Street Nantucket MA 02554 t: 508-228-7707
NantucketRealEstate.com Volume XIII, Issue 2, Spring 2017