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N A N T U C K E T
W I N T E R It is hard to believe that it has been nearly two years since the governor of Massachusetts put us into COVID lock down. We have all had to learn to adapt, be flexible and roll with it as the pandemic metrics change. Although it is easy to complain that we are still masking and being vigilant, it helps to remember where we were two years ago and to be grateful for how far we have come. Nantucket is so fortunate to have had strong, decisive leadership from our Select Board, the Nantucket Cottage Hospital, and the Board of Health. Nantucket county is one of the most highly vaccinated in the state and, although we are in the midst of another surge, people are experiencing more mild cases. We have now been through two summers with the pandemic and are looking forward to smoother sailing ahead. There is no question that the real estate market on Nantucket has been driven by the pandemic. As is the case in many special places, people flocked to Nantucket and other communities where they felt safe. With the ability for many to work remotely, Nantucket has had a marked increase in the year-round population. This was more noticeable in 2020 than in 2021, likely because when schools started again many returned to their off-island homes. There were 825 property transfers in 2021 (+22% from 2020) and $2.336 billion dollars in sales (+23% from 2020). It used to be unusual if total sales broke $1 billion - not anymore. The average sale as a percentage of list price is 94%, the highest it has ever been. The average sales as a percentage of assessed value is 155%, up from 123% last year. The average price of a home on Nantucket is now $3,436,000 (+7%); the median home price is $2,588,000 (+6). The average lot price is now $1,437,000 (-6%); the median lot price is $1,100,000 (+13%). There have been a number of lower priced land sales in a dense development near the airport, impacting these numbers. Continued on Page 2...
MARKET NEWS (continued from page 1)
The biggest story right now in Nantucket real estate is the lack of inventory. Prior to the pandemic, the number of listings for sale reliably ranged between 350 and 450 properties. At the beginning of last summer, there were 120 properties for sale on-island (residential, vacant land and commercial). Right now, there are fewer than 50 properties actively listed for sale. We are keenly interested to see what happens in the spring market, if there is one! Although this is incredibly challenging for buyers, it is a wonderful market for those who wish to sell. The most active price sector in 2021 was $1-$2M with 243 sales, followed by $2-$3M with 143 sales, then $3-$4M (95), $500K-$1M (81), $4-$5M (48), $5-$7M (41), $7-10M (33) and over $10M (28). There were only 37 sales on Nantucket of $500,000 or less in 2021. One sector that is interesting is the sale of commercial properties. In the five years prior to 2021 there were an average of 15 commercial sales per year on Nantucket. In 2021 there were 41 totaling nearly $200 million. With the booming local economy, it is clear that there are more people seeking commercial space than there are listings. Concerns about inflation and its potential impact on the economy are starting to be evident. The CPI for December shows that inflation year over year is at 7%, a 40 year high. We are most likely at the end of our twoyear run with such low interest rates. We anticipate that the Fed will start raising rates, as soon as the next few months, in an effort to curb inflation. As the Fed hikes rates, long-term adjustable rate mortgages will become a more attractive option for many. Prior to the pandemic, the average 30-year fixed rate was 3.75% and we could likely see that rate again by the end of 2022. Stay tuned!
Nantucket: Sales as % of List Price and Assessed Value As of Q4 2021 160%
150%
140%
130%
120%
110%
100%
90%
80%
70%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Avg Sale as % of List price
91%
93%
93%
90%
79%
82%
84%
88%
90%
91%
90%
90%
90%
89%
93%
94%
Avg Sale % of AV
152%
130%
114%
99%
95%
106%
89%
81%
139%
141%
103%
127%
123%
120%
123%
155%
Page 2
2021
or less
HEADS’ UP FOR RENTAL OWNERS The Planning Department, along with the Select Board, have sponsored a number of articles related to short-term rentals (now known as STR’s) in residential zoning districts. There have been two recent lawsuits brought by ACK Now against owners of private homes who rent. The basis of the lawsuits was that the rental of one’s private home is a commercial use in a residential zone and that it should, therefore, not be permitted. In both cases, the Nantucket Zoning Board of Appeals and the Building Inspector upheld the existing use under current zoning. In an effort to better define, and regulate STR’s, there are six related articles proposed for our annual Town Meeting which is scheduled for May 2nd. There are just over 2,200 STR’s registered on Nantucket. The Planning Department researched summer noise complaints and learned that, of the 557 calls to the Nantucket Police Department during the 2020 season, 66 addresses were registered as STR’s (11.8% of all complaints), 10 addresses had more than 1 complaint (15% of STR address complaints) and 97.1% of STR’s were not the subject of a noise complaint. It is crucial, as Nantucket shapes policy, that our discussions and decisions be based upon FACTS. The six proposed By-Law amendments would: Define “short term rental” and allow a maximum of one rental lease per lot to be used as a short term rental at any time (example: rent the entire property to one tenant or one dwelling unit but not both at the same time to different tenants), prohibit STR’s in workforce rentals and apartment housing, allow a maximum number of STR properties throughout the island to be in common ownership, continue to allow boarders in owner occupied dwelling units, limit the maximum number of days available for short term rental use per calendar year (last we heard this was 180 days) and, lastly, develop a registration or licensing process in the General Bylaw for short term rentals and establish a department to manage the process, including any required inspections or enforcement (this last one is permitted now under the 2019 state legislation that included STR’s under the Room Occupancy Tax law). Page 3
Covenant Housing on Nantucket Housing Nantucket, the non-profit that oversees the Nantucket Housing Needs Covenant Program, has recently issued the Covenant Program update for 2022. There are over 100 Covenant properties on Nantucket now, housing more than 400 year-round people. Covenant properties are deed restricted, in perpetuity, as affordable. There is a maximum re-sale price that is calculated annually based upon long term residential interest rates and the Median Family Income. The formula takes 30% of the gross annual income of a household earning up to 125% of Nantucket's Median Family Income to determine an affordable monthly housing payment. This monthly payment is then used to back into a mortgage with up to 90% financing. Nantucket's Median Family Income is currently $122,800. When the program began in 2003, the maximum sales price was $406,162 and the qualifying income could not exceed $102,750. In 2022 the maximum sales price is $963,867. To qualify, the buyer's household income must be at, or below $184,200 per year. The buyer also must have no more than $481,934 in unrestricted assets. Housing Nantucket has many more buyers than there are properties available. If you own a property with more than one structure and would like to know more, please contact them directly. There are no-interest funds available, through the Town's Affordable Housing Trust, to help property owners create Covenant housing, whether for improved property or for vacant land. The program allows owners a way to subdivide their property (that would not otherwise be sub-dividable), to generate some income and to help fellow islanders.
WHAT’S THE BUZZZZ? Nantucket Community Sailing (NCS) is opening up registration for summer sailing classes. Registration opens to the general public on February 1. Early registration (and scholarships) are available for islanders between January 25-27. Please contact NCS directly at 508-2286600 for more info. Nantucket Together has developed a Good Neighbor Pledge for us to share with our visitors. It is a living document and can be edited to suit different circumstances (rentals, hotels, inns, etc.). Feel free to print it out and leave it with your house information. We will be including a version in our rental welcome packets. Here is a link to the documents in Word form. The Hospital Thrift Shop has drop off hours throughout the winter and they are making it very easy to donate goods. Simply drive down India Street during the appointed hours and there are friendly, masked folks who will help unload your car right in front of the shop. Check out their web site for hours: https://hospitalthriftshop.org/
Nantucket: Home Prices As of Q4 2021 3436
3500 Avg Home ($OOO)
3225
Median Home ($OOO)
3000 2615 2500
2378 2124 1945
1500
1495
1750
1726
1528
1525
1425
1525
1600
1670
1400 1100 970
1000
2133
1970 1666
1550
2434
2276
2271 2103 2000
2588 2440
2373
1013
1050
999
500
0 2006
2007
2008
2009
2010
2011
2012
2013
Page 4
2014
2015
2016
2017
2018
2019
2020
2021
Nantucket and Farming The Town of Nantucket has sent out a notice advising all property owners that Nantucket is a Right-to-Farm Community. The notice states: It is the policy of this community to conserve, protect and encourage the maintenance and improvement of agricultural land for the production of food, and other agricultural products, and also for its natural and ecological value. This disclosure notification is to inform buyers or that the property they are about to acquire or occupy lies within a town where farming activities occur. Such farming activities may include, but are not limited to, activities that cause noise, dust, and odors. Buyers or occupants are also informed that the location of property within the Town may be impacted by commercial agricultural operations including the ability to access water services for such property under certain circumstances. For more information, or if you have questions, please contact the Nantucket Select Board.
Nantucket Sales by Price Sector 2021 $7-$10M 33
Under $500K 37 Over $10M 28
$5-$7M 41
Under $500K $500K-$1M
$500K-$1M 81
$1-$2M $2-$3M $3-$4M
$4-$5M 48 $1-$2M 243 $3-$4M 95
$4-$5M $5-$7M $7-$10M Over $10M
$2-$3M 143
BLUE SKIES AHEAD Last year saw some of the highest demand for rental properties in recent memory, but 2022 is shaping up to be a record-breaking year. The Steamship Authority recently reported that an astonishing 8,056 bookings were made in the first 8 hours of opening day, while a 'mere' 5,530 reservations occurred on opening day, 2021. Most weekend boats during the summer are now completely booked for autos. If you plan to bring your car over between May and September, you'll likely need to make a mid-week reservation. This might be the year to consider alternate means of transportation. Nantucket has a fantastic network of bike trails. Enjoy sunshine and blue skies while exploring the island from one end to the other. The Nantucket Regional Transit Authority has also worked hard to broaden access to the island via The Wave shuttle, and there are always local taxis and Ubers. The activity at the Steamship reflects the high demand we are seeing in rental bookings as well. Over the past 2 years, many rental homes have come off the market as homeowners have decided to spend more time here and take advantage of having a home in one of the most beautiful places in the world. This year, more than most, we are advising tenants who have some flexibility to consider the shoulder seasons. September is Nantucket's best kept secret! Page 5
Nantucket: Average Months on Market All Properties As of Q4 2021
12
11
10
9
8
7
6
5 Average Months on Market
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
7
8
11
9.75
10
10
11
10
9
8
9
8
9
10
9
6
Oh My Goodness 2021! 825
$2,336,773,000
Total Number of Sales
Total Sales Dollars
Congratulations to Mary Malavase! People often ask what the initials are next to the names of our agents. The initials represent professional designations that have been obtained by doing additional education beyond the minimum required by license law. In Massachusetts, real estate agents are required to take 12 hours of specifically targeted continuing education every two years in order to re-new their real estate license. Mary has recently obtained her GRI designation (Graduate Realtor Institute), by doing an additional 96 hours of education through the National Association of Realtors. Mary is one of only 6 real estate agents on Nantucket to hold the designation, half of which work at Atlantic East. Congratulations to Mary!
Atlantic East NANTUCKET
REAL
ESTATE
Penny Dey, GRI, ABRM and Heidi Drew, ABR, RSPS, SRS, Broker/Owners Ken Beaugrand; Linda Bellevue, GRI, CBR; Peter DuPont Alison K. Forsgren, SRES; Angel Frazier; Mary D. Malavase, GRI, ABR, RSPS, SFR; Jane Miller, ABR, RSPS Erikka Perkins; Meg Ruley, ABR, RSPS; Lisa Sherburne, ABR, RSPS; Melinda Vallett; Geri Walker, RSPS, SFR Tanya Babaitsava, Office Manager We believe in doing one thing and in doing it well! 82 Easton Street Nantucket MA 02554 508.228.7707 NantucketRealEstate.com
Volume XVIII, Issue 1, Winter 2022