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The light on Nantucket is exceptional in the fall. It is very intense and makes everything, especially anything with white trim, look almost saturated. Artists often remark upon the unique quality of the light here. We were able to enjoy the super red moon and lunar eclipse recently in a night sky that was crystal clear. This is the time of the year that we catch our breath after a very busy summer. The weather was beautiful all summer long with one long string of perfect beach days. The Steamship Authority reports that traffic was up and restaurants and retail businesses had a great season as well. People seemed happy to be here and, beyond the usual complaining about traffic and bad driving manners, it seemed like it was a very good summer for the island. The real estate market was very strong coming into summer and then, sometime in late July, we hit some slight doldrums. The number of sales for the month of August was down by 15% and sales dollars down by 4% compared to last August. As is often the case, conditions were caused by a confluence of factors, among them the shaky Chinese economy, followed by financial market volatility at home with a dash of sellers aggressively overpricing their Nantucket properties at the beginning of the summer. Many buyers took stock and resisted, as no one has to buy a property on Nantucket, primarily a discretionary market. What was lacking this summer was any kind of urgency on the part of buyers. Add to this the uncertainty about the coming election year and the Federal Reserve Board deciding, late in the summer, to leave the benchmark interest rate as is, even with strong fundamental indicators that the recession is over, and it was a somewhat unpredictable season. In spite of this turmoil, the average price of a property on Nantucket continues to climb. The average price of a home on island is now $2,190,000, an increase of 4% since last December. At the end of 2014 it was $2,124,000 and at the end of 2013 it was $1,726,000. There were very fast gains in 2014 that were unsustainable. The median price of a residential property on Nantucket is now $1,458,000, up 5% from $1,400,000 at the end of 2014. The lowest the median price of a house on Nantucket in has been in the past 15 years was $970,000 in 2009. And the highest was $1,550,000 in 2006, just prior to the recession. It is important to note that prices are not yet as high as they were at the previous height of the market (2006). Continued on Page 2...
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The average price of vacant land has actually declined each year since 2011, largely due to the lack of available inventory and a flood of entry level priced land listings, mostly located in the Mid-Island area, to the market in the past few years. Vacant land is now selling for an average of $937,000 and a median price of $650,000. The average price of vacant land was $2,378,000 in 2007. It now takes, on average, around 8 months from when it is first listed for a property on the island to sell. This figure has been declining roughly 1 month each year since 2012. The average selling price, as a percentage of list price, is 92%, up from 90% in 2014 and 88% in 2013. This means that sellers are pricing more correctly to current market conditions and that buyers still feel there is value in the marketplace. The average selling price, as a percentage of assessed value, is now 145%, typical for the end of the property revaluation cycle which we are now in. This figure should drop dramatically once the new assessments are in early in 2016. The third quarter numbers are in and there were 145 sales ($250,775,000) compared to 135 sales ($273,121,000) in 2014. There have been only three years in history that the Nantucket real estate market exceeded $1 billion (2004, 2005 and 2014). Before rushing to any conclusions we will await the fourth quarter numbers. It would appear that we are on track for a real estate year somewhere in the $850 million range, a vast improvement over 2009, the depth of the most recent recession, when the total sales were just over $400 million. There is a tremendous amount of building going on right now on Nantucket. Many people who speculate re-entered the market in the past few years. In 2013 there were 108 building permits issued for new residences, in 2014 there were 140 and, as of the 3rd quarter, there have been 108 permits issued already this year. What this does not capture is the amount of renovations and additions that are occurring. Many of the best building contractors are now booked out through 2016. Continued on Page 4....
Nantucket: Total Annual Number of Sales 3rd Q 2015 900
800
700
600
500
400
300
200
100
0 Total N um ber of Sa les
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
482
522
613
776
659
475
399
248
237
364
384
546
506
566
341
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Nantucket: Building Permits Single Family Residences, YTD 250
235 211
212
200 174 164 156
152 150
140 127 108
108
100
64 52
54
57
2010
2011
2012
43
50
0 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2013
2014
2015
Update on Septic Systems and Title V If your home is in Massachusetts and has a septic system, you'll need to have the system inspected and certified under Title V before transferring ownership or making significant alterations or additions to your home. Title V is the set of state regulations that govern this process. These regulations were created in 1995 by the Massachusetts Department of Environmental Protection (Mass DEP) to protect waterways, the groundwater and the environment. Septic system inspections are a key piece of these regulations. The Nantucket Board of Health administers Title V and keeps a record of as-built septic plans, as well as inspection results. It is important to note that the local Board of Health has adopted more stringent regulations than those of the state due, in part, to rapid infiltration rates and the island having coastal areas characterized by tidally induced ground water fluctuations. Certain sensitive zones now require that the seller of a property must install an innovative/alternative (I/A) septic system, which has nitrogen reducing upgrades, regardless of whether or not the current system complies with Title V. Title V regulations require septic system inspections anytime ownership of a property is transferred. This includes when the property is sold to new owners or when it is inherited. There are other circumstances when an inspection may be required as well (some changes of use, subdivision or significant expansion to an existing structure among them). The Title V inspection is performed by a certified septic professional, licensed in the state of Massachusetts. These professionals can also perform any necessary repairs, upgrades, or replacements necessary for compliance with the regulations. In Massachusetts, the state does allow for a Confidential Voluntary Assessment, which means a homeowner can have their septic system inspected without having to submit their finding to the Board of Health. This could give the homeowner a heads-up to any problems or repairs needed before the official Title V inspection. When inspection time comes, the inspector will look at all parts of the septic system, including the leach field, distribution box and septic tank. The inspector will also check for hydraulic failure and check the distance between the system and high groundwater elevation. The inspector then writes up a report which is filed with the local Board of Health. If a system passes, the inspection is good for two years from the date of the report. If the system fails the inspection that is another story! Please contact the Nantucket Health Department with any questions. Page 3
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In the spirit of generosity, we are sharing this information: the fall and early winter are very, very nice times to be on Nantucket. Almost everything is still open for business and the island is much less frenetic and crowded than during the summer months. It is easy to get into restaurants, and many have seasonal fall menus featuring local favorites such as bay scallops and cranberries. One can decide at the last minute to visit and find lovely accommodations at more affordable rates than in high season. No car is necessary if staying in Town. Here are a few of our favorite things about fall on Nantucket: walking through Town at night and smelling wood burning fires, going to any beach where it is likely to be empty, family scalloping season, fall restaurant week, going to the farms and picking up some pumpkins and taking one last sail in the harbor. Sunsets are also the best in the fall (although they are alarmingly earlier each day because Nantucket is so far to the east of the mainland). The island is host to some special weekends through the fall: Cranberry Harvest weekend coincides with the Columbus Day holiday (October 9-11), and then Stroll Weekend is celebrated on December 4-6, 2015. If you are planning on coming for Stroll you should be making your arrangements now! We are already busy booking rentals for 2016. If you are planning to vacation during July or August next year, do not wait to make your plans! The month of August typically books up first, followed by July and then September and June. If you are a rental homeowner whose property is listed with us please be sure to get your availability and rate information to us as quickly as possible. The more current our information is the easier it is to get you rentals. We love hearing from you!
It Is Blocking My View! You bought a home with a harbor view and ten years later the neighbor's trees are blocking your view. Can you cut the trees down or remove the branches? Well, yes, if you have permission from the owner of the property or if the branches are leaning onto your property. If you decide to cut them down without asking, be prepared to pay triple damages for illegal cutting. This also applies to girdling or any other destructive damage that can destroy trees or shrubs. Best advice: before any pruning or chainsaw action near your property line, check your survey plot plan or, better yet, call a surveyor if you are unsure of the location of the trees or vegetation.
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There have been 17 sales of commercial property so far in 2015 for a total of over $46 million, compared to 20 commercial sales in 2014 ($42 million) and only 9 ($19 million) in 2010. The increase in commercial activity is one of the most reliable indicators of the health of the real estate market. Investors are willing to take business risks again. The number of listings has been on the rise for the past year with approximately 475 properties currently listed for sale. The total number of property transfers to date in 2015 is 341, compared to 566 for all of 2014, 506 in 2013, 546 in 2012 and 384 in 2011. We are on track to end the year with between 500 - 500 sales. Total sales dollars to date in 2015 are at $589 million. Last year at this time the total was $665 million, 11% higher than this year. There is great news on the distressed property front (foreclosure sales) with foreclosures as a percentage of the market running slightly above 0%. In 2014 and 2013 it was 1%, in 2012 it was 3%, in 2011 it was 2% and in 2010 it was 7% of all property transfers on Nantucket. Please contact your agent if you would like more in-depth information on the Nantucket real estate market. Page 4
3 Cheers for the Land Bank We often take for granted the Land Bank and the enormous amount of good that has been done for our island community through their efforts. Today over one half of the island is preserved as open space by various conservation groups including the Land Bank. Open space provides areas for people to enjoy, helps to maintain habitat for hundreds of species, and helps to protect the island's aquifer by providing ample unspoiled acreage for rain and snow water recharge — our sole source of drinking water. Some of the more familiar Land Bank properties are Miacomet Golf Course, Gardner Farm, Sanford Farm West, Polpis Harbor and Lily Pond. Instituted in 1983, the Nantucket Islands Land Bank was the first of its kind in the country and was created to acquire, hold and manage important open spaces on the island. Bill Klein, then our Planning Director, had the vision to harness the power of an ever-escalating real estate market by establishing a transfer fee of 2% on the sale of all real estate on Nantucket. Interestingly enough, Bill lobbied the leaders of the real estate community to get on board and support the initiative. And thankfully they did. The Land Bank fee is typically paid by the purchaser of real estate and, although it is not tax-deductible, it can be added to the cost basis of the property thereby reducing the taxable gain when the owner decides to sell. There is an exemption for first time buyers, who have never owned any real estate anywhere ever, from the land bank fee on the first $400,000 of the purchase price. Since its inception, the Land Bank has generated more than $230 million and has acquired over 3,000 acres of open space. The home rule petition, granted by the Commonwealth of Massachusetts, enabled a Land Bank Commission of five elected members to implement and oversee the mission of the act. Fun Fact: It is called the Nantucket Islands Land Bank (plural) because it includes Tuckernuck and Muskeget islands to the west of Nantucket. For more information, please check out www.nantucketlandbank.org.
Nantucket: Total Annual Sales Dollars 3rd Q 2015
$1,200
$1,000
$800
$600
$400
$200
$0
2001
2002
2003
2004
Total Sales Dollars (000's) $452,913,000 $450,458,000 $613,765,000 $1,065,180,0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
$1,186,885,0 $917,238,000 $852,045,000 $574,274,000 $434,592,000 $694,253,000 $531,597,000 $809,846,000 $748,866,000 $1,005,240,9 $589,594,000
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Nantucket: Average Months on Market All Properties as of 3rd Q 2015 12
11
10
9
8
7
6
5 Average Months on Market
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
8
7
8
9
7
7
7
8
11
9.75
10
10
11
10
9
8
This and That Congratulations!: John F. Trudel III was recently appointed by the Nantucket Board of Selectmen to fill a vacant seat for the Alternate Position on the Planning Board. The Planning Board is the local body that deals with implementation of the state subdivision control law, also known as Chapter 41. Subdivision control law originated in Massachusetts because of concern over the effect of subdivision of land and the sale of private land on the planning and the development of streets, both public and private, with a community. The Nantucket Planning Board deals with land development, roads and drainage, secondary and tertiary dwelling approvals, curb cuts and many other land use issues. The balance of John’s term is 2 years. Final Fall Color: The final leaves of autumn are drifting to the ground, but if you look closely, you will see the most vibrant leaves of reds and oranges on the side of the roads and clinging to trees. Beware - it is poison ivy! Despite the dreaded red rash, it does have some very positive uses. The root system is very strong, making it an ideal plant for erosion control. The berries are loaded with protein, a real treat for birds in the winter and the leaves are a meal for certain animals on the island. Coming Up: Cranberry Harvest weekend is being held from October 9-12, coinciding with the Columbus Day holiday weekend. Family scalloping season started October 1st and commercial season starts on November 1st. Christmas Stroll weekend will be the first weekend in December from the 4th - 7th. For a comprehensive listing of activities on Nantucket, go to http://nantucket.net/events/
Atlantic East N A N T U C K E T R E A L E S TAT E Heidi Drew, ABR, RSPS Penny Dey, GRI, ABRM 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; John F. Trudel III, SFR; Melinda Vallett; Christine Whelden, ABR; Geri Walker, Office Manager
We believe in doing one thing and in doing it well. 82 Easton Street Nantucket MA 02554 t: 508-228-7707 1-800-228-4070
www.NantucketRealEstate.com Volume XI, Issue 4, Autumn 2015