Summer 2023 Atlantic East Nantucket Real Estate Newsletter

SUMMER

Summer is here in full force with lots of people enjoying all that Nantucket has to offer during our season: beaches, history, boating and fishing, corn and tomatoes, and great dining and shopping. One can always find a spot that is not yet discovered or crowded! We got through our Annual Town Meeting in May which ran all for a full day and an evening. There were 115 articles on the warrant and the community listened, learned, asked questions and voted. The article that generated the most discussion was Article 60 which sought to regulate short-term rentals by allowing only those who own and live in their houses for more than 6 months each year to rent, by right, on a short-term basis. The article was flawed and possibly not legal or enforceable. Town Meeting voted it down (60% against), largely because voters wanted to give the Short-Term Rental Workgroup the opportunity to finish the job they were tasked with. They have now done that (see article on page 3) and a Special Town Meeting will decide what we as a community will do going forward. The Nantucket Association of Real Estate Brokers organized and funded a study of vacation rentals with the help of a third party consultant which greatly helped to contribute factual information to the community discussion. Some of the highlighted findings: in the most recent year, there were roughly 4,300 rental leases. Throughout the analysis, nearly all rentals occurred from June through September. Just over half of leases were for one week, while over 90% were for fewer than 32 days. Most properties rent relatively few times. Eighty percent had four or fewer leases per year while 95% had eight or fewer leases. The median property was leased for a total of 31 days out of the year while three of every four were leased for 52 days or less. The data suggests that few homes with rentals are used as the primary place of residence of the owner. While just under 20% are associated with a registered voter, only 6% claim the residential property tax exemption. If you are a Nantucket voter, we’ll see you in November

After the pandemic-driven real estate market of 2020 through 2022, we are back on more familiar ground as we are tracking very close to 2019 in many respects. During the pandemic, buyers were moving quickly and nearly two years of inventory was selling per year, leading to the very low number of listings on the market today. Add to this the number of people who are holding onto their homes because they have low-cost mortgages and we are left with little inventory to sell. Continued on Page 2...

MARKETNEWS

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For those who need financing, it is difficult to contemplate getting a mortgage that costs double what it did a few years ago. The market continues to contract. The average number of listings on Nantucket, in the six years prior to 2020, was 433 at the end of the second quarter; this year it was 129 properties. Real estate sales through Q2 on Nantucket are down 42% from 2022. The dollars represented by those sales are down 39%. That being said, in 2019 at the end of Q2 there were 194 transactions ($328M); this year it is 133 ($434M). In simple terms, there are fewer sales and they are for more money

As predicted, the largest number of sales through Q2 were in Town (56), followed by the Mid-Island area (31), Miacomet (11) and 'Sconset and Surfside (10 each). There have been no closings yet in 2023 for properties in Fisher's Landing, Madequecham, Nashaquisset, Pocomo, Quaise, Quidnet, Shawkemo, Squam and West of Town. The average price of a residential property on Nantucket is $4.141M (statistically even with last year) and the median price is $2.65M (-12%). However, the average selling price of vacant land is now $1.548M (-39%) and the median lot price is $885K (-48%) from 2022. Nantucket typically averages around 500 real estate sales annually. In the pandemic-driven years there were 679 sales in 2020; 825 in 2021 and the number of sales started to drop in 2022 to 427 sales as the inventory diminished. It comes as no surprise that the dollars represented by these sales were up 43% in 2020 compared to 2019, 22% from 2020 to 2021 and then started to slide -43% from 2021 to 2022.

The average sale price of a property (all sales) on Nantucket is now $3,268,000 (-5%) from 2022 when it was $3,448,000. In 2021 it was $2,832,000; in 2020 it was $2,792,000 and in 2019 it was $2,150,000. As is the case in many special places, the average selling price has increased over 30% since 2019 and it appears to be holding in residential sales. The average time on the market (all properties) is starting to rise - currently it is 6 months, up from 5 in 2022. The average selling price, as a percentage of list price at the time of sale, slid slightly from 94% in 2022 to 92% in 2023 YTD. Properties are now selling for 149% of the assessed value, down from 181% in 2022.

Today there are only 2 listings under $1 million on Nantucket, both of them vacant land. There are 4 free-standing houses for sale under $2 million. The average price of listed properties is $5.9 million (45% higher than the average selling price of $3.2 million). This is a market with new challenges that we have never seen before on Nantucket. Stay tuned to see what the rest of the year brings!

Nantucket: Home Prices

SHORTTERM RENTALWORKGROUPUPDATE

Those of you who have been following, for the past 3+ years, the debate(s) about vacation rentals on Nantucket will be happy to know that the STRWG, appointed by the Town last fall, has finished their final recommendations to the Select Board. The volunteer group of nine spent hundreds of hours collecting data, meeting, evaluating and discussing proposed zoning and general by-law changes that the community will vote on at the Special Town Meeting, to be held on November 7, 2023.

The group was tasked with:

· To provide 100% transparency in all discussions, deliberations, and decisions in respect to STRs on Nantucket.

· To reach 100% agreement to the contributing data points, how they are defined, and the necessary analyses for decisionmaking by the STRWG

· To develop sensible guidelines for STRs that consider (but not be limited to):

Nantucket’s unique situation and the history of seasonal rentals, how STRs are developing in similar communities and the impact on Nantucket, and the economic impact of the suggested guidelines

· To identify either new Bylaws and/or Zoning that would be voted upon at the 2023 Annual Town Meeting and beyond [Shifted to 2023 Special Town Meeting]

· To identify any guidelines that may arise that would support Article 39 (local STR regulations voted in May 2023)

There has been lots of talk, at least within the industry, about the slowdown in the vacation rental market throughout the country…Newport, Martha's Vineyard, even Hawaii. A quick Google search shows pages of local and national news outlets reporting on the shift in the market and predictions from the real estate and financial sector on what is to come. The number of rentals on Nantucket have dropped back to pre-pandemic levels.

The island is seeing its own lag in bookings with homeowners who have been offering their homes for rent for decades, if not generations, seeing empty weeks that would normally be booked by repeat tenants. There are many theories…it's too hard to get to the island, the island is too expensive, the traffic is terrible (rentals are down and traffic is worse – so we cannot blame everything on rentals!), but the people are still coming.

The Steamship Authority website crashed on opening day of 2023 reservations, the Nantucket Memorial Airport reported it's 'busiest 24-hour arrival stretch ever' at the beginning of July and the Nantucket Police Department had to close two popular th beaches on 4 of July due to overcrowding. What's the explanation? What we do know is that people are here enjoying the island. We still have some scattered availability in great properties. Give your favorite Atlantic East agent a call to learn more about what is available. Your best Nantucket vacation may be one you haven't booked yet!

Some Useful Information!

The 'Sconset Trust: has created a landmark publication to help guide principles for Building with 'Sconset in Mind. Michael May, formerly of the Nantucket Preservation Trust was instrumental in writing the book. Thanks to generous underwriting, the publication is available free of charge. Please stop by the ‘Sconset Trust office at One New Street in the village of ‘Sconset to pick up a copy or reach out to them at 508.257.4100.

In the Know: we have loads of useful information about the Nantucket real estate market, including historical data and a printed guide to buying and selling on-island. The market here is unlike any other; there are challenges unique to Nantucket including special regulatory processes, closing costs and historical guidelines. It more than pays to work with a local real estate broker. If you have an interest in real estate on-island and are not already subscribed to our multiple listing service, LINK Nantucket, please reach out to your broker. Being informed and timing are the key to everything related to Nantucket real estate.

WHATTHE HECK DOALLTHOSE INITIALS MEAN?

The short answer is that the initials following our agents' names mean that they care enough about the business of real estate to avail themselves of educational opportunities, offered by the National Association of Realtors, beyond the minimum required by law. Our agents hold a collective 20 designations and certifications at this time and have, on average, over 27 years of practice in the business of real estate. We have 6 ABR's (Accredited Buyer's Representative), 5 RSPS's (Resort and Second Home Property Specialist), and 2 GRI's (Graduate Realtor Institute). REALTORS® with the GRI designation have in-depth training in legal and regulatory issues, technology, professional standards, and the sales process. We also have one each of the following:

ABRM: This designation is for a manager of an office with agents who hold the ABR designation.

CRB: The Certified Real Estate Brokerage Manager (CRB) is one of the most respected and relevant designations offered in real estate business management and is awarded to REALTORS® who have completed advanced educational and professional requirements. CRB designees are better positioned to streamline operations, integrate new technology and apply new trends and business strategies.

e-Pro: National Association of Realtors’s e-PRO® certification teaches the use of cutting-edge technologies and digital initiatives to link up with today's savvy real estate consumer

NAR Green: Through NAR's Green designation, the Green Resource Council provides ongoing education, resources and tools so that real estate practitioners can successfully seek out, understand, and market properties with green features.

SRES: The Seniors Real Estate Specialist® designation program educates REALTORS® on how to profitably and ethically serve the real estate needs of the fastest growing market in real estate, clients age 50+.

TRC: The Transnational Referral Certification trains the agent in integration of international referral business.

SFR: The Short Sales and Foreclosure Resource® certification teaches real estate professionals to work with distressed sellers and the finance, tax, and legal professionals who can help them, qualify sellers for short sales, develop a short sale package, negotiate with lenders, limit risk, and protect buyers.

DO NOT MISS!

Do not miss this summer’s featured exhibit at the Nantucket Historical Association’s Whaling Museum. Called Summer on Nantucket: A History of the Island Resort, it is a fascinating view into the past. Containing more than 200 artifacts from the NHA collection, this exhibition tells the story of Nantucket as a summer destination, from the opening of the first tourist hotels in the 1840s to the multi-billiondollar real-estate, construction, and rental economy of today. The exhibit will be on display until November 1st and admission is free for people who live on Nantucket year-round.

Nantucket Community Television has been producing an award-winning series of original programs dedicated to island life. The newest segment has just been released, called Nantucket Life: On the Isle - A Living Heritage. It covers the story of Nantucket's theater group On the Isle and its 120 year history. Featuring performances from 2022's Titanic the Musical, this is one segment you won't want to miss. Nantucket Life: On the Isle is available now for on-demand streaming on YouTube and will premiere on local Channel 18 as well. Check out their web site for details: https://www.nantucketcommunitytelevision.org/program-categories/nctv-originalprograms

CONGRATULATIONSTO MARYD. MALAVASE!

WearesendingthemostheartfeltcongratstoourownMaryD.Malavasewho,alongwithJim Richards,wasnamedSenioroftheYearfor2022.

Theawardannuallyrecognizesseniorswhovolunteerandareactiveandinvolvedinthe communityatlarge.Since2004,onemanandonewomanhavebeenrecognized.

IslandRealtorMaryMalavasehasbeenavolunteerforalonglistofislandorganizations.Asa memberandpastpresidentoftheNantucketGardenClub,shehasorganizedtheannualDaffodil Showformanyyearsandcontinuestoworkonitbehindthescenes.Sheservedontheboardof theNantucketHistoricalAssociationandhassteereditsannualFestivalofTrees.Sheisalsoa pastpresidentoftheChamberofCommerceandwaschairofitsVisitorServicesAdvisory Committee.

C K E

R E A L E S T A T E

Penny Dey, GRI, ABRM, Broker/Owner; Ken Beaugrand; Linda Bellevue, GRI, CBR; Heidi Drew, ABR, RSPS, SRS; Peter DuPont; Alison K. Forsgren, SRES; Angel Conrad Frazier; Mary D Malavase, GRI, ABR, RSPS, SFR; Jane Miller, ABR, RSPS; Erikka Perkins, Rental Manager; Meg Ruley, ABR, RSPS; Lisa Sherburne, ABR, RSPS; Melinda Vallett; Geri Walker, RSPS, SFR; Mary O’Donnell, Office Manager; Yesenia Valer Perez, Office Assistant

We believe in doing one thing and in doing it well!