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W I N T E R As we turn the page on 2020, we are looking ahead to all that we hope 2021 may bring. The vaccine, the ability to move around more freely and travel, hugging friends whom we have not seen during the pandemic are but a few of the things that we anticipate. Last year was full of many surprises, some quite challenging and some unexpectedly positive. In the latter category was the performance of the Nantucket real estate market. Almost no one could have predicted how 2020 ended. The year with the highest number of sales prior to 2020 was 2018 with 543 transactions and $1.2 billion in sales. Last year smashed those numbers with 679 sales (+43%) totaling $1.895 billion (+86%) in sales. There were more than 320 sales representing $887 million dollars in closings in the fourth quarter alone. The average selling price of all properties is $2,792,000, up 30% from 2019. The average selling price of a home is $3,225,000 (+29%). The median home price is now $2,434,000 (+43%). Vacant land is selling on average for $1,541,000 (+26%), and the median price of a vacant lot is $975,000, exactly the same as it was at the end of 2019. The time on the market is shortening: 9 months compared to 10 at the end of 2019. Properties are now selling for an average of 93% of the list price at the time of the sale. Continued on Page 2...
M A R K E T
N E W S
Properties are selling, on average, for 123% of the assessed value. The Tax Assessor's office does annual revaluations in order to keep up with the market (based on improvements, new dwellings, additional amenities, etc.). There is also an island-wide revaluation of all real property every five years as mandated by the state. As the last one was in 2019, the next scheduled island-wide revaluation is going to take place in 2024. Not surprisingly, the area with the largest number of sales was Town (143), followed by Siasconset (76) and then the Mid-Island area (69). It was unusual to have had so many Siasconset sales as the Mid-Island area has consistently been the second most active location sector. Areas with five or fewer sales include Squam, Pocomo, Quaise and Madequecham. There were no recorded sales on Tuckernuck Island in 2020. In 2020 we tracked the pace of sales as we were heading into the season as much to help us plan as out of curiosity. As is typical, the largest number of new listings came on the market between April and early August. Properties went under contract at a steady clip from April through October. The number of closings then increased steadily from July through December. In 2020 there were only 20 sales under $500,000, most of which were restricted for affordability. Between $500K and $1M there were 96 sales; $1-$2M there were 197 sales; $2-$3M there were 129 sales; between $3-$4M there were 71 sales; between $4$5M there were 43 sales; between $5-$7M there were 51 sales; $7-$10M there were 20 sales, and there were 16 sales over $10 million. For comparison, in 2019 there were 5 sales over $10M. As of this writing, there are only 192 properties actively listed for sale on Nantucket. During the last recession there were over 650 listings, and in a more balanced market, there would be 350-400 active listings. Basic economics would indicate that prices are on the rise as demand is outstripping supply. Although there has been slight uptick in bond yields and mortgage rates recently, the average 30-year fixed rate mortgage is still at, or below, 2.75% depending upon loan to value ratios and credit scores. There is no question that the raging pandemic continues to impact the economy and will slow the recovery until it is under control.
Nantucket Total Sales Dollars in (000's) YTD As of 12.31.2020
$2,000
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
2004
2005
Total Sales Dollars $1,065 $1,186
2006
2007
2008
2009
2010
2011
2012
2013
$917
$852
$574
$434
$694
$531
$809
$748 $1,005
Page 2
2014
2015
2016
$882
$972 $1,066 $1,202 $1,027 $1,895
2017
2018
2019
2020
2020 Sales by Price Sector, in 000's $7,000 -$10,000 Under $500K Over $10,000 20 20 16 Under $500K
$5,000 -$7,000 51
$500-$1,000 $500 -$1,000 96
$1,000-$2,000 $2,000-$3,000
$4,000 -$5,000 43
$3,000-$4,000 $4,000-$5,000 $1,000 -$2,000 197
$3,000 -$4,000 71
$5,000-$7,000 $7,000-$10,000 Over $10,000
$2,000 -$3,000 129
Sellers: New Oil Tank Regulations If your house has oil heat, this information applies to you. At the Nantucket Annual Town Meeting in 2019, new oil tank regulations were passed. Subsequently approved by the state, they are now in full effect. Before a property with oil heat is sold, the tank must be inspected by a licensed oil burner service technician to confirm that it is in compliance with the regulations. The compliance report is to be provided when the Nantucket Fire Department inspects for smoke and carbon monoxide detectors. The cost of each inspection is $50, paid by the seller of the property. There have been regulations regarding buried oil tanks in Massachusetts for many years. This new regulation seeks to add another level of safety by requiring double hulled tanks which will reduce the likelihood of an oil spill. See full regulation here.
Nantucket: COVID-19 Update After a summer with only 63 cases of COVID-19 between March and early September, Nantucket has experienced a rise, similar to the rest of the state, in the number of positive cases (over 1,000 and 4 people have died). Nantucket is still in Phase 3, Step 1 of the Commonwealth's COVID Recovery Plan. As of January, Massachusetts travel restrictions remain in effect. Everyone who comes into the state is required to fill out a short on-line form and be able to produce it if asked (or face a fine of up to $500 per day). People are also required to self-quarantine for 14 days once in Massachusetts or have had a negative COVID-19 test within 72 hours of arriving in the state (and self-quarantine until negative test results are received). Testing for symptomatic people or those who feel they may have been exposed to the coronavirus is still available at the outside portico of Nantucket Cottage Hospital. Asymptomatic testing has been moved to the VFW building, located at 22 New South Road. The Town of Nantucket recently announced that Phase 2 of the vaccinations is expected to begin on-island in February and run through March. Phase 3 is expected to be between April and June. For more information: Nantucket Cottage Hospital (https://nantuckethospital.org/coronavirus-news-and-information/) or the Town of Nantucket (https://nantucket-ma.gov/1657/Covid-19). Page 3
Covenant housing MAX price Housing Nantucket, the non-profit that administers among other things the Nantucket Housing Needs Covenant Program, has recently released the new guidelines for NHNC properties. The maximum home re-sale price is adjusted annually based upon a formula that involves the Area Median Income (AMI) and residential loan interest rates. When AMI is high and interest rates are low, as they are now, the price goes up. The maximum resale price for a NHNC property is now $888,515. The Area Median Income is now $116,700. To qualify for the program, the household income must be at, or below, $175,050 per year (150% of AMI) and the buyer(s) must have unrestricted assets less than $444,257. At the inception of the program in 2003 the maximum sales price was $406,162. There are now over 95 covenant houses scattered in neighborhoods around the island, housing many folks who are long-time islanders and part of our community. 2021 Nantucket Housing Needs Covenant Guidelines
LAND BANK RAISES EXEMPTION Established in 1984, the Nantucket Islands Land Bank charges a 2% transfer fee, paid by the buyer, on real estate sales on island. The money is used to buy open space for the public to enjoy, and the Land Bank now has over 3,100 acres in conservation. The Land Bank Commission, in response to the current market conditions, recently increased the first time home buyer exemption from $600,000 to $850,000, effective January 1, 2021. This is the largest amount they have ever increased it at one time. In order to qualify for the exemption, a buyer must have never owned real property anywhere (not just on Nantucket) and must commit to living in it year round. The increase was based on the average selling price of homes that qualified for the exemption in 2020: $842,608. If a qualified buyer were to purchase a home for $850,000, they would now be saving $17,000 on closing costs. Thank you to the Land Bank for doing their part to help create year-round ownership opportunities.
$3,000,000
Nantucket Real Estate As of 12.31.2020
$2,500,000
$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
$975,000
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
$1,521,000
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
$2,434,000
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
$3,225,000
Page 4
MORE SHORT TERM RENTAL REGULATIONS? In 2019 the definition of properties that are subject to the state’s Room Occupancy Tax was expanded to include private homes in addition to hotels, motels and inns. The law has effectively created a framework for the state government to track and profit from short-term rentals. With some exceptions, owners of properties that rent for more than 14 days per year have to register with the state and collect and remit a tax, currently 11.7%, on the gross rental amount of each rental. There are now approximately 2,200 Nantucket homes registered with the Commonwealth. Some of these homes rent for the entire season, and some may rent for only 2 weeks in total. ACK Now, a group of summer and year-round residents, is seeking to further regulate and limit short term rentals. They assert that a large number of homes that are rented out on-island are owned by businesses. In our experience, the vast majority of short term rental homes are owned by individuals and families who rent their properties out periodically in order to generate some income to help defray the high cost of owning on Nantucket. ACK Now posits that these “corporate interests” are buying up “housing that would otherwise be used by year-round people”. This is misleading. While there are some exceptions, vacation rental homes and year-round homes are not traditionally located in the same neighborhoods. This has evolved as a result of function as well as price. Many year round people, for a variety of reasons, have chosen to sell their houses and move. Under current laws and zoning homeowners have the right to sell and rent their properties regardless of where the property is located. ACK Now has filed an article with the Town that seeks to further regulate short-term rentals by limiting the number of days each year an owner can rent. They are proposing 45 days for non-resident owners and up to 90 days for year-round residents. This seems inconsistent. The article also proposes that the rental property be registered with the Town (requiring more regulations, a new Town department and more fees). Will the properties be required to have a commercial fire suppression system like a hotel does? Will they be required to pay taxes at the commercial tax rate? Will there be annual inspections by the Board of Health? By the Zoning Department? Where does this lead? ACK Now is claiming that the article will somehow help affordable housing. It’s not clear how limiting the hospitality market, the island’s largest industry, will increase affordable housing. To the contrary, it will likely limit the income of those the group proposes to help. The opportunity to have your voice heard on the article will be at the next Annual Town Meeting which, at this time, is scheduled for Saturday, June 5, 2021 outside in a large tent at the school.
HOUSING RESOURCES IN ONE PLACE The Town web site has recently been updated to include comprehensive information and resources on affordable housing opportunities in one place. There are many useful links to existing programs, information about qualifying to sell or buy, funding sources for both sellers and buyers and upcoming projects and programs that are in the works. Check it out at the Affordable Housing Trust.
VACATION...YAHOO! For Tenants: The holidays are behind us and the Steamship Authority has opened up reservations for the 2021 season. That means if you haven't already, it's time to start planning your summer vacation. It has become commonplace for visitors to book next year's vacation as soon as they've left the island, and each year our early bookings increase and availability decreases the closer we get to warm weather. Perhaps in response to COVID, many homeowners have decided to use their homes themselves this year and not rent. As a result, our available inventory for the most coveted weeks is dwindling fast. With the advent of the vaccine and long term cabin fever, demand is higher than ever. Please visit our website at www.NantucketRealEstate.com or contact your favorite Atlantic East agent today to find the perfect fit for your Nantucket stay before it becomes someone else's perfect fit! For Owners: If you are a rental owner please make sure to keep us updated on your 2021 rates and availability. We will reach out every few weeks if we have not heard from you. We are always seeking new rental listings and pride ourselves on doing no drama rentals. We work very hard to represent properties accurately and to do our best to help expedite smooth rentalsfor our visitors and owners alike. Page 5
Time to Make Ferry Reservations! The Steamship Authority is now taking summer reservations for the Nantucket route both on-line and by mail. Each customer is allowed to book up to five round trips for travel between May 19 and October 18, 2021. On January 26, all routes between the mainland and both islands will open for telephone reservations at 508.477.8600. Please check out their web site Steamshipauthority.com for more information.
Celebrate with a Great Cake! At Atlantic East Nantucket Real Estate we love to celebrate and acknowledge our agent’s birthdays. In the past we would meet for breakfast, have lunch at a local restaurant or get together after work for drinks and appetizers. This has not been an option this past year so we made a delicious new plan. CAKE! Everyone loves cake, so we order the agent’s favorite and have it custom made. Take a look at these scrumptious works of art!
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; Geri Walker, RSPS; Christine Whelden, ABR; 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 XVII, Issue 1, Winter 2021