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N A N T U C K E T
H A P P Y
S P R I N G
It is hard to believe that this is our 48th newsletter. We started the company in 2005, convinced that there was a different way to practice real estate on Nantucket. Shortly afterwards we weathered the long recession but are happy to report that we have built the company the way we envisioned it: with experienced agents who are well informed and treat one another with a high level of mutual respect. Although we have a thick office policy manual, we operate under the simple principal of treating people the way we would expect to be treated. This seems to be working. We are very pleased to announce that Erikka Perkins, who has worked with us since we founded the company, is now our dedicated Rental Manager. Erikka, who is also a broker, has many years of experience with the logistics of rentals. When you call our office you will likely encounter the cheerful voice of one of our staff people: Geri Walker has been one of our office managers since 2012 and we recently welcomed Ani Mulcahy to Atlantic East as our newest office manager. We feel that we have the team in place to make sure that we are doing the best job possible as we head into the summer season. We can say, with some relief, that last winter was fairly easy - at least in terms of the winter weather. It was a vast improvement over the previous winter and it seemed to fly by. Now, with the days longer and the sun stronger, we have turned our backs on winter and are looking ahead to summer. So far this year the real estate market on Nantucket continues to perform well. Factors that are undoubtedly helping are: low unemployment, the price of oil stabilizing, inexpensive money and happier investors than one year ago. Although we are in an election year, it remains to be seen how that might impact the Nantucket market. Prices on the Rise: The average price of all real estate selling on Nantucket (during the 1st quarter) is $1,869,000, an increase of 8% over 2015. The average price of a home on Nantucket is now $1,938,000 and the median price is $1,450,000. The average price of a vacant lot is now $1,434,000 and the median price is $766,000. Continued on Page 2....
Nantucket Real Estate Change in Value Since 1996 as of 1st Q 2016 700% 621%
627%
600% 530% 500%
400%
300%
316%
309%
NASDAQ - 4,896
S&P 500 - 2,065
271%
200%
100%
0% Average Nantucket Home - $1,938,000
Average Nantucket Lot - $1,434,000
Average Nantucket Sale - $1,869,000
M A R K E T
Dow Jones - 17,746
N E W S : 2
Great 1st Quarter: The first three months of the year saw strong numbers with 105 properties (+16.67%) selling for a total of $196 million (+24.67%). This compares to 89 properties for $156 million in 2015. In 2009, at the height of the last recession, only 28 properties sold for $53 million during the same time period. Properties are Selling Faster: On average, it now takes less than 8 months for a property on Nantucket to sell. This is down from 9 months in 2014 and 11 months in 2012. The singular most important factor in time on the market is to price a property correctly when it is first listed for sale. We have endless examples of sellers who were overly optimistic in their pricing strategy and whose properties sit on the market, sometimes for many years. Indicators are Firming Up: The average sale on Nantucket, through the 1st quarter, is selling for 96% of the list price at the time of sale. Up from the lows of 91% last year and 79% in 2010. The average sale, as a percentage of assessed value (established by the Town of Nantucket) is at 137% now. This number is likely to drop due to the recent revaluation of all property on island by the Tax Assessor’s office. Clean, Bright and New: Is what is selling easily now. Buyers are willing to pay for properties that are in move-in condition and have all the latest in amenities such as new kitchens and baths. Swimming pools continue to gain in popularity as well. Vacant land sales have also been strong as investor developers try to stay ahead of the market. Paying Attention to History: The Nantucket real estate market typically follows the financial markets. The average price of a home on Nantucket in 1996 was $366,000; it is now $1,938,000 (+530%). The average price of vacant land in 1996 was $231,000; it is now $1,434,000 (+621%). The average price of all real estate on the island in 1996 was $298,500; it is now $1,869,000 (+627%). Compare this to the major financial indices for the same time period: Dow Jones Industrial Average, at 17,746 (+271%), NASDAQ at 4,896 (+316%) or the S&P 500 at 2,065 (+309%). And, as we often say, Nantucket is naturally limited. Page 2
Annual Town Meeting: Affordable Housing and Sewers! Our Annual Town Meeting was held in early April and there were 107 articles on the warrant. Only 23 of them were called for discussion and among those generating the most debate were the articles concerning extending the municipal sewer system along Nantucket Harbor (Monomoy and Shimmo) and in several Mid-Island neighborhoods. After much discussion, voters opted to amend the article to put the entire $41 million onto the general tax base rather than allocating a 25% betterment fee to those 500 homeowners who will now be required to hook into town sewer. The impact of this to the average residential property is $130.50 per year for the next 30 years, or $9.68 per $100,000 of assessed property value. Nantucket is currently under a mandate from the State Department of Environmental Protection to address the decline in water quality in our harbors which, among other causes, is related to the increased nitrogen loading from septic systems leaching into the harbor waters. The need to act now was largely driven by the availability of no-interest loans by the state. The Town’s $86.8 million municipal operating budget passed as recommended, as well as $2.6 million from the Community Preservation Fund towards affordable housing initiatives, historic preservation and open-space acquisition. There were 28 zoning articles, including one that would allow buildings of up to 40 feet in height (the current maximum allowed is 30 feet) in some locations which would enable the use of third story apartments. A “tiny house” article also passed that permits small homes (up to 500 s.f.) to be built on moveable trailers or foundations in certain zoning districts outside of the Old Historic Districts. These “tiny houses” would be subject to zoning regulations and required to obtain local regulatory approvals (HDC, Building Permits, etc.). They would also have to connect to Town water and sewer. Voters shot down an article that would have instituted term limits on most boards and commissions. There seemed to be a strong feeling that institutional island knowledge outweighs the need for fresh thinking. Voters also turned down an article that would have changed the Town Clerk from an elected to an appointed position.
Nantucket: Lot Prices 2001 - 2016 1st Q 2016
Avg Lot ($OOO)
Median Lot ($OOO)
2500
2378
2000
1915 1769
1483
1500
1434
1375 1258 1190 1100
1067 1000
970
1000 700 512
285
472 265
519
970
965
845
787
500
1130
1095
750
700
688
766
730 668
475
320
0 2001
2002
2003
2004
2005
2006
2007
2008
Page 3
2009
2010
2011
2012
2013
2014
2015
2016
O U R
C O M M U N I T Y : O U R
A G E N T S
One of the advantages of living in a small island community is that if one chooses to get involved, one can make a real difference in tangible ways. Here are a few examples of what some of us are up to with our volunteer efforts:
Ken Beaugrand is currently serving his 6th year as chair of the Community Preservation Committee (CPC), which is responsible for making recommendations to town meeting for allocation of funds raised by a 3% surtax on real property taxes, a percentage of which is matched by the state. According to the enabling legislation, a minimum of 10% of the funds must be allocated in each of the three categories: historic preservation, affordable housing and preservation of open space for recreational use. The CPC, after many hearings and deliberations, made their recommendations to the annual Town Meeting in early April which then passed with overwhelming support. Ken also currently serves as Vice President of the Nantucket Historical Association, the organization dedicated to telling the inspiring stories of Nantucket through its collections, programs, and properties. And, if that was not enough, Ken is the Chairman of the Board of the Nantucket Preservation Trust, a non-profit dedicated to preserving Nantucket’s historic architectural heritage for present and future generations. Alison K. Forsgren was a founding member of the Friends of Our Island Home (OIH is Nantucket’s only nursing home for the elderly). The vision of Friends of Our Island Home is to help reconnect Our Island Home residents with the Nantucket community, to foster relationships with individual residents and their caregivers, and to work with OIH staff to administer resources - in time, energy and money - for the purpose of supporting/providing programs, education, materials, equipment and activities which would otherwise be unavailable to these precious residents. Alison was also involved in one of the most exciting initiatives for the elderly and disabled, the Nantucket Wheelers program which matches up a passenger with a trained pedaler on a special bike. They then go out for a spin on the island bike paths and it is wonderful to see the joy on the faces of both as they explore the island! Mary D. Malavase, whom we affectionately call the ‘Queen of the Daffodils’, has been a member of the Nantucket Garden Club since 1988! She has become accredited by the American Daffodil Society as a judge. Mary travels, in the spring, around the country to many different daffodil shows. She currently serves as a board member of the ADS. Each spring Mary gets asked many questions about the early blooming daffys and whether or not there will be any left by Daffodil Weekend. She explains that there are early, mid-season and late-blooming varieties to insure that the show will go on! Thus, every year, the entries at the Nantucket Daffodil Show can be different, depending upon the weather. This year’s show will be held at Bartlett’s Farm greenhouse the weekend of April 29th. For more information: nantucketgardenclub.org.
Fertilizer = Harbor Degradation In 2013 new regulations went into effect on Nantucket to control the content and application of fertilizer containing phosphorus and nitrogen. The intent of the regulations is to improve and restore the quality of Nantucket’s water resources. It provides for a reduction of nitrogen and phosphorus into Nantucket’s waters and wetlands through an organized educational program, licensure and regulation of practices. Please make sure that you, or your landscaper, are using best management practices for fertilizer use. For more information: Guidelines for Landscape Fertilizer Use on Nantucket Island. Or you can contact the Nantucket Land Council at 508.228.2818 or nlc@nantucketlandcouncil.org.
What is a Comp? In real estate and appraisal lingo a “comp” is a recent comparable sale of a property (home, land or commercial). Agents and appraisers use comps to help accurately price property. A property’s condition, age, location, size and potential are the most important factors when making comparisons when searching for a comp. Here on Nantucket, comparable sales are a challenge since most homes are not similar and location values can vary significantly from street to street. Comps are easiest to find in neighborhoods like Nashaquisset, Naushop, Tristram’s Landing or Hummock Pond Estates where a defined number of homes were designed and built with similar floor plans and materials. In other neighborhoods on Nantucket it is more challenging to compare homes. For instance, in the historic district of Town homes tend to be one of a kind and unique. The same challenge applies when trying to compare the many highly customized homes built here on the island. Page 4
Wish You Were Here Has this ever happened to you? All your friends and family are away on fantastic vacations, and you are home sweltering in the summer heat. Now is the time to start thinking about where you'd like to be when that 'Wish you were here' postcard arrives in the mail. Nantucket was just named the World's Best Island by National Geographic. (http:// travel.nationalgeographic.com/travel/top-10/islands/) Whether you are looking for exquisite vistas unlike any other, world class dining and shopping or just a relaxing day at the beach, there is no better place than our little Grey Lady. As you may know, the end of July and the beginning of August are the busiest times and book up very early, but we are adding new rental inventory every day, including properties with turnover days other than Saturday (making it easier to get your car on the ferry). Alternately, a visit during the shoulder season will allow you to enjoy the island with more choices of where to stay, fewer crowds, and often, discounted prices. There are many festivals to enjoy in the spring and fall as well. Visit NantucketChamber.org for a list of events by month, including the Daffodil and Wine Festivals in May, and the Nantucket Film and Book Festivals in June. Nantucket is no longer just for that summer getaway. The fall is packed full with Cranberry Harvest, Halloween, Thanksgiving, Christmas Stroll and other festivities. Come check out our Faraway Island anytime of the year!
HOUSING BANK PASSES
O
n the last night of Town Meeting Article 82, proposing an affordable housing bank, passed with overwhelming support. The original article sought to levy a 1% transfer fee on the seller of any property on Nantucket over $2 million. The article was fashioned after the current Land Bank which charges a 2% transfer fee on the buyer of Nantucket property (with an exemption on the first $500,000 for first time buyers). The community feels that the Land Bank has done a great job acquiring open space but that the amount of land currently in conservation on island (nearly 60%) has had the unintended consequence of creating more pressure on the housing situation, especially for the year round and seasonal working populations. Article 82 was amended at Town Meeting from a 1% fee to a ½% fee and there is a “sunset clause” after 10 years. The Town Meeting would need to vote to extend the Housing Bank for an additional 5 years. The article is a Home Rule Petition which means that it will head to the state legislature as a bill. Nantucket has twice before passed similar initiatives only to have them fail to get out of the legislature. It does not help that well funded anti-tax lobbyists and organizations will fight any type of new transfer taxes at the state level, allegedly for fear that they will spread to other communities. One can make a strong case that Nantucket, being an island 30 miles at sea, with a seasonal economy and an average home price of $1.9 million is, in fact, different than the rest of the Commonwealth.
Attention Rental Owners! few things happen every spring (or don’t happen as they should and then are discovered when the first tenant arrives!) that can cause big issues if not properly addressed. Please make sure that your rental house has a thorough spring cleaning by a professional cleaning service (this means windows, rugs, upholstery, the grill, etc). Do an inventory of bed linens, pillows and towels and make sure that all are in good condition. Make sure to have the outside water, including your outdoor shower, turned on by a qualified person. If you have a gas grill that is not running off of your tank, it is a good idea to have more than one propane canister available. Tenants always seem to run out on a Sunday night and it is less expensive than paying your caretaker to deal with it. Set up your services and schedule with your cleaner, trash removal company and landscaper. If you have irrigation, make sure it is on. Have your caretaker check the air conditioning and conditions of your screens. One of the most frequent questions that we get from tenants is, “what is the Wi-Fi password?” It helps if you have a house book, left in an obvious place, with any relevant or helpful information about your home, including the Wi-Fi password, in a prominent spot.
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It is a very good idea for you to come and stay in your house late spring or early summer, before any tenants arrive, and try to view it as a tenant will. Please let us know if you need any recommendations for service providers. We have great contacts and know which are the most qualified and responsive. Please contact Erikka Perkins, or your agent, with any questions: Erikka@NantucketRealEstate.com. Page 5
Nantucket: Sales as % of List Price and Assessed Value 1st Q 2016
160%
150%
140%
130%
120%
110%
100%
90%
80%
70% Avg Sale as % of List price Avg Sale % of AV
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
91%
90%
90%
94%
93%
91%
93%
93%
90%
79%
82%
84%
88%
90%
91%
2016 96%
140%
121%
151%
135%
135%
152%
130%
114%
99%
95%
106%
89%
81%
139%
141%
137%
SHORTS Congratulations to John F. Trudel, III who was recently elected to a full member seat on the Nantucket Planning Board. The Planning Board is responsible for, among other things, implementation of the subdivision control law. John has been an agent with Atlantic East for three years.
Atlantic East is, once again, sponsoring the Nantucket Film Festival. The festival celebrates screen writers and the stories they tell through film. There is a very promising line up of films this year and it is one of our favorite events of early summer. The 21st Annual NFF will be held from June 22 - 27, 2016. For more information: nantucketfilmfestival.org. The Massachusetts Cultural Council (MCC) voted in January to approve the designation of the Nantucket Cultural District. Nantucket's arts and cultural community is worthy of distinction as visitors from around the world attest each year. The Nantucket Cultural District includes most of the island's primary historic downtown core, home to Nantucket's leading cultural institutions, municipal offices, and major public and private buildings. It is an essential element in preserving the cultural integrity of the island.
Atlantic East N A N T U C K E T R E A L E S TAT E Heidi Drew, ABR, RSPS, SRS 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, 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 1-800-228-4070
NantucketRealEstate.com Volume XII, Issue 2, Spring 2016