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AUTUMN One of our favorite seasons of the year is fall on Nantucket. The pace slows as visitors return to their lives off-island and most everything remains open well into the fall. The island is beautiful in September and October with incredible evening skies, the purple and orange of the changing moors, and a harbor with many fewer boats. There is lots to do in autumn on Nantucket: plenty of cultural events, a chance to catch up with friends, maybe scallop a little and recover from the pace of summer. As of the third quarter, the real estate market on Nantucket is performing much as it did in 2019, prior to the pandemic years. In 2019 there were 472 sales for the year; to date in 2023 there have been 232 with the largest number of closings yet to come in the last quarter of the year. A marked difference between now and 2019 is that sales dollars through Q3 were $662 million in 2019 and they are $822 million in 2023, a difference of 19%. Properties that are selling on Nantucket this year are selling for more than they have in the past. The high end is pulling the market along and we are experiencing the highest selling prices ever seen on Nantucket. There were only 3 sales over $10 million through Q3 in 2019; 7 in 2020; 14 in 2021; 16 in 2022 and 11 this year. Among other things, the pandemic years saw annual listing absorption of nearly 1.5 times the usual number of sales, leading to the current market with the lowest inventory seen in years. This created a lack of options for buyers and, coupled with the current interest rate climate (costing twice what it did to borrow a few years ago) has put a chill on the number of transactions. More than 85% of people in this country have a mortgage rate under 5% and are unlikely to sell soon if they need to obtain financing. Even if buyers do not need financing, many people are choosing to stay on the sidelines to see what happens with the Fed. Through Q3 last year, there were 327 sales: this year there 232 sales, a decrease of 29%. The dollars represented by these sales in 2023 was $822 million, Continued on Page 2... down 25% from last year at the same time.
MARKET NEWS (continued from page 1)
Total sales dollars were $2.3 billion in 2021 (the highest year ever), in 2022 they were close to $1.7 billion and this year we've closed $822 million in real estate sales on Nantucket through Q3. If historical patterns hold true, the year should end up just over $1.2 billion, slightly higher than in 2019, the last pre-pandemic year. The average price of a residential property on Nantucket is the highest it has ever been at $4,507,000 (+9%) and the median home price is $3,025,000 (+1%). However, the average selling price of vacant land is now $1,666,000 (-34%) and the median lot price is $1,250,000 (-26%). Nantucket typically averages around 500 real estate sales annually. The average sale price of a property (all sales) on Nantucket is now $3,541,000 (+1%) 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 nearly 30% since 2019 and prices are holding in residential sales. As is usual, the largest number of sales through Q3 were in Town (48), followed by the Mid-Island (47), Sconset (21), Cisco/Hummock Pond (14) and Miacomet with 12. There has only been one sale each in Pocomo, Quaise, Quidnet, Shawkemo, Tuckernuck, Wauwinet and West of Town. There have been no closings as of Q3 in 2023 in Fisher's Landing, Madequecham and Squam. The average time on the market (all properties) is the same as it was in 2022 – 5 months. The average selling price, as a percentage of list price at the time of sale, slid from 94% in 2022 to 91% in 2023. Properties are now selling for 154% of the assessed value, down from 181% in 2022. Today, there are only 2 listings under $1 million on Nantucket – both of them small vacant pieces of land. There are only 10 single family homes listed for under $2 million. The average price of listed properties is $6.4 million (45% higher than the average selling price of $3.5 million). This is a market with extreme new challenges for the island. We look forward to seeing what the final quarter of the year brings.
2023 Sales by Price Sector, as of Q3 Under $500K (all covenant)… Over $10M 11
Under $500K (all covenant) $500K-$1M 20
$7-$10M 11
$500K-$1M $1-$2M $2-$3M
$5-$7M 26
$3-$4M $1-$2M 51
$4-$5M 13
$4-$5M $5-$7M $7-$10M Over $10M
$3-$4M 27
$2-$3M 47
Page 2
Nantucket: Home Prices As of Q3 2023 5000 Avg Home ($OOO)
4507
Median Home ($OOO)
4500
4143 4000 3436
3500 3225
3000
3025
2022
2023
3000 2615 2500
2378
2276
2271 2124
2103 1945
2000 1550 1500
2133
1100 970
1750
1726
1528
1425
1000
2434
1970 1666
1495
2588 2440
2373
1400
1013
1050
999
2011
2012
2013
1525
1525
2015
2016
1600
1670
500
0 2006
2007
2008
2009
2010
2014
2017
2018
2019
2020
2021
NEW WELL WATER TESTING RULES The Nantucket Health Department is leading the way for Boards of Health across the Commonwealth by incorporating the most stringent PFAS testing requirement in the state into its new Private Wells Regulations; Chapter 386. What are PFAS? in simple terms they are potentially toxic chemical substances that can leak into the ground and cause serious health issues. In September 2023, the Nantucket Board of Health adopted updated Board of Health Regulations for Private Wells, Chapter 386. The new regulation includes private well testing for specific Per-and polyfluoroalkyl substances (PFAS), as recommended by MassDEP, EPA and the MA Department of Public Health. The Board of Health staff worked with Massachusetts Department of Environmental Protection (MassDEP) Drinking Water Program to update their existing municipal regulation governing private wells. During this regulatory review, the Health Department incorporated language from the public comment period, the MassDEP Drinking Water Program Model Board of Health Regulations for Private Wells (Massachusetts Department of Environmental Protection), and the MassDEP Private Well Guidelines. This updated regulation will be used by the BOH to regulate private wells used for drinking water and irrigation purposes. The regulations, which go into effect January 1, 2024, include the addition of a well testing requirement for PFAS prior to the transfer by sale of a property with a private well and for all new well permits. Complete regulations can be found on our web site, www.NantucketRealEstate.com. Page 3
CHANGING REGULATIONS AT THE CON COMM? The job of the Nantucket Conservation Commission is to enforce the state and local Wetlands Protections Acts. The commission is a seven-member board appointed by the Select Board, who volunteer their time. They permit, regulate, or prohibit any activity that alters an area or adversely impacts an interest subject to protection under the Bylaw. Based on available information, the Commission has determined that, generally, maintenance of a twenty-five-foot undisturbed vegetative buffer zone and a fifty-foot structure-free buffer zone will serve to protect most wetland resource areas from adverse impacts related to development elsewhere within the buffer zone. A wetland is not always “wet” but, rather, may be determined by the type of vegetation in a particular area. The Con Comm recently brought forward more restrictive wetlands regulations, which would have significantly increased the protected buffer zones. The commission has put the brakes on their proposal in order to allow time to gather additional information and to better understand the impacts of such changes.
$5,000,000
Nantucket 2010-2023
$4,500,000
Average and Median Prices YTD 9.30.23 Residential and Land
$4,000,000
$3,500,000
$3,000,000
$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
2021
2022
2023
Median Lot
$845,000
$970,000
$750,000
$688,000
$730,000
$668,000
$800,000
$660,000
$920,000
$975,000
$975,000
$1,100,000
$1,700,000
$1,250,000
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
$1,437,000
$2,519,000
$1,666,000
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
$2,588,000
$3,000,000
$3,025,000
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
$3,423,000
$4,143,000
$4,507,000
The Story on Vacation Rentals With the height of the pandemic behind us (we hope), now is a good time to take stock of the fluctuations that resulted in the rental market. We have been referring to 2019 as the last 'normal' year for rentals, but it was actually down from the previous several years. Obviously, 2020 bookings took a big dip because of the uncertainty in the world. Things bounced back in a big way in 2021 reflecting people's desire to get back to life (and out of their houses!). Since then, we have seen a steady decline in the number of bookings while dollar amounts have stayed steady. What does that tell us? Many homeowners took their homes off the rental market during the COVID years, so we have seen a reduction in the number of homes available for rent. As a result, the remaining inventory has increased in price to accommodate the changing market. We have also heard, anecdotally, that many people traveled to Europe this past season because their dollar goes farther there than here on the island. The rental market on the island has proven to be cyclical in the past so it's not surprising that we are now seeing a slight uptick in bookings this fall over the last couple of years. Exchange rates may vary, but the beauty and draw of the island doesn't. It remains to be seen whether the trajectory of this year's bookings will continue to grow or if activity wanes due to higher prices. If you are interested in traveling to the island next summer, be sure to book your vacation rental before the Steamship Authority opens its 2024 reservations in January. Reach out to your favorite Atlantic East rental agent today. Page 4
SHORT TERM RENTAL ARTICLES 101 At the most recent Nantucket Annual Town Meeting, it was voted to establish a work group to identify specifically what issues need to be addressed, gather information, evaluate data, and produce some action items for a fall town meeting regarding shortterm rentals on Nantucket (now known as STR's). The Short-Term Rental Work Group was formed one year ago and the nine volunteer members have spent hundreds of hours meeting, doing research and gathering public input. One of the requirements for the group was that anything brought forward had to have consensus support from at least 7 of the 9 members. Ultimately, the group was successful in coming to agreement and 8 of the 9 members voted to support the articles for the Special Town Meeting on November 7, 2023. The only dissension was from the one member representing ACK-Now. The articles are a combination of general by-law changes and zoning and they are linked together. The main features of Article 1 (general by-law, requires a majority vote) are: It protects existing properties for the purposes of STR renting if the owner can submit proof that the structure has been issued a certificate of occupancy prior to November 7, 2023. After that date, a property that is sold is no longer protected, and new structures after that date are not protected. It allows owners who STR to have up to 9 changes of occupancy in high season (July and August). An owner may operate multiple STR's if all are protected. If your property is not protected as an STR you can have only 4 changes of occupancy during July and August, an owner may operate only one STR and no corporations may operate an STR. Only corporations whose properties are protected will be allowed to STR. And no STR's will be allowed in deed-restricted units or an apartment or townhouse unless they meet the requirements for protection. The main features of Article 2 (zoning, requires a 2/3 majority vote) are: It would establish STR's as a primary use under zoning - but only if the STR obeys all of the regulations set forth in Article 1. Which will stop the lawsuits being brought on the basis that renting one's private home is a “commercial use in a residential zone.” It is important to understand that if either Article 1 or 2 does not pass, neither article will go into effect, unless this is amended on the floor of the Special Town Meeting. Please attend STM to make your vote count.
RENTAL REGISTRATION: STATE AND LOCAL If you have been renting your home since 2019 you have already gone through the process of registering with the state of Massachusetts. If you are new to renting and need help with registration, we have a step-by-step guide to aid in the process. If you are planning to rent for only 14 days or less in 2024, you will need to file for an exemption with the state by January 15, 2024, in order to be exempt from collecting the rental tax. There is no fee for owners to register with the state. Nantucket’s Town Meeting voted in legislation that requires homeowners who rent on a short-term basis (32 days or less) register in the Nantucket Rental Registry. After months of false starts, the Town fired the original outside contractor who had been hired to develop and administer the registry. The Town, with input from industry professionals, is in the process of hiring a new vendor and anticipates that the local registry will be operational by early 2024. There is a $250 annual fee to be paid by the homeowner for registration. We will keep you informed about when it is ready and how to use it. The hope is that the local registry will provide the basis for the Town to track and fine those properties that are not in compliance with local regulations (occupancy, parking, noise, etc.). It will be helpful, after years of anecdotal guessing, to have some hard data on nuisance properties. We believe that the number is far lower than has been posited. Page 5
Nantucket: Total # Properties Sold As of Q3 2023 YTD (Residential Houses, Land and Commercial) 600
500
400
300
200
100
0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total Homes Sold
284
341
211
205
309
297
375
357
423
394
445
379
359
320
516
522
322
159
Total Lots Sold
59
46
26
30
43
39
78
94
86
98
74
73
94
67
88
144
90
30
Total Commercial Sold
9
12
11
2
12
11
21
18
19
22
12
14
14
19
17
41
13
12
Behind the Scenes Atlantic East is proud to have supported the Race for Recovery in late September. Our Broker, Lisa Sherburne did the run and has also just completed a full marathon in Lawrence, Mass., which is a qualifier for the Boston Marathon. Funds raised support Dr. Lepore’s programs to help those dealing with addiction. Penny Dey produced and directed a short documentary that was entered in the Nantucket Shorts Festival, sponsored by Nantucket Community Television. The film, called “Lost in Nevers Land”, tells the story of the disappearance of Dr. Margaret Kilcoyne, from ice-bound Nantucket island in 1980. Penny has an interest in telling Nantucket stories through film so that they are not forgotten. The film won the “Audience Favorite” award. Congratulations to Vivian Crosby, aged 10, who won the award for Best New Filmmaker for her first film “Contemplating”!
Atlantic East NANTUCKET
REAL
ESTATE
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, Office Assistant We believe in doing one thing and in doing it well! 82 Easton Street Nantucket MA 02554 508.228.7707 NantucketRealEstate.com
Volume XIX, Issue 4, Autumn 2023
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