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HAPPY SUMMER! The summer of 2022 feels like the first “normal” summer in a long time. People are happy to be on Nantucket and (mostly) free of the constraints of the pandemic. June was a beautiful month on-island and the roses seem more plentiful and vibrant than ever before. We are enjoying being outside and once again seeing new and old friends. With the first half of the year in the books, we can now state with confidence, that 2022 is tracking much closer to 2019 than to 2020 or 2021, the two years that were largely impacted by the pandemic. No surprise as those years are now looking like the outliers. In the five years prior to COVID, the number of sales on Nantucket averaged 550 per year. In 2020 there were 679 sales and in 2021 there were 825 sales, over 30% above the 5-year average. Through Q2 this year there have been only 228 sales. This 36% decline in the number of sales from last year is due largely to the lack of inventory. The average sale price on Nantucket in 2019 was $2,150,000, in 2020 it was $2,792,000, in 2021 it was $2,832,000 and year to date in 2022 it is $3,135,000 - an astounding 31% increase over 2019. Prices are still on the rise but there are some signs of softening. The average price of a residential property on Nantucket is $3,913,000, up 11% from 2021. The median home price is $2,800,000, an increase of 8% over last year. The average price of a vacant lot is $2,339,000 (+63%!) and the median is $1,415,000 (+29%). There have been only 9 commercial sales in the first half of the year compared to 41 in all of 2021. There is no question that the lower numbers for commercial sales are being driven by the lack of listings. The bottom of the market continues to escalate rapidly: last year there were 37 sales $500,000 or less; to date this year there have been only 7, most of them vacant land in the Mid-Island area. Continued on Page 2...
Nantucket: Home Prices As of Q2 2022 4500 Avg Home ($OOO) Median Home ($OOO)
3913
4000
3436
3500 3225 3000
2800 2615
2500
2378
2276
2271 2124
2103 1945
2000 1550 1500
2434
2133 1750
1726
1528
1425
1525
1525
2015
2016
1600
1670
1400 1100 970
1000
2440
2373
1970 1666
1495
2588
1013
1050
2011
2012
999
500
0 2006
2007
2008
2009
2010
2013
2014
2017
2018
2019
2020
2021
2022
MARKET NEWS (continued from page 1)
For the first time in memory, the average time a property is listed for sale on Nantucket is only 5 months. The average selling price, as a percentage of list price at the time of sale, is now 96%. The average sale price, as a percentage of assessed value is 176%. Value is established by a variety of factors including location, pricing, property condition, potential and motivation level of the seller. A number of properties currently listed are clearly testing the market with their pricing strategy. Properties in the highest demand are those that are in new condition, with some outdoor living space and a pool, or those with access to the water. The least expensive residential property currently on the market is a 3 bedroom, 2 bath attached home in Madaket listed for $899,000. The most expensive is a waterfront estate in Monomoy listed for $56 million. There are only 10 land listings right now. The least costly is a 1/4 acre in the Hummock Pond area for $1,295,000; the most expensive piece of vacant land is 5.25 acres in Shimmo with good harbor views listed for $21,500,000. The average price of a listing on Nantucket right now is $6,621,033; the median price is $3,995,000. In the bigger picture, economic volatility and uncertainty continue with inflation at a 40-year high, shortages in the labor market and on-going supply chain disruptions. Consumers and businesses will continue to feel the pressure of rising costs. The Fed has instituted numerous rate increases in order to slow economic growth and we anticipate more before the year is over. The year-to-date bumpy ride in the stock market is expected to continue. Consumers and businesses will likely continue to feel the pressure of rising costs. Stay tuned for more about how Nantucket real estate fares.
Page 2
2022 Annual Town Meeting Round Up Annual Town Meeting (ATM) was held in May inside the high school auditorium (as usual) with the overflow accommodated in the gym. At one point early on the first night there were 920 people in attendance. The meeting lasted two long nights. Sarah Alger, Moderator, as she always does handled the meeting with grace and good humor. Below is a summary of articles of note: Article 8 was the General Fund Operating Budget. The article sought $104,523,366 to run the Town for FY 2023 and it passed overwhelmingly. Article 10, General Fund Capital Expenditures also passed, adding another $36 million. Harbor Master Building: ATM voted $2,000,000 in supplemental funding to replace the Harbor Master Building on Washington Street. This still has to pass as an override at the ballot. 10-12 Washington Street: The meeting voted to appropriate the funds ($4,750,000) to acquire by purchase, gift, or eminent domain, the transportation center, known as the Greenhound Building. Affordable Housing Capital Expenditures: This article was sponsored by the Select Board in an effort to give them more flexibility when acquiring real estate for employee housing. Ten million dollars was approved, subject to an override at the ballot. Short-Term Rental Regulations: There were 3 articles on the warrant – Articles 39 and 42 were sponsored by the Planning and Select Boards and Article 43 was sponsored by a representative of Ack-Now. Article 39, which put the framework in place to start identifying short-term rentals and putting in place regulations to deal with nuisance properties, passed by a large margin. The other two articles, which had been more controversial, were tabled and sent back to the Select Board, the Planning Board and the Finance Committee to form a committee with broad representation from the community to come up with suggestions for by-laws based upon factual information. The Short-Term Rental Committee is in the process of being formed. As of this writing, the Nantucket Association of Real Estate Brokers has only a non-voting seat on the proposed committee. This seems odd given that we are on the front lines of orchestrating short-term rentals and have the most accurate real data. Our main concern is that any regulations in the future be based on hard, factual information and not a falsely created narrative. 2022 Sales by Price Sector, as of Q2 Under $500K (all land) 7
$7-$10M 6 Over $10M 11
$5-$7M 16
Under $500K (all land) $500K-$1M $500K-$1M 28
$1-$2M $2-$3M
$4-$5M 17
$3-$4M $4-$5M $5-$7M
$3-$4M 22
$7-$10M $1-$2M 61
$2-$3M 41
Page 3
Over $10M
House, Cottage, Tertiary! Demand for Covenant homes is at an all-time high given the current market pressures. At the 2022 Annual Town Meeting there were two significant changes regarding tertiary, or third, dwelling units. The first is that voters approved an increase in square footage from 650 s.f. up to 900 s.f. of gross floor area (not ground coverage) for a tertiary unit. The second, which should have far reaching impacts for local people, was that voters approved the right to have two Covenant lots PLUS a market rate lot in certain zoning districts. This will allow large lots (R-40, LUG-1, LUG-2, and LUG3) to subdivide into two Covenant lots and one market rate lot. The addition of a tertiary lot provision to the Bylaw will provide another opportunity for the creation of Nantucket Housing Needs Covenant lots, without adding additional density or ground cover. The Planning Board felt it important to introduce this concept in districts with larger lot sizes where there is ample room for parking. The secondary lot provision of the Bylaw has been successful in creating yearround income restricted dwelling units and this proposal will provide another option. These bylaw changes still need to be approved by the Attorney General but could be available as soon as late this summer.
BONUS SHED On Nantucket, each property (unless otherwise restricted) is allowed to have a shed that does not count towards the ground coverage allowance. Each of the zoning districts has different ground coverage limitations, ranging from 50% to only 3%, depending upon where the property is located. Generally, the larger lots have a lower percentage of allowable ground coverage. Pools, decks, and porches (unenclosed) do not count as ground coverage. The shed must be less than 200 square feet on the ground. For instance, a 15'x12' shed is 180 s.f. or a long, skinny shed could be 10'x20'. The key is that it must conform, of course, to all other requirements such as setbacks and it cannot be anything other than a shed. It cannot have plumbing, and it must not be for human habitation. As you might imagine, we have seen some pretty fancy "sheds" recently - disguised as pool cabanas, garages, workshops, studios and bunkhouses - none of which are permitted under zoning and the building code as sheds. Please remember that any structure on Nantucket is subject to approval by the Historic District Commission and the Nantucket Building Department, including sheds. For more information, please contact your architect/designer or the Nantucket Building Department.
Bits and Pieces Become a member of Nantucket Community Sailing and get free rentals and discounted lessons at the Jetties Sailing Center. Members have free access to sailboats, kayaks and stand-up paddle boards. Seasonal memberships start at $400 (for Silver Sailors!) and if you join, you also get a 25% discount on private lessons! This is a good way to support a worthy local non-profit and learn new skills or hone some old ones. For more information: Nantucket Community Sailing 508-228-6600. Swim Across America: the Nantucket swim raises funds (goal on Nantucket is $500,000 this year) for cancer care and treatment on Nantucket so that patients can minimize off-island travel. All of the funds raised stay on-island. Congratulations to Atlantic East Broker Lisa Sherburne who has been diligently training for her 1 mile swim on July 23rd. We will be cheering her on! The Story on Moorings: the mooring fields in Nantucket’s harbors are a perfect example of a situation with limited capacity. Only so many can fit without causing serious damage. Misinformation continues to circulate about getting a mooring in one of the harbors. Moorings are not transferable when a property sells. The Harbor Master maintains a waiting list which, at this time, is some hundreds of people long. Please contact her office directly for more information. Page 4
Why are Property Taxes so Low on Nantucket? People are often surprised to learn that property taxes are lower on Nantucket than in many other mainland communities. This is due to the seasonal economy in which non-resident taxpayers (those who own but do not live here all year-round) pay most of the property taxes on Nantucket (close to 82%). Additionally, Nantucket does not have to provide municipal services at the same level in the off-season as we do during the summer months when the island is at it's most crowded. Those of us who live here year-round directly benefit from this. The Town has published the property tax rates for 2022. Residential: $3.74 per $1,000 Open Space: $3.53 per $1,000 Commercial: $6.40 per $1,000 In addition, locals also benefit from a year-round residential exemption which is $541,019 in 2022. This translates into a savings on $2,023.41 on a year-round property tax bill. Among other things, property taxes on Nantucket fund local government, the schools, police and fire departments and some maintenance of infrastructure.
Sales by Area As of Q2
Wicked Good Rentals This rental season started out like gang busters. There was a frenzied pace during last fall and early winter of 2021 with tenants seeking rentals for the 2022 season or to re-book current rentals for next year. However, as we moved through winter and into spring, the demand waned, and we started to see some cancellations. This has created an unexpected opportunity for those who were unable to book anything previously. One commonality we are seeing in available rentals is homes that are offering one two-week, tax-free period. Not only does this save the tenant from paying the 11.7% rental tax on top of the rent, it may also offer tenants their pick of turnover day which can be extremely helpful when securing boat reservations. Now that we are well into the season, homeowners have become more flexible on the duration of stays as well. We currently have availability ranging from an immaculate 2 bedroom cottage to the west of Town ($4,400 per week), a 3 bedroom pet-friendly home with pool in the Mid-Island area ($13,000 per week), up to an historic house in Town, fully restored and professionally decorated with 5 bedrooms ($32,000 per week). If you are considering a trip to the island, please contact your favorite Atlantic East agent today to inquire about your Nantucket vacation. Page 5
Nantucket: Lot Prices As of Q2 2022 Avg Lot ($OOO) Median Lot ($OOO)
2500
2378
2000
2339
1915 1769
1756
1521
1483
1500
1453
1437
1375
1415
1258 1130
1095
1100
1067 1000
1100 1027
970
970
1000
965
845
800
750
700
688
975
920
975
811
730 660
668
500
0 2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
OPEN THE DOOR Open the door to Nantucket real estate! The Nantucket Association of Real Estate Brokers (NAREB) has recently updated the buyer’s guide to purchasing and owning a property on-island. The new booklet is called Open the Door (to Nantucket Real Estate). It is chock full of useful information about many island things including “where does the water come from”, closing costs for buyers and sellers, real estate agency laws, property taxes, town and state departments that are here to help residents, the landfill, the Land Bank, the home inspection process and many others. The publication will be available on-line shortly. In the meantime, if you would like a printed copy please contact your Atlantic East agent.
Atlantic East NANTUCKET
REAL
ESTATE
Penny Dey, GRI, ABRM and Heidi Drew, ABR, RSPS, SRS, Broker/Owners Ken Beaugrand; Linda Bellevue, GRI, CBR; Peter DuPont Alison K. Forsgren, SRES; Angel Conrad Frazier; Mary D. Malavase, GRI, ABR, RSPS, SFR; Jane Miller, ABR, RSPS Erikka Perkins; 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 XVIII, Issue 3, Summer 2022