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We are thankful: to be on Nantucket all year long and have a front row seat to her changing seasons, for our agents and for the success of our business over the past 10 years. But, most of all, we are thankful to live in such a special place and to be able to actively participate in our community. After a whirlwind 2014, we are looking forward to what 2015 brings. And we are ready! Only twice in history has the real estate market on Nantucket exceeded $1 billion in property sales (in 2004 and 2005). Sales in 2014 were just over $1 billion, including foreclosure sales (of $11 million), an increase of a whopping 25% over 2013. The total number of sales was 528, compared to 468 in 2013, an increase of 11%. More importantly, the market is on more solid footing than it has been since the beginning of the recession. Properties are selling more rapidly, distressed sales now constitute a negligible portion of the total market and people are more confident about the economy in general. No wonder, given that the labor and housing markets have largely recovered, all 8.7 million jobs lost during the recession have been regained over the past 4 years and the majority of the country has seen growth in personal income. Interest rates remain low and the financial markets have been on an uninterrupted bull run for more than 1,100 days without a pullback as of the end of 2014. Add this to the fact that Nantucket is a rarefied market and it is easier to understand how we have rebounded from the recession. The average selling price of all properties (residential, land and commercial) on Nantucket was $1,915,000 by year end, an increase of 19.80% over 2013. The average selling price for residential property topped $2 million for the first time since 2008; the median price was $1,275,000, up 27.56%. Vacant land was selling, on average, for $1,291,000 and the median price was $780,000, an increase of 13.45%. There were 19 sales of commercial property in 2014 for just over $40 million, compared to $14.4 million in 2013. The robust real estate activity in the commercial sector is a very strong indicator of rising consumer confidence. Commercial rentals have become very difficult to find, especially Continued on page 2... downtown.
M A R K E T
N E W S
Property Inventory is Down: During the height of the recession, at the end of 2009, there were 488 properties listed for sale on Nantucket. Today there are 269, a 40% difference. It is largely because of the low inventory that investors are, once again, confident doing projects on a speculative basis. Margins Shrinking: In 2014 properties were selling, on average, for slightly over 95% of list price, a figure not seen in the past decade. Properties are now selling, on average, for 132% of assessed value. The last time this figure was over 130% was in 2006. What these numbers indicate is that there is an urgency in the current market that had been absent during the past 5 years. We had numerous situations this past year with multiple offers on the same property. And buyers have realized that the bottom of the market was prior to 2014. Are all of the Good Deals Gone? To answer this definitively would require clairvoyance but we can say, with confidence, that we will likely look back on 2014-2015 as good years to buy. There are still pockets of relative opportunity in the marketplace. One must evaluate specific reasons and time frames for buying on Nantucket and each situation is different. Average prices are still not as high as they were in 2007-8 when the average price of a Nantucket property was over $2 million. What Kind of Properties are Selling? There has been good activity in all price sectors this past year and those properties that are in updated and turn-key condition have been commanding a premium especially in locations such as Brant Point, Town, Siasconset and the Cliff areas. Features that continue to be important to buyers are proximity to the water, private pools and convenience to Town.
NANTUCKET SALES BY AREA 2014
Why Buy on Nantucket? Many of us clearly remember the feeling we got when we first stepped foot on Nantucket. There is a special “otherness� about the island that is hard to articulate. We recognize it when we feel it and apparently others do as well! It has something to do with the history, the vast accessible open spaces, the water and quality of light and, of course, the people who live here. There is no place else like Nantucket.
Page 2
Nantucket: Total # Properties Sold As of 4th Q 2014
600
500
400
300
200
100
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Total Homes Sold
239
302
361
468
398
284
341
211
205
309
297
375
357
423
Total Lots Sold
138
125
148
176
117
59
46
26
30
43
39
78
94
86
Total Commercial Sold
14
11
16
41
22
9
12
11
2
12
11
21
18
19
UPDATE ON HOUSING NANTUCKET PROGRAMS Year after year, the National Low Income Housing Coalition ranks Nantucket among the most expensive counties in the United States to rent a home. Despite earning decent salaries, many members of Nantucket’s work force are unable to secure adequate housing. Established in 1994, Housing Nantucket, is a private, 501(c)(3) organization whose mission is to create affordable housing opportunities for the Nantucket community. Those taking advantage of Housing Nantucket programs include health care professionals, Town employees, teachers, school staff, postal workers, airport personnel, tradespeople, laborers, retail workers, service workers, and non-profit employees. Housing Nantucket's Affordable Rental Program provides thirty units of mostly single-family dwellings in scattered sites around the island. These year-round rental homes are available for Nantucket residents in the low to moderate income range of the area median income. Most of these structures were acquired through house donation, where structurally sound dwellings are donated to the organization by private individuals. The buildings are relocated, rehabilitated and rented to income qualified year-round residents. As well as providing housing for those in need, many wonderful dwellings have been saved from demolition in this way. Income tax and estate tax advantages have encouraged many property owners to pursue house donation through Housing Nantucket's Relocatable Dwellings Program. The tax implications of a house donation will depend on the appraised value of the dwelling, financial circumstances, the tax rules in effect at the time, among other factors. The IRS limits the maximum annual charitable deduction taken against income. Generally, for a gift of appreciated property, the amount one can deduct from one's income in one year is limited to about 50% of adjusted gross income. If the value of one's gift exceeds that level, the excess may be carried forward for up to five years, applying the 50% limit each year. If you would like to explore this further we encourage you to contact Housing Nantucket and your accountant. Covenant Program: The Covenant Program provides ownership opportunities for those who qualify to purchase under the program guidelines. The program also benefits sellers who may be able to subdivide their property under the program when not permitted under conventional zoning guidelines. There are currently 55 covenant homes in existence. The 2015 max sales price is $674,931 (up from 2014 price of $626,721) and qualifying income is $139,200 (no change from 2014). Page 3
MANY HELPING HANDS Rather than write a laundry list of the more than 20 non-profit organizations our agents chose to support, both with their time and financially in 2014, we’ll outline the work the various organizations do. At Atlantic East a percentage of each sale is matched by the company and at the end of the year the agents choose the non-profit recipients. Work being done by some of the organizations we supported last year is in the following areas: feeding the hungry, leading edge cancer research, housing islanders, preserving and making accessible Nantucket’s history, cultural and recreational opportunities for islanders, caring for and improving quality of life of the sick and elderly, supporting local youth sports and education and providing holiday cheer for youngsters who would otherwise have to do without. As an office, we again had the opportunity to help the Inky Santa Toy Drive with sorting gifts for the program in mid-December. It was clear that a few hours spent by many helping hands does make a difference. Thank you to all who helped. And, privately, many of us continue to contribute to our community through volunteer work and by serving on many boards and commissions. Most recently Penny Dey was appointed by outgoing Governor Deval Patrick to fill the seat of the state representative to the board of directors of the Nantucket Housing Authority, a local non-profit dedicated to issues of affordable housing on the island. Nantucket: Sales as % of List Price and Assessed Value 4th Q 2014
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
91%
90%
90%
94%
93%
91%
93%
93%
90%
91%
91%
92%
94%
95%
140%
121%
151%
135%
135%
152%
130%
114%
99%
89%
97%
105%
113%
132%
READY FOR MY CLOSE UP We love all things FILM and are excited to be, for the first time, a business sponsor of the 20th Annual Nantucket Film Festival in June. We have been following, with great interest, the acting doings of Charlotte and Madeleine Ruley, children of broker Meg Ruley and her husband Bob. Ten year old identical twins Madeleine and Charlotte are fifth graders at the Nantucket Lighthouse School who like reading, knitting, lightship basket weaving, and storytelling. They have recently had several opportunities to work on various film projects. Last winter, the girls auditioned for a period film Peter and John. This movie project was an intriguing collaboration between film students and professionals as part of the Movies at Marlboro program. The girls were delighted to be cast as girls playing and especially excited that the movie was to be filmed on Nantucket in March and April. It was a special opportunity for them to be invited and included on a project in their hometown. They filmed for two days and three different scenes. The wardrobe was really fun. They can't wait to see the movie on the big screen on Nantucket in the spring of 2015. This experience led to other off-island film opportunities. This past summer they were cast as schoolmates in the made for TV film Wishin and a Hopin' which aired on Lifetime. In December, they worked on an independent short film The Quantified Self that was filmed near Hudson, New York (ironically this town was founded by Nantucket whalers). The girls play identical twin sisters, in a sci-fi thriller about a family that takes self-tracking to the next level. This movie will be submitted to film festivals all over the world. The girls hope that it will be submitted to the Nantucket Film Festival and eventually shown in their hometown theater. Madeleine and Charlotte have had a fun time making films and have learned a lot with each project they have worked on. They have always loved going to the movies and every year look forward to attending the Nantucket Film Festival. Thank you Atlantic East for the commitment to help celebrate 20 years of the NFF! See you at the movies! Page 4
A LOOK BACK IN TIME Unlike most towns in the United States, Nantucket Island had no formal regulations for the development of land. From the mid 1800's to 1920's some large scale grid style sub divisions were filed on the island without formal planning. Nantucket was slow to adopt any controls. Thankfully, many of the proposed sub divisions were never developed. In 1928 Nantucket voted to create a Planning Board to generate rules and guidelines for future development. Sadly, no one was ever appointed to this board. Years later, in 1951 at Town Meeting, zoning was proposed and was quickly shot down by over two-thirds of the voters. In 1966 a zoning committee was authorized and the first master plan was created 2 years later. Finally in 1972, zoning was officially adopted along with some other land use regulations. This adoption was a reaction to the Nantucket Sound Island Trust bill, also known as the Kennedy Bill. This proposed federal legislation was focused on turning Nantucket and Martha's Vineyard into a National Land Trust, much like the Cape Cod National Seashore. Many felt this bill was a federal “seizure� of the island. The bill did not pass, but it compelled Nantucket to move forward with an island wide Historic District Commission, the Conservation Commission and the Nantucket Planning and Economic Development Commission.
ELEPHANTINE SALES There were 30 sales over $5 million in 2014. Of those, seven were between $10 and 15 million and three were over $20 million. These types of properties take longer to sell (8 months) than the market average (6.5 months) because the pool of potential buyers is smaller. The top 3 sales were all residential properties located on the water. They were: 9 Kimball Avenue in the Cliff area for $27,160,000, 14 New South Road in Madaquecham for $21,500,000 and 33 Squam Road in Squam for $20,900,000.
Nantucket: Total Annual Sales Dollars 4th Q 2014
$1,200
$1,000
$800
$600
$400
$200
$0 Total Sales Dollars (000's)
2001
2002
2003
$452,913,000
$450,458,000
$613,765,000
2004
2005
$1,065,180,00 $1,186,885,00
2006
2007
2008
2009
2010
2011
2012
$917,238,000
$852,045,000
$574,274,000
$434,592,000
$694,253,000
$531,597,000
$809,846,000
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2013
2014
$748,866,000 $1,005,240,97
$3,000,000
Nantucket Real Estate
$2,500,000
2003 - 2014 YTD as of 4th Q 2014 $2,000,000
$1,500,000
$1,000,000
$500,000
$0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Median Lot
$320,000
$475,000
$700,000
$1,067,000
$1,375,000
$1,100,000
$700,000
$845,000
$970,000
$750,000
$688,000
$780,000
Average Lot
$519,000
$787,000
$1,190,000
$2,311,000
$2,378,000
$1,915,000
$970,000
$1,095,000
$1,769,000
$1,483,000
$1,258,000
$1,291,000
Median Home
$917,000
$1,150,000
$1,495,000
$1,550,000
$1,495,000
$1,425,000
$1,275,000
$1,100,000
$1,013,000
$1,050,000
$999,000
$1,275,000
Average Home
$1,297,000
$1,672,000
$2,164,000
$2,378,000
$2,103,000
$2,271,000
$1,945,000
$1,970,000
$1,528,000
$1,666,000
$1,726,000
$2,035,000
LIVING IN TOWN? PARKING CHANGES
A series of changes regarding residential parking permits (RPP’S) go into effect this year, including application dates and an increase in fees. The recommendations, adopted unanimously by the Board of Selectmen, took into consideration three things: better aligning application dates and fees with parking demand, “disincentives to increase the availability of on-street parking in the RPP District while minimizing or avoiding financial impact to year-round residents who live in the parking districts,” If a person lives in the core district of Town, they are eligible for 2 parking permits at $50 each if purchased between January 1-May 31. If the permit is purchased on June 1 or later the price will be $100 (it was formerly $75). The RPP allows unlimited parking in the 2 hour zones during the summer season. For more information, please contact your broker.
ATLANTIC EAST N A N T U C K E T R E A L E S TAT E Heidi Drew, ABR, RSPS 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; Jane Miller, ABR, RSPS; Erikka Perkins; Meg Ruley, ABR, RSPS Lisa Sherburne, ABR, RSPS; John F. Trudel III, SFR; Melinda Vallett; Christine Whelden, ABR; Gail Osona, Affiliate; Geri Walker, Office Manager
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 XI, Issue 1, Winter 2015