N
A
N
T
U
C
K
E
T
N A N T U C K E T
W I N T E R From us to you: best wishes for a happy and healthy 2020! Somehow the turning of a decade makes us even more reflective than usual. We are so grateful to call Nantucket home and to get to experience the many facets of our island community throughout all four seasons. Nantucket in the winter is a very different place. There is a stark beauty in the winter, coming and going become more challenging. We are truly all in the same boat and we get to be more mindful of what really matters. This new year, in particular, seems a time of new starts and possibilities. The real estate market on Nantucket was somewhat unpredictable for most of 2019 with some significant drops in both the number and dollar volume of sales during the first half of the year. The good news is that the market seems to have rallied somewhat during the last two quarters of 2019. There were 472 sales (-13%) for $1,027 billion (-15%) in 2019. This is the sixth year that total sales on island exceeded $1 billion (not consecutive). The average sale is now $2,177,000, compared to $2,214,000 at the end of 2018, a decrease of only 2%. Properties are currently selling, on average, for 89% of the list price at the time of sale and for 120% of the assessed value. The price of an average home on Nantucket is now $2,481,000, down 5% from $2,615,000 in 2018. The median price of a home is now $1,670,000, compared to $1,750,000 last year. The average price of a vacant lot on Nantucket is $1,453,000, down 17% from 2018, and the median lot is $975,000, down 6%. Commercial sales were strong in 2019 with 19 properties selling for a total of $77+ million, a 31% increase over commercial activity in 2018. One of the most significant changes is the length of time it takes to sell a listing in the current market. As of the end of 2019 the average time on the market was 10 months (up from 9 months in 2018 and 8 months in 2017). As always, there are a number of factors involved including optimistic pricing by sellers, ample inventory, lack of urgency on the part of buyers and a generally unsettled feeling about the economy and the future. Simply put, it is taking longer for properties to sell on Nantucket. Continued on Page 2...
M A R K E T
N E W S
As of the end of the year there were 286 active listings, compared to 321 in 2018 and 266 in 2017. The average listing price is $3.6 million, and the median listing price is $2.6 million (higher than the average selling price) and the average time on market is 264 days. There are currently 211 single-family residences for sale, 43 parcels of vacant land, 10 condominium properties, 16 commercial properties, 5 multi-family and only 1 covenant house (restricted affordable in perpetuity). Single family homes range from $449,000 to $25 million. There are only 9 single-family homes on Nantucket listed under $1 million. Vacant land ranges from $330,000 to $7.5 million. There were only 17 sales under $500,000 in 2019 and most of those were designated affordable. The most active price sector last year was $1-$2 million with 162 sales. This was followed by $500,000-$1 million with 113 sales; $2-$3 million with 71 sales; $3-$4 million with 46 sales and $4-$5 million with 23 sales. Between $5-$7 million there were 16 sales and there were 12 sales between $7-$10 million. Lastly, there were 5 sales in excess of $10 million on Nantucket in 2019. After a bumpy start to the year, the US economy experienced moderate economic growth in 2019 with continuing low unemployment (3.5%), low interest rates and easing trade tensions. The US Central Bank has signaled that it could keep interest rates unchanged through 2020 after reducing borrowing costs three times in 2019. In mid-summer the yield curve inverted back, helping to boost consumer confidence which, in turn, impacted market performance. Consumers appear set to continue driving the economy and a bullish stock market and, despite the fact that it is a presidential election year, 2020 looks to be similar to 2019.
2019 Nantucket Sales by Price Range (in 000's as of Q4) 180 162 160 140 120
113
100 80
71
60 46 40 20
23
17
16
12 5
0 Under $500K
$500-$1,000
$1,000-$2,000 $2,000-$3,000 $3,000-$4,000 $4,000-$5,000 $5,000-$7,000 $7,000-$10,000 Over $10,000
2020 Covenant Program Updates The maximum sales/resale price for a Nantucket Housing Needs Covenant property is now $824,401, an increase of 6% over last year’s maximum price of $775,973. The qualifying income cap has been raised to $175,200 with unrestricted assets less than $412,200. The formula on which these changes are made annually is based upon the median family income for Nantucket ($116,800) and long term interest rates (4.25%). When the program was started in 2003 the maximum sale price was $406,162 and the qualifying income was $102,750. Housing Nantucket oversees the program and there are now 87 homes (housing 229 people) that are restricted in perpetuity for islanders who qualify. Housing Nantucket also runs an Affordable Rental Program in 38 scattered site units (housing 103 people) and offers first time home buyer courses in both English and Spanish. For more information contact them at 508.228.4422 or at www.housingnantucket.org. Page 2
Nantucket: Home Prices As of Q4 2019 2615 2481
2500
Avg Home ($OOO)
2378
2373 2276
2271
Median Home ($OOO)
2164
2124
2103 1970
1945
2000
1672
1670 1600
1528
1495
1500
1750
1726
1666 1550
2133
1525
1425
1525
1400
1297 1150
1000
1190 1100 1013
970
917
1050
999
500
0 2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Unintended Consequences The deadline has come and gone for citizens to submit articles for consideration at this years Annual Town Meeting. A total of 57 articles were submitted by engaged community members and, as is often the case, some of them have unintended consequences. An article was submitted that would have changed zoning to DEDUCT from the total square footage of a property that area that is currently defined as the setback areas, thereby significantly reducing allowable ground coverage. A proposed zoning article has the effect of freezing, from the initial date of publication which, in this case, was January 3rd, 2020, the issuance of any new building permits until the article has been voted upon and enacted by the state. In the case of this article, what it meant was that many people who were already in the queue for a building permit would have had to wait for months to start building. The sponsor of the article decided to withdraw the article and it may be brought back in another form in the future. Another article on the warrant would extend the time from 60 days to 1 year before a structure can be removed from a lot. This could create the same permitting and scheduling log jam as the setback article.
Are You Feeling the Impact? With the advent of the short term rental tax in 2019 it is time to look back to see how it has impacted the market a year later. The bill, commonly referred to as the Air bnb bill, did not create a new tax on short term rentals, rather it subjected short term rentals to the existing room occupancy excise tax that consumers were already paying on hotels, inns and motels. The real estate lobby successfully fought the tax for at least 15 years, and as a result, Massachusetts was one of the last states to adopt it. According to the National Association of Realtors only Nevada, Delaware, California and Alaska have not adopted some sort of state excise tax on short term rentals. A slight softening in the 2019 market is likely push back as a result of the tax, however, consumers are sure to realize that no other vacation destination can replace our special island. On Nantucket the rental tax paid by tenants is currently 11.7% of the rental amount. If you are a homeowner who has seen a decrease in activity, you may consider a small reduction in your rental rate. This will help to offset the additional expense of the tax. Multiple homeowners have tried this with great success. Tenants feel less targeted by the tax when homeowners are willing to share the burden. Page 3
Wastewater Management Plan on ACK Nantucket has a Comprehensive Wastewater Management Plan (CWMP), approved by the state, to guide how we handle wastewater for the next 20 years. The major goal of the plan is to ensure that our waters are clean and to develop solutions to address water quality island-wide. We can measure the health of our harbors, ponds, creeks and estuaries by the creatures and flora that live in them. One example, in Nantucket and Polpis Harbors, are the scallops that depend on healthy eel grass to survive. If the eel grass is dying off because of pollution in the water then the scallops cannot survive. Compromised water resources impact us all. Nantucket depends upon our water resources for drinking water, public health, tourism, fishing, boating, swimming, recreation and livlihoods. A major cause of water pollution on Nantucket is nitrogen. Nitrogen is in our septic systems, fertilizers and storm water, all of which drain into our groundwater, which then flows into our harbors, ponds, creeks and estuaries carrying the pollution with it. One effect of too much nitrogen is that it causes excessive algae blooms which limit sunlight through the water and kills off eel grass. The Nantucket Select Board and Town Administration are committed to preserving and protecting Nantucket’s water resources. The CWMP update outlines plans to extend town sewer, manage/reduce fertilizer use and contain stormwater where possible in order to stop the flow of harmful nutrients. For more information please check out the CWMP, available at www.nantucket-ma.gov/259/Wastewater-Action-Plan.
A Few Of Our Favorite Things We are often asked “What do you do in the winter?”. Which makes us ponder what it is that we like about living on Nantucket all year long, even in the winter. One of our agents put it so well: “Living on island year round gives you two extremes. We live in a place that people run to in the summer months and our population swells to over 60,000. What is better than to live where other people want to be? I think what most people don't know is how nice it is here come the winter months. These months are necessary to those that live here year round. It gives us time to slow down and recharge our batteries for the upcoming year. I think what I really enjoy about Nantucket winters is getting back in touch with those people who live here full time and see how things are going in their lives and in the community. In the summer things are too busy to actually do that. It just might be the winter months that make me stop and realize what a beautiful place I live in.” More things that we like about living on Nantucket in the winter: No lines at the Stop and Shop and the social aspect of getting groceries – you know so many people in the winter that you always see someone to stop and chat with. Walks at the bogs and the beach, bike rides and runs at Sanford Farm. The peace and quiet and lack of snow and when the wind blows and kicks up the ocean. No need for dinner reservations. Enjoying fresh scallops, the solitude of a beach with no one but seagulls around, knowing everyone at the drug store lunch counter, post office and church. Knitting and making baskets. Planning with island non-profit boards for the upcoming season. Time to watch movies and try new recipes. Enjoying our role as island caretakers until our summer residents and visitors return. There are lots of things to love about Nantucket in the winter….the crisp clarity of the nighttime winter sky is incredible for star watching, shooting stars and various constellations. The ability to be spontaneous – one is able to run to the supermarket, park, shop and be back home in minutes if you have a sudden craving for homemade brownies or stew. Walking – everywhere – poison-ivy free woods, collecting shells in windswept Dionis, the icy shoreline of Madaket Harbor, watching seals and birds from the 'Sconset Bluff and running into friends everywhere that actually have time for a little “chinwag”. Town Meeting in late winter, time to make music or movies and the variety of weather conditions from sodden gray days to howling storms. We appreciate the sun more when it doesn't shine every day. These are a few of our favorite things. Page 4
H20 on Nantucket (GOOD) Drinking water on Nantucket comes from two fresh water underground aquifers, located deep beneath the island. Rainfall naturally recharges the aquifers and Wannacomet Water Company draws substantial quantities of water from two public wellfields to supply the island. There are two large water towers for storage, one on Washing Pond Road and the other off of Milestone Road. ‘Sconset has its own water supply and water tower. In 1984 the Environmental Protection Agency designated Nantucket as a sole source aquifer, prompting guidelines for better management and protection of our water supply. According to water company officials, there is plenty of water for the island; it is the quality of it that we must protect. Because Nantucket has coarse sandy soil conditions, rainfall can easily filter through to the aquifers. As more development occurs, creating more impervious surfaces, there is also the potential for pollutants to reach our ponds and harbors as well as our water supply. Wannacomet Water Company has programs in place to educate and inform the public about the need to protect our water resources. They also carefully monitor our island’s water supply and provide a comprehensive annual water quality report. For more information: 508.228.0022 or www.wannacomet.org.
FROZEN PIPES (BAD) Water is the enemy of your home. Please make sure that you have had your home properly winterized, including the outdoor shower and exterior faucets. We have had a very cold snap of weather recently, and it is sobering to see the damage that can occur from frozen pipes. If pipes freeze and your property is on Town water, the water company monitors usage and will typically alert your caretaker. Every homeowner should know where the main shutoff valve is located and how to turn it off in an emergency. Check to make sure that the main shutoff valve works. If it does not work, or if it is difficult to turn, please contact the Water Company and have it replaced. Frozen pipes are an entirely preventable event if the proper precautions are taken! Wannacomet Water Company: 508.228.0022 or online at water@nantucket-ma.gov.
Sales by Area 2019
Page 5
Nantucket: Lot Prices As of Q4 2019
Avg Lot ($OOO)
2500
Median Lot ($OOO) 2378
2000
1915 1769
1756
1483
1500
1453
1375 1258 1190 1100
1067 1000
1027
970
1000
920
845
800 750
700
700
975
965
970
787
519
1130
1095
688
730
811
668
660
475
500 320
0 2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
OFFICE NOTES Congratulations to agent Lisa Sherburne who recently trained for and completed the Run Disney Marathon in Orlando, Florida. It was super fun to be able to follow her progress on line. She ran the marathon in a great time of 4:24:18 and placed 11th out of 366 runners in her division. There were 14,106 people who finished the race. Good job Lisa! Welcome to Tanya Babaitsava, who recently joined us as an Office Assistant. We are excited to have her on board. Tanya may be familiar to many of you from her previous job as manager of Pete’s Soda Fountain on Main Street. Welcome Tanya!
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; Christine Whelden, ABR; Geri Walker, Tanya Babaitsava We believe in doing one thing and in doing it well! 82 Easton Street Nantucket MA 02554 508.228.7707 NantucketRealEstate.com
Volume XVI, Issue 1, Winter 2020