Fall 2016 Atlantic East Nantucket Real Estate Newsletter

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A U T U M N Many people feel that the most special time of the year on Nantucket is the fall season. Most restaurants, shops and cultural venues are still open and navigating the island becomes easier. It now takes half the time to get around than it did just one month ago! The beach plums were abundant this fall, family scallop season starts this week, the fall festivals have begun and there is a crispness to the air. Sunsets continue to be spectacular (and earlier) and our thoughts are turning to the fast approaching winter months. There is a perception on Nantucket that prices drop on everything in the off-season, including real estate. Certainly there are opportunities for buyers at any time during the year, depending upon the particular circumstances of a seller. However, it is true that prices drop on travel and accommodations this time of the year and we encourage you to visit and see another very special side of Nantucket.

Billion Dollar Year: There have been a total of 380 sales as of the end of third quarter on Nantucket (an increase of 11% over last year) and the dollars represented by these sales is just over $700 million, an increase of 19% compared to the same time last year.

For perspective - the total number of sales in 2015 was 514 ($882+ million). It is now clear that 2016 will see over $1 billion in real estate sales on Nantucket. This last occurred in 2014.

Appreciation, Once Again: The average price of a property on Nantucket is $1,843,000, a 7% increase over 2015. The average price of a residential home on Nantucket is now $2,258,000; in 2015 it was $2,133,000 and, just five years ago, in 2011 it was $1,635,000. The median price of a home on Nantucket is now $1,475,000 compared to $1,195,000 in 2011. The average price of a vacant lot is $1,062,000 compared to $965,000 at the end of last year, an increase of 10%. The median price of vacant land is now $745,000 Sales over $1 million constitute 77% of the total market for this year to date.

And sales over $5 million make up 27% of the market.

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Great 3rd Quarter: There were 122 sales for over $272 million during the third quarter of 2016. Properties on Nantucket are selling, on average, for 90% of list price and 134% of the assessed value at the time of sale. The first quarter of the year saw just over $200 million in sales; the second quarter $226 million. It now takes a property on Nantucket, on average, 9 months to sell which has been fairly consistent through the past few years.

Many Choices for Buyers: On Nantucket there are currently 510 properties actively listed for sale (residential, vacant land and commercial) with a listed value of 1.8 billion dollars. This is a predictably balanced number of listings for this time of the year in the Nantucket real estate market.

Lots of Factors at Play: Physical, economic, governmental and social changes all affect the value of real estate. By the time you read this the presidential election will be over (let’s hope!). Because of the uncertainty surrounding the election, numerous buyers have said they are not making any real estate moves until it is over. Time will tell if this is just caution or fear based upon reality. Unemployment remains low at 5% nationally; it was as high as 9.8% during the recession. If the unemployment rate drops too low it may be unsustainable and the Federal Reserve may have to be more aggressive in raising interest rates than the measured pace it currently projects. The Fed’s latest economic forecast predicts baseline interest rates a little above 1% by the end of next year and just under 2% in 2018. The Gross Domestic Product (GDP) is used to measure economic output and is published quarterly. The growth rate in the GDP is closely evaluated by the Fed to determine whether the economy is growing too slowly or too rapidly. Recessions are often defined as two consecutive quarters of contraction in the GDP. The GDP is at $18,450 billion; one year ago it was $17,913 billion, indicating a small amount of growth in the economy during the past 12 months.

Nantucket: Total Annual Sales Dollars 3rd Q 2016

$1,200,000

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0 Total Sales Dollars

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

$452,913,000

$450,458,000

$613,765,000

$1,065,180,00

$1,186,885,00

$917,238,000

$852,045,000

$574,274,000

$434,592,000

$694,253,000

$531,597,000

$809,846,000

$748,866,000

$1,005,240,00

$882,666,000

$700,478,000

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$3,000,000

Nantucket Real Estate 2003 - 2016

$2,500,000

YTD as of 3rd Q 2016

$2,000,000

$1,500,000

$1,000,000

$500,000

$0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

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

$730,000

$668,000

$745,000

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

$1,130,000

$965,000

$1,062,000

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

$1,400,000

$1,525,000

$1,475,000

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

$2,124,000

$2,133,000

$2,258,000

Community Investment Tax Credits Housing Nantucket recently became eligible to participate in the Community Investment Tax Credit Program (CITC) offering individuals, corporations and non-profit institutions the opportunity to obtain a 50% state tax credit while investing in economic development where it is most needed. The benefits of participating in a CITC program are in addition to 501(c)3 charitable contribution deductions.

Housing Nantucket (HN) is a private non-profit dedicated to creating affordable housing solutions for Nantucket residents. HN uses CITC donations to implement it’s Community Investment Plan, which centers around creating and maintaining affordable rental housing for Nantucket’s workforce.

Cash donations over $1,000 to Housing Nantucket are eligible for CITC. In addition to the tax deduction for the contribution, donors with a Massachusetts state tax liability will receive a tax credit equal to one half of the donation amount. Any tax credit in excess of the donor’s tax liability is refunded by check from the state to the donor. Out of state residents receive their 50% tax credit as a refund from their respective states. The benefits are: considerable tax savings, donation dollars go further and are helping to address the critical affordable housing needs on Nantucket. Please speak with a tax professional to further understand your specific situation.

Here is an example: A taxpayer with $1,000 tax liability decides to donate $5,000 to Housing Nantucket through the CITC program (fully deductible).

The donor receives a $2500 CITC tax credit, $1000 of that credit is applied back to the taxpayer’s tax liability and the remaining credit ($2500) is refunded back to the taxpayer in the form of a check from the state.

For more information please contact Anne Kuszpa, Executive Director of Housing Nantucket at 774-333-3927 or visit them at http://housingnantucket.org/donate/ Page 3

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C O M M U N I T Y

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A G E N T S

Jane Miller currently serves as President of Nantucket Town Association, a part of the Nantucket Civic League. Among other things, the Nantucket Town Association features meetings with town officials and the Town Association membership about a variety of town-related issues. The association is also represented on an ad hoc traffic and parking steering committee with the Town's Transportation Planner.

Jane is also on the Board of Nantucket Lighthouse School, and was Board President for two years. She helped to get the Nantucket license plate project up and running, an effort that contributes to 17 island non-profits that benefit children. And, for the second year running, Jane is co-chair of the Yuletide Fair, a cherished local holiday tradition, sponsored by the school.

Jane cares about Nantucket remaining a vital year 'round community that embraces our growing population and honors our different perspectives while working together.

C O M I N G U P Annual Halloween Parade & Costume Pageant - October 31, 2016 Join the fun at the Annual Halloween Parade & Costume Pageant! Prize for Best Family Themed Costume at 4:30 PM on the Methodist Church steps. Parade begins at 5 PM with every child receiving a ribbon and goodie bag!

Freezin’ for a Reason - November 24, 2016 The Annual Cold Turkey Plunge, benefitting the Nantucket Atheneum, is celebrating its 15th year! Hundreds of brave swimmers (or dunkers) and spectators gather at Children’s Beach on Thanksgiving morning for the event. It is great fun and raises funds for our library, a wonderful cause. It is not too late to register as a turkey plunger! Some folks come up with elaborate outfits and the smart ones incorporate some version of a wet suit. For more information: https://www.firstgiving.com/nantucketatheneum/15th-annual-cold-turkeyplunge. Atlantic East is a proud sponsor of both of these fun community events.

IS YOUR BROKER REALLY WORKING FOR YOU? Atlantic East Nantucket Real Estate made a careful and well researched decision to practice Designated Agency some years ago. In simple terms this means that our agents will never represent a seller and a buyer at the same time. It is simply too difficult to meet the full set of responsibilities to both. Prior to July of 2005 the majority of real estate agents in Massachusetts represented the Seller and not the Buyer in real estate transactions. Research determined that many buyers were not aware that their agent was actually working for the seller and, as a result, new agency laws were adopted permitting real estate offices to offer both Seller and Buyer agency. A critical piece of the new law is that consumers must be informed about how agency works and then sign an Agency Disclosure Form, acknowledging that they understand who works for them and who does not. The law requires that the Agency Disclosure Form must be presented, reviewed, and signed at the first personal meeting to discuss a particular piece of property with a Buyer or Seller client. The change in the law has, from a practical standpoint, made it much easier to meet fiduciary responsibilities to a client, whether it be a Buyer or a Seller. The full fiduciary duties under single agency are: obedience to lawful instruction, loyalty, disclosure of material facts, confidentiality, accounting of funds and property and reasonable care and due diligence.

On Nantucket over 85% of all sales involve two offices: the listing office, representing the Seller, and the selling office, representing the Buyer. Agency is very clear in this scenario. However, it becomes more complicated if there is an in-house sale. If an office has the property listing and represents the Seller, they may elect to also represent the Buyer but ONLY WITH INFORMED WRITTEN CONSENT from both parties. This is called Disclosed Dual Agency and the agents in this case operate with a reduced level of fiduciary responsibility to each client. The agent may not advise either the Seller or the Buyer client.

An alternative to Disclosed Dual Agency is to practice Designated Agency under Dual Agency which is what we do here at Atlantic East Nantucket Real Estate. In Designated Agency, only one agent represents the Seller (the listing agent). An appointing agent (the principal broker) appoints another agent to represent the Buyer, each as Designated Agents. We feel that we can do a better job for our clients under Designated Agency as opposed to Dual Agency. There are fewer potential conflicts and we can better protect the interest of our clients.

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CRANBERRIES!!

The Nantucket cranberry bogs were hand built in 1865 by Cape Verdeans. They were privately owned, and in 1959, were the largest contiguous cranberry bog in the world. Currently the bogs are owned by the Nantucket Conservation Foundation and maintained by just a handful of people with additional help brought in during the October harvest. The growers are very proud to be part of the longest continuing agricultural business in New England. On Nantucket cranberries are heirlooms, not the genetically modified fruit that many of the large commercial growers produce. Historically, a large portion of the harvest is shipped off island for juice and cranberry sauce, but the organic berries are used locally by Cisco Brewers in their Cranberry Vodka and by Sweet Inspirations for their chocolate covered cranberries. Whatever form Nantucket cranberries take, you're sure to enjoy them!

Attention Rental Owners! nother summer has come and gone. While special events like the Nantucket Project (an annual think tank gathering of world leaders), and the popularity of the island as a wedding destination make fall a busy time, the pace is much slower than the hectic summer months. This is the time when we locals can take a breath and start to prepare for the next season. In real estate, that means updating our rental listings for the next year. This includes new contracts and miscellaneous forms but most importantly rates and availability so that we have accurate and timely information on your rental property. Having the most current info for each property allows us to quickly determine which rental is appropriate for which visitors. We look forward to getting this information back from each of you as soon as possible. In addition, this fall and probably well into next spring, we will be contacting many of you to arrange for new photos of your rental property. This is in anticipation of our new website, currently under construction. The updated, higher resolution pictures will help us achieve our goal of presenting your home in its best light and booking all those available weeks! As always let me know if I can be of any assistance with the rental of your home.

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Erikka Perkins, Rental Manager

Nantucket Real Estate: The Super High End There have been 22 sales of Nantucket properties for over $10,000,000 since the beginning of 2014. All but 2 were residential properties and there were no sales of vacant land over $10 million during this time period. The two commercial sales were 100 Pleasant Street (including five other commercial properties in the Mid-Island area), selling for $10,730,000 to Santander Bank in January of 2014 and the Harborview Cottages, located on the harbor in Town, selling for $15,500,000 in June of 2014.

Of the 20 residential properties, the majority were located directly on either the ocean or the harbor. Most were in new or updated condition and with the latest amenities: swimming pools, entertainment areas inside and out, all new systems and high end custom kitchens and baths. The hottest location for sales over $10 million is the Cliff area (9 sales), located just to the west of Town. The appeal is proximity to Town, north shore beaches and private clubs but with larger lots and more surrounding space than in Town.

The super high end on Nantucket has been somewhat slow this year with only 3 sales to date in 2016 over $10,000,000, of which two were brokered by Atlantic East. They are: 14 Gosnold Road, a newer home with water views and access located in the Cliff area ($10 million), 131 and 133 Main Street, a newly renovated farmhouse and cottage with pool and adjacent extra lot ($10,375,000) and 28 Easton Street in Brant Point, a harbor front property with a main house, cottage, studio and rare dock ($19 million). There is one pending sale over $10 million, located on Nantucket Sound in the Cliff area.

There are currently 26 properties listed over $10 million; 11 of which are waterfront. There have been many factors at play this year that impact this price sector, including the presidential election. Only time will tell how the very high end fares by the end of 2016.

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Nantucket: Total Annual Number of Sales 3rd Q 2016 900

800

700

600

500

400

300

200

100

0 Total Number of Sales

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

482

522

613

776

659

475

399

248

237

364

384

546

506

566

514

380

Items of Interest The Largest Land Owner on Nantucket Nantucket encompasses a total of 47.8 square miles, and we are proud to say that nearly 50% of the island is protected and preserved by the Nantucket Conservation Foundation, Nantucket Land Bank and other land trusts and restrictions. With over 9,000 acres, the Nantucket Conservation Foundation is the largest land owner on the island with about 30% of the protected open space. This equals approximately 10 times the land mass of Central Park.

Since it was founded in 1963 the NCF has acquired 214 properties. The foundation owns almost 16 of the total 60 miles of beach front on the island and offers over 100 miles of walking trails, all of which is open to the public.

Ho Ho Ho and Mistletoe!

The holiday season is magical on Nantucket and if you are lucky enough to be on island be sure to visit the Nantucket Historical Association’s Festival of Wreaths (November 23-27) and Festival of Trees (December 2-31). Another favorite local tradition is the Yuletide Fair, presented by the Nantucket Lighthouse School, held this year on December 10th from 10-2 at the Nantucket Yacht Club. The community comes up with their most creative works for these events and it is truly impressive.

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 4, Autumn 2016