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N A N T U C K E T
W I N T E R ! The island has been especially quiet to start the new year and it is a perfect time for reflecting on all that we are thankful for and for recharging before the next busy season. Many of us will do some traveling this winter, always a good opportunity for a different perspective. No matter how far we wander, coming home to Nantucket remains such a special part of living here, regardless of the time of year. The real estate market in 2016 continued to perform well with a total of 534 transactions for $972 million, compared to 514 ($882 million) in 2015. The sales break down like this: Homes (which includes affordable Covenant Homes, but not foreclosures) - 363, Land - 74, Condos - 49, Timeshares - 24, Commercial - 12, Foreclosures - 10, Garage - 1 and one Boat slip (Old North Wharf). The average selling price of a property on Nantucket is now $1,821,000, up from $1,717,000 in 2015, an increase of 5%. The average selling price of a house is $2,276,000 (+6%); the median selling price of a house is $1,515,000 (+8%). Vacant land is selling, on average, for $1,027,000 (+6%) and the median price is $800,000 (+16%). Properties are selling, on average, for 90% of list price and for 103% of the assessed value at the time of sale. For perspective, in 2010, properties were selling for 79% of list price and 95% of assessed value. The typical time on the market is running 9 months, slightly higher than it was in 2015. Prior to the most recent recession and at the previous height of the market (2005) it took an average of 7 months for a property to sell on Nantucket. During the recession time on the market was at an all-time high of 11 months. Properties in the highest demand are those that are either new, or renovated, and those that have a very high level of amenities and interior finish. Secondary dwellings and pools are a bonus. With the economic recovery many of the island’s best tradespeople are booked out well in advance, making a property in need of a renovation less attractive to potential buyers. As a result many buyers are willing to pay a premium for houses that are “done� and in pristine condition. Continued on Page 2....
M A R K E T
N E W S
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P . 1 )
We are often asked about the best time to list and sell. There is no one answer because there are a myriad of reasons that people decide to sell, often beyond their control. On Nantucket we have the added factor of seasonality with a relatively short summer season during which most potential buyers are on island. It is our experience that, if buyers are serious they will make the effort to come view properties no matter what the time of the year. If you are a seller, more important than the time of year to list, is that the property is priced correctly to the current market. Sometimes this can only be determined by actually listing the property and gauging the market response. 2016 Sales by Price Range The majority of sales on Nantucket in 2016 were between $1 million and $2 million (170), followed by those between $500,000 and $1 million (136). There were only 62 sales under $500,000, much of it Covenant Housing or vacant land. Between $2-$4 million there were 96 sales and between $4$6 million there were 31 sales. Lastly, there were 23 sales over $6 million. The highest price for a property on Nantucket in 2016 was $19 million for a waterfront property in Brant Point.
170
136
96
62
31 23
Price Range (000's)
Under $500,000
$500,000 $1,000,000
$1,000,000 $2,000,000
$2,000,000 $4,000,000
$4,000,000 to $6,000,000
$6,000,000 and up
There was a slight slowing of real estate sales on Nantucket during the 4th quarter of 2016, attributable perhaps to the national political situation and uncertainty about the future. Because Nantucket is primarily a discretionary (second home) market, it does not always follow national trends. Some analysts fear that the U.S. economy is overheating with the rapid and large gains in the financial markets during the fourth quarter of 2016. But, historically, the real estate market on Nantucket has followed the stock market indices and, if past trends hold true, we are in for a very active market ahead. Only time will tell.
Nantucket: Total # Properties Sold As of 12.31.16 600
500
400
300
200
100
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Total Homes Sold
239
302
361
468
398
284
341
211
205
309
297
375
357
423
394
445
Total Lots Sold
138
125
148
176
117
59
46
26
30
43
39
78
94
86
98
74
Total Commercial Sold
14
11
16
41
22
9
12
11
2
12
11
21
18
19
22
12
Page 2
SALES BY AREA 2016
Madaket: No Sewer At This Time Although the article to bring municipal sewer to Madaket passed resoundingly at the Fall Special Town Meeting, it failed to garner a majority of votes for funding at the ballot box in early November. Voters turned down (779 against-427 in favor) $84 million for the Madaket sewer project which would have helped protect the harbor and scallop fisheries from further degradation of water quality. Perhaps people on island have enough with large capital expenditures: the police station, now the fire station, probably a new Our Island Home and the sewer infrastructure for the Shimmo and inner harbor area. What does this mean for Madaket? We spoke with the Nantucket Health Department, who are proponents of bringing Town sewer to Madaket as quickly as possible. If an owner has a septic system in Madaket that has failed the Title V inspection they are now required to fix the system which could mean an upgrade or an entirely new system depending upon the type of failure (hydraulic and technical). Other factors determining what is required would be lot size, depth of the ground water, septic capacity (number of bedrooms)and access to Town water. In some cases owners will be required to install an I/A (Innovative/Alternative) system which is engineered to minimize impact on the groundwater and harbor and is very costly. There may be low interest funding available from the Town to help property owners with septic system repairs or replacement. The Town was able to borrow money from the state Deperatment of Environmental Protection at zero percent interest (Phase I) and low (Phase II is 2%) interest rates. The loans to property owners can be for up to 20 years. For additional information please contact the Nantucket Health Department at 508.228.7200 x7322.
Page 3
CLOSING COSTS FOR BUYERS Considering purchasing a property on Nantucket? Make sure to plan ahead and budget for these common costs associated with purchasing a property on island. 1. Home Inspection: The typical cost is about $650 per dwelling and we never recommend skipping it. 2. Earnest Money or Initial Binder: This is the deposit required when making an offer on a property. Here on the island this amount is typically $5,000 to $10,000 (sometimes less if agreeable to the seller). 3. Down payment: This is usually 10% of the purchase price and includes the earnest money deposit. Typically a total of 10% of the purchase price is due at the time that the Purchase and Sale agreement is signed. 4. Closing costs: these costs can vary greatly and add up quickly. Typical closing costs include: attorney's fees, appraisal, title insurance, property insurance, survey, bank fees, recording fees, pro-rated utilities and property taxes. These costs alone can be near or over $10,000. The biggest closing cost for buyers is the Land Bank Fee which is 2% of the purchase price. There are exemptions for first time buyers and others. 5. Do not forget your moving expenses! Some other costs to consider are homeowner association or condo fees and septic maintenance plan fees.
W H A T
D O E S
I T
M E A N ?
CMAs, BPOS and Appraisals? These are three different methods used to value real estate. The Comparative Market Analysis (CMA) is the method used by most real estate agents to help determine the value of a particular property. It is an excellent guide for the agent and owner to define value and develop a strategy on listing price. Current competing listings and comparable sold listings as well as market conditions are evaluated to formulate a proper market price. CMAs can also be used for short sales, foreclosure/REO sales, negotiations and mediations depending upon state law. A Broker Price Opinion (BPO) is also prepared by a real estate agent and is the opinion/estimate of the potential future selling price of a property. Depending upon state law, these may be used for short sales, foreclosure/REO sales, negotiations and dispute mediations as well. Appraisals are prepared by a licensed appraiser and are an opinion of the property's value at a particular moment in time. Appraisals are required for most federally regulated transactions, loans and many estate or divorce situations where it is necessary to establish value.
Nantucket: Building Permits Single Family Residences, YTD 250
235 211
212
200 174 164 156
152
150
150
140
141
2014
2015
127 108 100
64 52
54
57
2010
2011
2012
43
50
0 2000
2001
2002
2003
2004
2005
2006
2007
2008
Page 4
2009
2013
2016
GIVING Atlantic East has long had a commitment to giving back to our community each year. Our program, modeled after one initiated by H. Flint Ranney of Denby Real Estate, earmarks a percentage of each sale, which is then matched by the company, for donation to various non-profit organizations. This year we supported 15, mostly local, non-profit organizations. Our agents are involved in our community in many other ways and our lives are enriched by being able to give back with our time, creativity and energy. The office recently participated in: sorting gifts for the Inky Santa Toy program, helping out at the Seconds Shop (benefitting Fairwinds, formerly Nantucket Behavior Health), driving for Meals on Wheels and chairing the Festival of Wreaths (for the Nantucket Historical Association) and the Nantucket Lighthouse School’s Yuletide Fair. There are lots of things that one can do to help that have an impact on our small island!
Vacation Rentals The holidays are behind us and the Steamship Authority has opened up reservations for the 2017 season. That means if you haven't already it is time to start planning your summer vacation. It has become commonplace for visitors to book next year's vacation as soon as they've left the island, and each year our early bookings increase and availability decreases the closer we get to warm weather. To combat this trend, in 2016, our Atlantic East agents concentrated on bringing in lots of new inventory across all segments of the rental market. As a result we still have homes with great availability - even several homes with the coveted first two weeks in August open. Please visit our website at www.NantucketRealEstate.com or contact your favorite Atlantic East agent today to find the perfect fit for your Nantucket stay.
Erikka Perkins, Rental Manager
Covenant Program Opens Doors on Both Sides of the Market Nantucket's high home prices and tight inventories have us all pondering how to maximize value. What if there was a way to sell off an unused portion of a lot? What if a cottage could be subdivided from the main house? The Covenant Program provides solutions for both buyers and sellers. In the past 14 years, 71 Covenant homes have been created. In today's robust market, savvy island property owners use the Covenant Program in creative ways, all while generating homeownership opportunities for local people. Retirees, no longer interested in maintaining rental cottages, create covenant homes with separate driveway access on their property. Owners of large lots divest in the unused portions. Off-island owners retain the main house as a summer rental, but carve off the secondary cottage as a covenant home. Owners who have trouble selling a property as a whole have better luck selling two parcels, one as a covenant. Employers create covenant homes for their employees. Parents parcel off covenant lots for grown children. Divorcing couples utilize covenant capabilities within their settlements. The Covenant Program's functionality has expanded over the years. Covenant sellers can now create fee-simple lots, when initially only condominium covenants were available. Vacant lots may be carved out of an otherwise un-subdividable lot. Covenant homes may be created for family members (including oneself) regardless of purchaser income, as long as the covenant homeowner resides in the home year-round and follows all other program rules. A local zoning bylaw enacted in 2003, the Covenant Program allows two dwellings on one lot to have separate owners, when otherwise they would need to be sold together. A permanent affordability covenant is recorded on the lot, and the income-qualified covenant homeowner (earning up to 150% of the median household income for Nantucket - the cap is currently at $142,350) needs to abide by residency and resale restrictions. The 2017 Maximum Sales Price is $669,826, up from $663,473 last year. The maximum sales price is tied to interest rates and median income. It has ranged from $404,000 in 2003 when interest rates were high and median income was low, to $707,000 in 2012 when interest rates were low and median income was high. Last year, ten covenant properties transacted ranging from $280,000 for vacant land to $663,473 for a four bedroom home in a sought after neighborhood. Currently, there are many more qualified buyers than covenant homes for sale. But as in every market, covenant homes need to be priced appropriately in order to transact. Covenant purchasers obtain independent financing, so the purchase price of a covenant home needs to be affordable for the individual buyers. Most qualified covenant purchasers cannot afford the maximum sales price, and sellers will benefit from realistic pricing based on comparable sales. Covenant homes preserve and protect workforce housing for present and future generations. To learn more about how you can use the covenant program to do good for the community while doing well for yourself, visit http://housingnantucket.org or call (508)228-4422 today. Anne Kuszpa, Executive Director, Housing Nantucket Page 5
$3,000,000
Nantucket Real Estate 2003 - 2016
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
2003
2004
2005
2006
2007
2008
2009
2014
2015
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
$800,000
Average Lot
$519,000
$787,000
$1,190,000
$2,311,000
$2,378,000
$1,915,000
$970,000
$1,095,000
2010
$1,769,000
2011
$1,483,000
2012
$1,258,000
2013
$1,130,000
$965,000
$1,027,000
2016
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
$1,525,000
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
$2,276,000
This and That Wonderful Old Timey Stuff: Someone started a Facebook page called “Nantucket Days of Yore” and it is loaded with photos and memories from days past. It has nearly 2000 members who follow it and it is fun to take a peek, especially at the photos which memorialize so many places that are no longer here. Put It On Your Car: Special Nantucket license plates are still available and by signing up for one you support more than a dozen local non-profit organizations that benefit children. The program was started by the Nantucket Lighthouse School which, with the help of partner organizations, brought in over 1500 commitments to get the plates into production. The goal is to reach 3000 by this fall and they are currently at around 2100. Please spread the word! www.NantucketLicensePlate.org Congratulations to Christine Whelden! Who recently passed the real estate broker’s exam in the state of Florida, which is not an easy thing to do. Christine is working with Keller Williams in Naples, Florida if you know anyone looking for expert real estate help down south. Only 3 months until Daffodil Festival! Mark your calendar for the weekend of April 28th-30th, 2017!
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, Principal Brokers 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
NantucketRealEstate.com Volume XIII, Issue 1, Winter 2017