The market continues to be strong and steady. If you have a properly priced property in this climate, it should eventually sell. One main component that is fueling the market is the stock market. Buyers are pulling money out of the stock market, as it hovers at all time highs, and investing in Nantucket real estate. We just closed a deal where the buyer flat out said, if the Dow hadn’t risen 5,000 points over the last year, there would have been no way I could’ve pulled this deal off. Couple this wealth creation with historically low interest rates and I see a lot of runway…
Total volume YTD is well within striking distance of the $1,000,000,000 bench mark. Time will tell.
The market, in general, is well above the previous high and it doesn’t seem to be slowing. In the long run, Nantucket real estate values go the only way to the sky. However, if you are a more financially motivated than lifestyle Buyer and have the dough, there are some deals to be had, especially in the $5-10mm market. These are typically the listings where the Seller has either bought another property on Island (mostly an upgrade) and just doesn’t want to have two, big properties on Nantucket or they’ve had a fundamental change in their lives (moved to California, changed jobs, etc) and they can easily afford to take a hit; it won’t financially change their lifestyles. So, if you make them an offer within striking distance, they’ll probably bite. Feel free to contact your favorite ACK broker to hear ones we think are prime for the pickin’.
For the most part, the second decision you make when deciding to buy Nantucket real estate, which is the first decision, is where the scale sits between a lifestyle and financial decision. Hard to go wrong with either… If it weighs heavily on the financial side, where you are more objective about the buy, now is typically the ideal time to make a move. You might not get the property you want, but, again, it is more of a financial, objective decision. So, as long as the numbers add up, you’re in good shape. There are certain sellers that will negotiate heavily right now. They’re holding off on rentals for next season, i.e. cash flow, in case a buyer doesn’t want to inherit tenants, but they are not going to hold off for long; they want cash flow. Of course, if it is a financial decision, you want cash flow, also. But, right now holds potential of having your cake and eating it too. Might not be perfect, but everything’s a compromise and it could be pretty close.
New day, new goal; new goal, new day.
A client and I debated what the asking price of his property should be. Our numbers were close, but mine was slightly less and, what I believe to be, under a psychological barrier. He kept insisting on his number; I mean, truly, how could I be right, I’ve only been in the business for the last 15 years?! Finally I said, you built this to sell, right? Yes. You want to sell ASAP, right? Yes. Would you be more upset if you try to squeeze every last dollar out of it and it doesn’t sell or feel like you left a little dough on the table and it does sell? He went with my number. It’ll sell and despite what he might think, it’ll sell for market value. And, the ironic part, if we went with his number, it would’ve taken longer to sell and probably would’ve sold for less than we’ll get now because buyers often pass over overpriced listings.
Nantucket is amazing right now. If you have any opportunity, come.
We’re in the thick of returning security deposits from summer rentals. It’s fascinating to see the different approaches of homeowners returning security deposits. One would think it is very cut and dry – there are 10 hours of exit cleaning included, the cleaner invoiced me for 15 hours, therefore the tenant owes for 5 hours of cleaning – let’s say at $40/hr. – $200. But, it really is not that cut and dry. If the tenant paid $25k for the week, do you think she’ll be happy to get a $200 deduction from her security deposit. Some don’t care and think it is business as usual. Others, though, take strong offense to it. There are many factors that play into the homeowners decision – were they a needy tenant, are they going to be a repeat tenant, were they gracious, etc. In my opinion, one of the most important traits a homeowner should use is finesse.
Tom Brady, Roger Federer – that’s finesse. Aaron Rodgers is finessing – good on ya, mate!
September is an amazing month on Island. Weather is gorgeous, you can get into any restaurant, find a parking space, catch fish and waves, and the list goes on. Also, it is a great selling/buying month – sellers make sure the house is in tiptop showing condition and buyers are focused on buying rather than being on vacation. So, I’ve been showing a lot of real estate recently. One contrast between older (let’s say pre-2000) and newer houses that keeps being apparent is the older houses, for the most part, have shallower basements. For whatever reason, basements constructed pre-2000ish have 8′ or less walls and few, if any windows, and post-2000ish houses have at least 9′, and many times 10′, walls and many windows. I remember growing up on Island going into basements and you’d have to push the cobwebs out of the way, be careful about inhaling too much mold and on top of that, there was very little natural light – dungeon central. Now, the lower level (no longer called “basement”) is as nice as the rest of the house.
$629mm on the books and $208mm in the pipe.
Awesome whirlwind season. Nantucket really is special. Not many places can you find your own private beach in the middle of summer, watch the Beach Boys under the stars on the water, see and hear Ziggy Marley, Blues Traveler, Steel Pulse and The Revivalists, among others, in a 300 +/- venue, have five star meals after shopping at five star stores, catch fish, surf, bike the island from east to west, north to south on bike paths, run in the Race for Open Space thru the cranberry bogs, while all in good company of great people. The list goes on… So, it’s no wonder the market is strong – who wouldn’t want a piece of the Rock. Prices continue to rise. The average sale price thus far for 2017 is $2,021,481. At this time in 2016, it was $1,807,520; 2015, $1,769,298; 2014, $1,683,023. Total volume YTD is about 7% higher than 2014, our last billion dollar year. Econ. 101 – supply’s falling, demand is rising.
We’ve had some gorgeous beach days as of late, which actually quiets down the market. Although they do want to buy, buyers typically would rather go to the beach with their friends and family than concentrate on looking at property during their vacation. This is a main reason why fall is very busy. The buyers enjoy their vacations during the summer and focus on having fun. Then come bACK for a day or two during the fall to focus on buying a property. Also, listings typically show better in the fall because they are typically either vacant or have less people staying in them and they are easier to get into.
The market still feels strong, though. YTD, we are about 12% ahead of 2014, our last $1bn+ year.
Summer’s in full swing – the fish are biting, the bikes are cycling, the waves are peeling, the Grey Lady is green and colorful and the market continues to crank. The last $1,000,000,000+ year was 2014. At this point now compared to then, the total volume is up about $30,000,000, so I’m anticipating another $1,000,000,000+ year. I would think many buyers will take some money out of the equity markets as they are hovering at all time highs and buy a hard asset, like Nantucket real estate, that won’t cost much to carry and they’ll get to enjoy it. Time will tell…
On another note, showings are in full swing. Some listings have been on the market for multiple seasons, so a common question from a buyer is, “Why hasn’t this sold?”. There could be a million reasons – the property couldn’t be shown because of tenants, word on the street is the Seller is nearly impossible to work with, it was initially overpriced and is now stale and forgotten, but one reason that is commonly the case is there is nothing wrong with the property, Seller, etc., it’s just a good deal waiting to be had. For all the others, but the one who stepped up, it’s a classic case of could’ve, would’ve, should’ve.
Many of our buyer clients buy because finding the right rental house year after year is torture. Some tenants are fortunate to find the right house and be able to rent it year after year, hence why the top ones seem to always be booked; the repeat tenants won’t give them up. But, what happens if the owner decides to sell or use it themselves or the tenant’s dates change? All of sudden the tenant is back to square one, so they need to start the search all over. We, J Pepper Frazier Company, do a great job at pairing tenants with the right house, but some tenants just cannot handle the anxiety of not knowing the property, not knowing the linens, not knowing the kitchenware, etc., having to spend time and energy going through the choices, holding his/her breathe that the spouse will like it, so they eventually say, “I can’t do this anymore, we just need to buy something.” On the flip side, some homeowners cannot handle renting even though the house will sit vacant while there are tenants that want to rent it. Dealing with a broken fridge or a broken door knob or whatever from afar from the Faraway Isle is too much for some and they say, “We can’t do this again.” And then there is one less, great rental house. It’s like getting a loan from BoA.