There’s a catch to the special, the lots are in Newark and you have to live there for at least five years. There are only 100 available – wonder if they’ll sell out… That would be a very sweet deal if the letters after “N” were “antucket”, not “ewark”. The land market on Nantucket remains hot. Consider this, according to Nantucket’s multiple listing service, LINK, there are 51 land listings available and 43 land listings under agreement; there are 191 single-family listings available and 24 under agreement. So, 48% of the land listings are under agreement compared to 11% of the single family listings – whoa! The demand for land is inevitably pushing values up. Last year, the average land sale was approximately $1.3mm and the median was approximately $760K; the average price of land sales currently under agreement is approximately $2mm and the median is approximately $1.1mm – whoa, again! What typically happens is land values will get pushed up to an inflection point where consumers are financially better off buying a house than a piece of land, the demand for land dries up, values drop and the cycle starts again. However, with a limited supply of land on Nantucket, that may not happen. Values for land and houses on Nantucket will continue to rise. $1,000 lots are tempting, but as my friend said, “Would your wife rather a $1,000 necklace or a $1,000 lot in Newark?” It was a rhetorical question, I think…
I love the saying first offer is usually your best offer because it is amazing how often it rings true. It is equally amazing how often sellers don’t listen to that saying and end up not making a deal with the first offer and end up settling in the future for a worse offer. Sellers will make this mistake because they put their property on the market, immediately get an offer and think that since they got an offer so quickly, their property is probably under-priced and there will be many more offers to come, so they will hold out for a better offer. In most cases, this is flawed thinking because what is actually happening is a buyer has been sitting on the sidelines waiting for just the right property and right when the property comes on the market, this individual buyer steps up and makes an offer. So, the point is, if you get an offer right away, don’t think it is because your property is under-priced, think that it is properly priced and a specific buyer has been waiting for just your property; first offer is usually your best offer…
Beyond hard statistics like time on the market, inventory levels, and properties under agreement, which are all improving, there is another, subtle sign that the market is improving-the high-end is heating up. In the last two weeks, there have been two high-end sales, 18 Rabbit Run Road for $7,000,000 and 59 Shawkemo Road for $7,747,500, and two high-end properties went under contract, 4 Salt Marsh Road, listed at $6,500,000, and 183 Polpis Road, listed at $9,850,000. This may not seem like much of a sign, but the high-end has led the market out of the bust cycle many times before. Think of successful fund managers; other managers mimic the successful managers’ moves because the successful managers are successful for a reason-they make smart investments. Buyers who can afford high-end properties typically can afford them for a reason-they make smart investments. Does anyone remember what happened when Lou Gerstner bought 10 and 17 Berkeley Avenue in 2003?!
I grew up in a real estate family. I have been hearing real estate deals being negotiated since I was 3 months young. Sometimes I would hear my mom say, “How’d the third showing with so and so go?” My dad would say, “Libby, it’s never a good sign if they want to see the property for a third time. They are only talking themselves out of doing the deal; they are looking for excuses not to buy it.” Very ironic, too, because you tell your clients you have a third showing and they get excited that the buyers are going to make an offer, but, in reality, the opposite is happening-the buyers are talking their way out of the deal. Now that I am active in the real estate brokerage business, I see this phenomenon first hand; third + showings are the kiss of death. Most buyers that pull the trigger know it when they see it.
Last two properties my wife and I have bought, I made the offers before she had been to the properties. Naturally, she asked, “How’s the interior?” I replied, “Not sure, I haven’t been inside…”
Properties on the open market, 4/28/09, 602.
Properties on the open market, 4/18/10, 560.
Properties on the open market, 4/20/11, 482.
Properties under agreement, 4/28/09, 18.
Properties under agreement, 4/18/10, 32.
Properties under agreement, 4/20/11, 50.
I think I see a trend… Get in while the interest rates are still low!
As of March 6, 2011, there are:
435 active listings available
43 active listings that are under agreement
Out of the total (available and under agreement) active listings, 8.996% are under agreement. Only in September of 2010 has that percentage been higher, and only by a small fraction, in at least the last three years. That seems to be another clear indicator that the market has bottomed…
J Pepper Frazier Company just successfully brokered and closed another short sale on Nantucket-70 Pochick Avenue. Although I was working on the deal for 6 months, once Chase assigned the case a negotiator, in the sixth month, I was actually able to communicate with someone and move the deal along smoothly, basically as a conventional deal. The lenders are finally putting set systems in place to process these short sales; Chase has a whole team of negotiators that will actually call you, Bank of America uses a system called Equator where one can actually see updates and get instructions for the next step, other lenders have their own processes. None of these systems are perfect, but they are a far cry from how the short sales used to be handled. When the short sales first started appearing on Nantucket, about two years ago, closing the deal was very hard because the lenders had no system in place to handle the deals and many times the property would end up going to foreclosure and be bought at auction for a lesser price than what was offered with the short sale-definitely not in the shareholders’ best interest… The last month of the 70 Pochick Ave. deal was refreshing to see that the lenders are finally stepping to the plate to get the short sales processed. We need the shorts sales and foreclosures out of the marketplace to get back to a healthy market-seems like we are getting closer…
In December 2008, there were 628 total properties listed and out of those, 17 had accepted offers or were under agreement, 2.7%. In December 2009, there were 630 total properties listed and out of those, 33 had accepted offers or were under agreement, 5.2%. In December 2010, there are 593 total properties listed and out of those, 25 have accepted offers and 29 are under agreement, 9.1%. So, the numbers, falling inventory and rising amount of deals, are clearly showing that the Nantucket real estate market is strengthening. Now could be the golden opportunity for buyers while the interest rates are still low and the market is at the bottom…
A magnificent 9.2 acre water front piece of vacant land in one of Nantucket’s most sought after locations, 0 Chase Links, just received an accepted offer. We won’t know at what price a deal is being made until the deal closes, but I bet it is within 15% of the asking price considering the property has only been on the market for 116 days. The Nantucket high-end real estate market remains strong…
11 and 16 Cathcart Road located on Nantucket’s prestigious harborfront location just had a price reduction from $38.5MM to $29MM. The properties were originally priced at $55MM, which everyone knew was an astronomical asking price. Now, the Seller is getting into the realm of market value. Will update with any developments. Until next time Nantucket Real Estate enthusiasts… Dalton