Category Archives: Real Estate News

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Anything For Sale?

There are a few houses on ACK for sale, about 325 (including condos and excluding land) to be more specific. Is that a lot? Well, there are approximately 13,500 properties on Nantucket, so roughly 2.4% of houses on Nantucket are for sale. 2.4% does not sound like a lot, however, interestingly enough, 2.4% is above the national average. According to National Association of Realtors, there are approximately 1,978,000 houses (including condos) for sale and according to the US Census Bureau, there are approximately 132,312,404 housing units in the US. So, roughly 1.5% of houses in the US are for sale.

That’s interesting, but keep in mind most US houses are people’s primary houses and most Nantucket houses are people’s second+ houses. So, better comparisons would be the percentage of US second+ houses on the market compared to the percentage of Nantucket second+ house on the market and the same comparison for primary houses. If I were a betting man (haha), I would say Nantucket would have a lower percentage in both categories; once you have a piece of the Rock, you don’t want to let go…

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Got Wood?

The amount of building on Nantucket is incredible. It is not just in pockets around the island, it is everywhere and everything. Take the new developments. The naysayers said they would sit untouched with tumble weed blowing down the streets for years to come. Not so, Black Fish Lane has two new houses going up, Gingy Lane has three, Finback Lane has three, Nanahumacke has three, Old Westmoor Lane has one, Pilgrim Place has one, Hydrangea Lane has one, Cachalot Lane has one, Aurora Way has one and a developer is actually breaking ground on Ellen’s Way. That’s just the developments.

I spoke with the Building Inspector and he said he is busier than he has ever been. Busier than 2005/2006 – whoa! I was getting my BBQ gas tank filled (it is BBQ time on ACK) and the company manager said business has never been busier. They have already done 8 gas tank installs and have 8 more scheduled this month. I asked if that is a record and he almost keeled over – it is a record.

With lots of building comes demand for sub-contractors, which causes wages to rise. Not only are subs starting to pick and choose their jobs, but they are demanding higher prices. Remember my posting on March 14, 2012, “To Build or Not To Build”? Did I mention I am a fortune teller?

Words of advice, be nice to your caretaker…

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May I Install a Pool?

The Special Election today for Kerry’s Senate seat got me thinking about Nantucket’s government and politics. Nantucket has an elected Board of Selectmen which is responsible for the Town government’s goals and policies. The BOS call the Town Meeting into existence by issuing the Warrant which is the list of items, known as the Articles, to be voted on. Every registered voter of Nantucket may vote at Town Meeting (non-registered voters can attend Town Meeting, but they are quarantined to a small section of the auditorium – it’s actually quite amusing). The Open Town Meeting format is effective because people can voice their opinions and eloquent speakers can easily sway voters. People are passionate about Nantucket, so the Town Meeting can get heated over hotly contested articles, like the room tax and the Madaket turbine (both asinine ideas in my humble opinion).

However, when Nantucketers see something they universally do not like, they can stop it dead in its tracks through Town Meeting. When Ralph Lauren opened a store on Main Street, there was an Article drafted before their lights were on to ban chain stores on Nantucket. It received overwhelming support at Town Meeting and thus, passed. When increasing numbers of homeowners began to install pools on their properties in the Old Historic District, Nantucketers saw this as greatly detracting from the charm and peace of the Old Historic District and brought an Article to Town Meeting to ban pools in the Old Historic District, which passed with overwhelming support.

So, no, you may not install a pool!

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Top 5 Signs the Market is on the Up and Up

There are many signs of an improving market. Here are my Top 5 signs the market is improving counted down.

5) A fourth bank, Hingham Savings, just closed on 35 Main Street, a prime commercial location, for $3.6M and are probably going to spend another $1.5-2M outfitting the building. You need to do a lot of business to cover a $5M nut.

4) The rental market is strong. This shows consumer confidence is on the rise and Nantucket is becoming an ever more desirable destination.

3) A handful of smart spec. builders, i.e. the ones that did not go bust during the bust, are just finishing their projects in time for Summer ’13. That means, realistically they had to start the design phase of their projects sometime in ’11. The smart spec. builders typically are ahead of the curve.

2) The high-end, and the low-end, are doing well. The high-end buyers are often leaders of their industries that have a clear picture of what is going on in their industries, so if they are confident, there is a reason why. The low-end forms the base of the market and is often a local buyer. When local buyers step up, that means they are confident with their financial situation, which is anchored to the Nantucket economy. The middle market follows suit. Supply is down, demand is up. This is Econ. 101 and results in rising prices.

Drum roll please. The Number 1 sign that the market is on the up and up is:

Your plumber won’t call you back! That means there is so much work that he doesn’t care if he works for you or not.

Look forward to the start of the season, Daffodil Weekend!

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Fortune Teller

I may not be a fortune teller, but I know Nantucket real estate.

Sure enough my prediction that the four, elevated acres in Monomoy would have an accepted offer by this column rang true-only took four days. Apparently, there were actually multiple bids. That is a sign of a healthy market-put an appropriate ask on the property and there will be bids. So, where does the market stand today compared to the last few years.

Today, there are 338 available listings and 56 listings with accepted offers or under contract, which is 14.2% of all listings.

At this time in:

2012, there were 431 available listings and 50 listings with accepted offers or under contract, 10.4% of all listings.
2011, there were 455 available listings and 47 listings with accepted offers or under contract, 9.4% of all listings.
2010, there were 530 available listings and 32 listings with accepted offers or under contract, 5.7% of all listings.
2009, there were 535 available listings and 15 listings with accepted offers or under contract, 2.7% of all listings.

Notice a trend?

Out of curiosity, I looked at a post I wrote exactly one year ago. Here’s a link to it:

April 2012 Post

On second thought, maybe I am a fortune teller…

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What’s Going on Today

What do bidding wars in Naushop, resale of properties within 2 years for 15%+ more and building permit numbers being up year over year for the last three years tell you? Not sure, but tells me that this is a strong market and values are increasing. The Nantucket market has historically mimicked the stock market. With the Dow reaching all time highs, history tells us that demand for Nantucket property is on the rise. And the amazingly low interest rates are further juicing demand. Inventory is at its lowest level in the last 10 +/- years. So, couple increasing demand with falling supply and real values go up.

I spoke with one of Nantucket’s main appraisers recently and he said he is no longer checking “Stable Values” on his appraisals; he is checking “Increasing Values”. Properly priced listings in very desirable areas (all areas of Nantucket are desirable) are going to sell quickly in this market. For instance, four elevated acres that have potential to be sub-divided into four lots in Monomoy just came on the market for $3.25M. That’s a strong value. My prediction, the property has an accepted offer by my next column. Until then, let the show continue!

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Sense of Urgency-Couldn’t Be…

Yes, it could! We are actually seeing a sense of urgency from buyers and tenants now. We have not seen this since at least 2007. Makes sense, though. There is more demand vying for less supply.

Look at the sales market, there is dwindling inventory, currently 321 active listing (we haven’t seen inventory that low for the last 8+ years) and there are more buyers, a few of the bigger reasons being a) consumer confidence is up, b) the stock market is up, c) there is starting to be talk of rising interest rates creating pressure to lock in the low interest rates, and d) investors are viewing Nantucket as a better investment than much of what is available. The empirical evidence is there – we are seeing multiple bids on properties priced at market rates. There are a handful of high-end spec. houses being built right now; those sellers are going to be sitting pretty this summer.

As for the rental market, there is not necessarily less supply, but there is more demand because of reasons a) and b) above, and also the unfortunate, but true, “Hurricane Sandy Effect” – many vacation areas got wiped out by Sandy, but people still want to go on vacation, so “Honey, I’ve always wanted to go to Nantucket.” The “Hurricane Sandy Effect” will no doubt translate into a positive for the sales market, as well. It is quite possible that the rental market actually sells out for end of July, beginning of August time period. Should be a busy (and exciting) summer! Until then, we are enjoying the quiet of the Grey Lady:-)

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Number Games

In commercial real estate, it is all about the numbers. In residential real estate, it is not only about the numbers, but also about emotion and psychology. Focusing on the psychology aspect, why do properties get listed $1 below the next price level, i.e. $1,999,999 instead of $2,000,000? Because, there is a huge psychological difference between those numbers. To state the obvious, $2M is $2,000,000, $1,999,999 is not $2M. Besides that, physically they look far different-one has a “1” in front and the other has a “2” in front. So, we real estate brokers typically price properties just below the next price level. I’ve only had one Seller in my career resist pricing their property a dollar below the next level of millions; their property is still for sale…

To put it in perspective, what’s the gas price in your town? On Nantucket, the price is $4.99/gallon. Well, ever notice the third number behind the decimal point? I have and I’ve never seen it be a “3”! The price is actually $4.999/gallon-that’s $5/gallon, right? No, it’s $4.99/gallon;-)

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They’re Alive!!!

Winter has traditionally been a time when I organize my folders (electronic and physical) and get ready for a whirlwind four months from June through September. My buyer client folders typically go into “Active Client” and “Inactive Client” folders. I reluctantly move client folders into the “Inactive” category, but after 4+ attempts to get a dialogue going with him/her and no response, my Type A personality gets the best of me and the folder moves to “Inactive Clients” (considering the lack of response, calling the person a “Client” is a stretch:-) Then, the “Inactive” folders that have been there for several seasons get moved to the “Dead” folder, i.e. the shredder. Well, something interesting has been happening this year. As I’ve begun to move the “Inactive” folders to the shredder, I’ve noticed that I have actually created new “Active” folders for some of these clients. So, buyers that have been inactive for years are now becoming active again-whoa!

Another sign this market is on the mend.

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They’re Alive!!!

Winter has traditionally been a time when I organize my folders (electronic and physical) and get ready for a whirlwind four months from June through September. My buyer client folders typically go into “Active Client” and “Inactive Client” folders. I reluctantly move client folders into the “Inactive” category, but after 4+ attempts to get a dialogue going with him/her and no response, my Type A personality gets the best of me and the folder moves to “Inactive Clients” (considering the lack of response, calling the person a “Client” is a stretch:-) Then, the “Inactive” folders that have been there for several seasons get moved to the “Dead” folder, i.e. the shredder. Well, something interesting has been happening this year. As I’ve begun to move the “Inactive” folders to the shredder, I’ve noticed that I have actually created new “Active” folders for some of these clients. So, buyers that have been inactive for years are now becoming active again-whoa!

Another sign this market is on the mend.