Nantucket is an extraordinary place for many reasons, but especially because of the forward thinking of the people. To name a few examples, among many, think about these – the Nantucket Conservation Foundation started in 1963 and the first piece of land it acquired was an 0.9 acre parcel in Brant Point – “Bird Sanctuary” – tap root started. Now, NCF owns and manages over 9,000 acres. The Nantucket Land Bank is the first of its kind and is now used as a model across the country. The “Acceptance of Nantucket Islands Land Bank Legislation” was adopted at Special Town Meeting, January 17, 1984 by a show of hands – Yes, 293, No, 12. Wow… The Land Bank has since acquired over 2,200 acres for the use and enjoyment for the general public. In 1975, all of Nantucket, Tuckernuck and Muskeget became part of the Nantucket Historic District. This “District” is governed by the Historic District Commission to maintain architectural integrity on Nantucket Islands. Feels good to know you’re not going to have a suplex developed next to you. What’s a suplex, anyways? Sounds suspect.
To think we can ride a bike 10 minutes from a world class downtown – restaurants, shopping, social, etc. – and all of a sudden be in a swath of conservation land where you don’t see another human soul is jaw-dropping.
Market’s still firing. $491mm closed YTD compared to $433mm at this time last year, which was a $1bn year.
Yes, it is on Nantucket and it is priceless. Wild the value differential just because different addresses – arbitrage anyone? For instance, do you know where Gingy Lane is? Maybe so, maybe not – most don’t. It’s an amazing location between Cliff and Town on a cul-de-sac, that always has that salty, soothing Nantucket breeze flowing down the Belgian block lane. You can walk to Town, gorgeous beaches, bike paths, The Westmoor Club, Coffin Park, Something Natural, and the list goes on and it’s a dead end street. But, the houses there trade for far less than if they had a more well known address – “Cliff Road”-type addresses. Cliff Road has cache. Cache is intangible. Case in point, back when my dad was running Nantucket real estate, the owner of a property on the corner of Madaket Road and Cliff Road couldn’t sell his property. After many false starts and sleepless nights, he finally made the logical move and asked my dad to sell it for him. What’d my dad do? Changed the address to Cliff Road, raised the price 23% and sold it immediately for over ask. Same property, different address, different perspective, different market value. I mean, look at 74 Madaket Road – talk about value…
Quick stat. update, rounding to the nearest $5mm, first half closed volume:
’14 – $380mm
’15 – $310mm
’16 – $420mm
’17 – $390mm
’18 – $450mm
Happy Independence Day!
Recently, NAREB (Nantucket Association of Real Estate Brokers) lightened the rules to become a member of our organization per the DA’s instruction. Reason being that the more choices the consumer has, the better for the consumer. I’m wondering if those were sound instructions, though. There are a lot of nuances with Nantucket real estate and if the broker doesn’t know them, the consumer could get hurt. For instance, you own a lot in LUG-1, 40k sf, zoning, but your lot is actually 80k sf and shaped like the coast of ACK, do you have one, two or more lots? How do you calculate the R-Factor? Wait, what is the R-Factor?
For the most part, I am a firm believer in if you want to sell your property, put it on the open market. That way it will be exposed to the most amount of buyers, therefore creating the most demand. For instance, 5 Hulbert Ave., the Heinz/Kerry property, was quietly marketed for sale for $25mm without being put on the Multiple Listing Service or advertised anywhere. Then, a couple years later, they decided to put it on the open market and advertise it for $22.9mm. By that time, word had gotten out that they had moved to the Vineyard and the house was empty. It’s an amazing property, so what could have been a climatic entrance into the market turned very anti-climatic and stale. It sold for $17.5mm. Their neighbor at 3 Hulbert Ave., which is about as identical to 5 as you’ll get on Hulbert Ave., as close to a perfect comp., put their property on with a big splash and told the world, our property is for sale, bring it on. Sold for $26.5mm in 48 days.
However, there are one-off instances where not putting the property on the market, the Seller can get a higher price than putting it on the market. Case in point, 8 Stone Post Way just sold for $5mm, which most would agree is a shocking amount. If it was put on the open market, the consensus of market value would be in the $3mm’s, and probably low $3mm’s. But, the abutter wanted it and probably told the Seller to name their price – $5mm and it is yours. I’ll take it.
So come on and let me know…
And, all of a sudden, the season is upon us. Despite difficult travel conditions up until recently, the real estate market posted strong numbers. YTD dollar volume is at approx. $325mm. Compare this to the billion dollar plus years of:
2017 – $238mm
2014 – $225mm
2005 – $295mm
2004 – $335mm
With a start like this, high equity markets and low interest rates, seems this market’s volume is going to end up with three commas.
Let the season begin!
Doesn’t necessarily matter what it is, but if presented properly it’ll overcome.
The market’s strong; get your Nehru jacket while available
10 years ago, I leased a Monomoy waterfront property for $40k for a week. 6 bedrooms, 8 baths, pool, gorgeous. Highest $/night for a residential rental. People swooned and swanned – I can’t believe they’re getting that $… Naturally, I analyzed the numbers. For a comparable suite at one of the high-end hotels, $2k/night was the starting point. 6 bedrooms x 7 nights x $2k/night = $84k. So, $40k was a value. One may not fill every bedroom, though. But, they get a kitchen, living and dining rooms, yard, privacy, etc. And, for an extra $200/night, they can get turndown maid service. Then, someone built a dialed-in 8 bedroom, 10 bath amazing property in an unstoppable location and leased it for $45k/wk. – some more swooning and swanning. The math: 8 bedrooms X 7 nights x $2k/night = $112k/week. Now, investors have recognized this delta and there has been a proliferation of $45k/wk rentals. End of the day, those rentals are strong values (and don’t mess with the swans in Hummock Pond).
Pep and I just got bACK from seeing our buddy in Crested Butte, CO – very cool town. Naturally, I asked how the real estate market was and, as expected, was told it was strong. It has many similarities to Nantucket – charming historic district, tight zoning, stunning outdoors, friendly people, healthy lifestyle, solid restaurants, and a finite supply. Like Nantucket, it’s a market that won’t go down over the long run.
As I walk around the Beaches resort in Turks and Caicos, it reminds me how important presentation is, which in turn reminds me how important landscaping is to a property. Beaches owns an amazing piece of property here and the landscaping is stunning. We went to the sushi place last night and ordered edamame. Edamame typically don’t last, but they brought them out of their shells. Much of the pleasure of eating edamame comes from eating them out of their shells. The presentation was off and there sat the edamame. Landscaping is the last line item on the budget, but it is arguably the most important.
Hard to believe winter is half way over and Daffy is two months away. The rental market is in full swing and soon the season will be here in no time. For homeowners, now is the time to start thinking about any upgrades/maintenance that should be done for the upcoming season to your living house, especially if you rent it. A key one in particular is to make sure the smoke and CO detectors have good batteries, are functioning properly and their surrounds are clean. It can be exhilarating to some, like me, to be in a deep sleep and then all of a sudden get snapped out of it by the smoke/CO detectors going off – WHHOONNTTT, WHHOONNTTT – but not to most. Most initially get worried there is a fire and/or carbon monoxide situation in the house, but often it’s just a false alarm because of dead batteries, poor maintenance and/or an arthropod nearby, which turns the worry into anger very quickly. These false alarms tend to happen in the middle of the night, too, which gets people even more fired up. The false alarms are preventable. BTW, did I hear Daddy long-legs are nocturnal?