I’ve had many people ask me how the lowered real estate tax deduction would affect the market on Nantucket. Most people had the assumption that it would have a negative impact on the market. However, I think the opposite – it will have a positive impact. Although Nantucket is part of the Commonwealth of Taxachussets, the Nantucket real estate tax rate is $3.53/$1,000 or, no calculators, .353%, of assessed value for FY18 – one of the lowest mill rates in the country (another reason to own a piece of the Rock)! So, your property would have to be assessed over $2,832,861 to go over the allowed deduction. Whereas in Suffolk County, NY (Hamptons), the rate is approx. $22/$1,000. So, your property would hit the limit at approx. $454,000 of assessed value. People don’t like taxes, but like vacation homes. Hmmm…
Keep on whispering in my ear, tell me all the things I wanna hear, cause it’s true, they really wanna buy. If a buyer is willing to come on Island in arctic conditions in middle of winter, they’re probably serious. January is a great time for buyers to see properties because for the most part, they are vacant. Also, if a buyer likes a property when the flora is dormant, the sky’s typically gray and the house is shutdown for the season, then they probably are going to really like it in the summer. Believe it or not, many actually do make the mission to get a deal done making January a productive sales month. YTD, over $30mm has closed and there is at least another $150mm in the pipeline.
It’s been an eventful couple weeks on Island between the negative degree temps., the harbor freezing for about a week cancelling all boats (Stop and Shop had to move food from the downtown store to the mid-Island store to keep the natives at bay as rations dwindled) and the main sewer line busting. The sewer has since been fixed and the Strip area has been scrubbed and bleached; I actually had a client who recently commented how nice the Strip smelt:-) The harbor and beaches are in good shape; the system got flushed quickly.
Dow 26,000 – wow. Should be a strong season…
But the market is so delightful… This really is a win-win market. Sellers can get strong numbers and Buyers have extra purchasing power from the 25% stock market run and the ultra low interest rates.
If the $37.5mm sale of 6 Sun Island Road (Nantucket Storage Center) is included (and affordable housing excluded), 2017 sales were just over $1.03bn. I think the Sun Island sale should be partially included because the deal included the real estate, 1.7 acres in 5,000 sf zoning, and it was a market trade. If you back out the value of the business (I’m not privy to details of the deal, so don’t know exactly), then ’17 sales would be $1bn MOL.
Wishing everyone a healthy, happy, peaceful and prosperous New Year (and that you’re a Boston sports’ fan).
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.