As we all know, interest rates are at historic lows and will inevitably go up some day-maybe not in the next few months, but probably within the next 12 months. So, if you buy a $1MM property now, put 20% down and lock-in a 4.5% 30-year fixed interest rate, your payments will be $4,053.48/mnth. If interest rates climb to 5.5% and you want to keep your monthly payment around $4,000, then you will only be able to buy a $900K property ($4,088.08/mnth.). Also, inevitably, because of simple supply and demand economics of Nantucket real estate, prices are going to go up at some point. So, if prices and interest rates go up in tandem, your purchasing power gets a double hit; you get less leverage with the interest rate and you get less property for your money. Sure your down payment will be more for a $1MM property than an $900K property, but it’s not like the extra $20K you put down disappears-it becomes equity in the property that hopefully appreciates (more than likely it will and at a faster rate than if the money was in a bank account). I’m no rocket scientist, but seems to me that if you have any extra money lying around and you can qualify for a mortgage, right now is an amazing time to buy real estate, especially if it is on Nantucket.
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30 Washing Pond Road closed today for $20MM. The asking price was $23.95MM and the property was on the market for 45 days before getting an accepted offer. The “smart” money is buying Nantucket real estate, which is a great sign that Nantucket real estate is currently being viewed as a strong value/investment by very sophisticated buyers/investors.
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It was a monster week for Nantucket real estate sales. The week ending Thursday, September 23 had a little over $65MM in total real estate volume. What is very encouraging is that there were deals across all price ranges including a huge one for $22MM that sold with an abutting parcel for $5.5MM, to a not so huge trade for a free-standing condo. for $587,350. There are quite a few deals in the pipeline and total dollar volume for the island is likely to be around $800MM. Sellers have adjusted their expectations and Buyers are sensing that now is their chance to get into the Nantucket market.
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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
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13 Squam Road closed yesterday for $12.75MM. The property has been on the market for over three years, originally starting at $19.95MM. Although the Buyer received a significant discount off the original asking price, it goes to show market stabilization, the bottom is forming and properties once again have a liquid value. Encouraging news for the Nantucket real estate market. Stay tuned Nantucket real estate enthusiasts! Dalton
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Never in Nantucket’s real estate history have there been as many properties listed over $20MM on the market. There are currently 7 ranging from $20.95MM to $38.5MM. 6 are single family homes with outbuildings, including cottages, and 1 is 66 acres of raw land. Nantucket has never had a residential sale in the $30MMs, but I am sure that and an asking price in the $40MMs is coming soon-it’s happened in Aspen, Palm Beach and the Hamptons, so why not here…
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