Whilst ordering Eggs Benedict, my dad asked the waiter, “Do you cut the English Muffin or hand pull it apart?”. Details differentiate – I tend to think Nantucketers – seasonal and year-round – hand pull apart their English Muffins . Nantucket is extraordinary in so many ways, including implementing win-win solutions to questions/situations that arise. Rarely anything happens on the Rock without a strong, healthy debate and thorough questioning. For example, the Town plans to grade the cobblestones and sidewalks on Main Street, so folks want to know how the Town is going to do it – what the process will be, what the sub-surface will be, what tools will be used, etc. Should they be set in sand or asphalt? As one put it in so many words, the cobblestones have been around a lot longer than we and have maintained better than all other surfaces, so let’s do it properly. It’s awesome that debate and questioning is happening. The result of these debates and questions is, Nantucket is consistently ahead of the curve. For instance, we have a new hospital, school, police, fire, water, sewer all while maintaining one of the lowest property tax rates on the most valuable property in the world.
YTD volume: $610m. Strong.
The market continues to show undoubtable strength. Makes sense – equity markets are at all time highs, interest rates are still low, rental market is strong, sun is shining, fishing is on fire and the island is as amazing as ever. Seems like it is going to blow through the $1b benchmark, especially because there is still great inventory. YTD closed volume is $580m, there’s at least $300m in pending deals and we are just entering what are traditionally our two biggest months – September and October.
To potentially add to demand, I heard a rumor there might be a direct flight to the Rock from Chicago next year…
Real estate brokerage has beautiful jargon with well-known phrases. Maybe some of these phrases stick with us because they involve such a big asset with a lot on the line – “Buyer’s Remorse”, “Cold Feet” – but, regardless, they do.
A lesser known phrase is “Seller’s Remorse”. Except, on Nantucket. We constantly deal with “Seller’s Remorse”, which you can’t say about many places. People simply don’t want to get boxed out of the market and/or give up such a high performing asset. I think, if Seller’s Remorse > Buyer’s Remorse, then Strong Market and there’s far more Seller’s Remorse going on in this market.
The building boom continues on Island, which has its pluses and minuses. The main plus is it fuels the local economy (and I get to see the cutting edge house/landscape designs, materials, craftmanship, etc. :-). The main minus is the disturbance it causes the surrounding area.
There used to be an unwritten rule to pare back exterior construction in the denser districts of Nantucket, like the Residential Old Historic (ROH) district, June 15 – Labor Day; it was common courtesy. Now, there are exterior sites going full bore all over these areas. I understand people want their homes done and there were lost work hours due to weather this past winter/spring so there were delays, but, regardless, they are missing this season anyways. Should there be a Town ordinance regarding exterior construction June 15 – Labor Day? debatable; I like small government, free markets and by no means depriving someone from making a living. Should there be common courtesy? Always.
The market continues to be strong.
Year to Date:
2018 – Volume: $517mm; Median Price: $1.465mm; Average Price: $2.199mm.
2017 – Volume: $478mm, Median Price: $1.268mm; Average Price: $1.967mm.
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