Only twice in history has the real estate market on Nantucket exceeded $1 billion in property sales (in 2004 and 2005). Sales in 2014 were just over $1 billion, including foreclosure sales (of $11 million), an increase of a whopping 25% over 2013. The total number of sales was 528, compared to 468 in 2013, an increase of 11%. More importantly, the market is on more solid footing than it has been since the beginning of the recession. Properties are selling more rapidly, distressed sales now constitute a negligible portion of the total market and people are more confident about the economy in general. No wonder, given that the labor and housing markets have largely recovered, all 8.7 million jobs lost during the recession have been regained over the past 4 years and the majority of the country has seen growth in personal income. Interest rates remain low and the financial markets have been on an uninterrupted bull run for more than 1,100 days without a pullback as of the end of 2014. Add this to the fact that Nantucket is a rarefied market and it is easier to understand how we have rebounded from the recession.
The average selling price of all properties (residential, land and commercial) on Nantucket was $1,915,000 by year end, an increase of 19.80% over 2013. The average selling price for residential property topped $2 million for the first time since 2008; the median price was $1,275,000, up 27.56%. Vacant land was selling, on average, for $1,291,000 and the median price was $780,000, an increase of 13.45%. There were 19 sales of commercial property in 2014 for just over $40 million, compared to $14.4 million in 2013. The robust real estate activity in the commercial sector is a very strong indicator of rising consumer confidence. Commercial rentals have become very difficult to find, especially downtown.
Property Inventory is Down: During the height of the recession, at the end of 2009, there were 488 properties listed for sale on Nantucket. Today there are 269, a 40% difference. It is largely because of the low inventory that investors are, once again, confident doing projects on a speculative basis.
Margins Shrinking: In 2014 properties were selling, on average, for slightly over 95% of list price, a figure not seen in the past decade. Properties are now selling, on average, for 132% of assessed value. The last time this figure was over 130% was in 2006. What these numbers indicate is that there is an urgency in the current market that had been absent during the past 5 years. We had numerous situations this past year with multiple offers on the same property. And buyers have realized that the bottom of the market was prior to 2014.
Are all of the Good Deals Gone? To answer this definitively would require clairvoyance but we can say, with confidence, that we will likely look back on 2014-2015 as good years to buy. There are still pockets of relative opportunity in the marketplace. One must evaluate specific reasons and time frames for buying on Nantucket and each situation is different. Average prices are still not as high as they were in 2007-8 when the average price of a Nantucket property was over $2 million.
What Kind of Properties are Selling? There has been good activity in all price sectors this past year and those properties that are in updated and turn-key condition have been commanding a premium especially in locations such as Brant Point, Town, Siasconset and the Cliff areas. Features that continue to be important to buyers are proximity to the water, private pools and convenience to Town.
Why Buy on Nantucket? Many of us clearly remember the feeling we got when we first stepped foot on Nantucket. There is a special “otherness” about the island that is hard to articulate. We recognize it when we feel it and apparently others do as well! It has something to do with the history, the vast accessible open spaces, the water and quality of light and, of course, the people who live here. There is no place else like Nantucket.