Summer on Nantucket is in full swing and we are happy to be on island with access to the water and a daily ocean breeze. There are lots of activities for everyone ranging from sailing, classes in the decorative arts at the Nantucket Historical Association to strawberry picking at one of the farms. All of the restaurants are open and, with a little planning, it is possible to have some great dining options. There are lots of new shops and old favorites to explore as well.
It is always interesting to assess the Nantucket real estate market in the context of the bigger picture. There is a lot of speculation about a potential economic shift in the near future. It is likely that the Federal Reserve will be cutting interest rates at some point this year, for the first time since the end of 2008, as economic risks mount and inflation remains stuck below target. Stocks continue to inch toward record levels with the S&P 500 up 6.3% in June alone. A rate cut would help to counter economic headwinds, some of which is related to the trade war. After the longest economic expansion period in history, it feels as if we may be poised for a change.
The real estate market on Nantucket typically follows the financial markets. We are seeing a rising amount of inventory, what we will call “optimistic pricing” on the part of many sellers and buyers for whom a Nantucket purchase is entirely discretionary. These factors, combined with general uncertainty about the future, are contributing to the apparent slowdown in the market on island.
At the end of Q1, the number of sales on Nantucket were down 35% and the dollars were down 49%. By the end of Q2, the gap had closed somewhat with the number of sales (and the dollars) being down 20% from one year ago at the same time. This is still a shift in recent patterns.