NANTUCKET - Last year, the Nantucket real estate market reached uncharted territory – more than $1 billion in total sales – and the question on many minds was whether the boom could continue.
Apparently it has. Bolstered by the $75 million sale of more than 100 downtown storefronts, offices and apartments to Nantucket Island Resorts’ Steve Karp, total dollar volume for 2005 reached $1 billion by Halloween, and could near $1.3 billion if the $220 million in sales currently on the books close by the end of the year, island real estate brokers said last week.
Even without the Karp deal, the market has been strong in all sectors. There were 577 transactions totaling $1.03 billion through Oct. 31, up 18 percent from the first 10 months of 2004. The average home price on Nantucket this year is $2.1 million, and the median price – the exact middle of the market – is $1.4 million, both record highs.
‘’All segments of the market are doing fine. The first level of the market, at around $1 million, which I hesitate to call the bottom, is generally too expensive for the locals, but it is providing off-islanders the chance to get in the market,’’ said Alan Worden, president of Windwalker Real Estate.
‘’It might not be their dream home, and they’re probably not going to be there forever, but it is a foot in the door,’’ he said.
Nantucket homes are staying on the market an average of seven months, and selling for around 93 percent of their asking price, according to statistics compiled by Denby Real Estate owner H. Flint Ranney for the Nantucket Association of Real Estate Brokers.
Fueled by the upper end of a baby boomer generation that’s reaching the peak of its earning potential, the market is being driven by the simple law of supply and demand, island real estate agents said.
‘’It’s the uniqueness of Nantucket and the scarcity of the product,’’ said Greg McKechnie, co-owner of Great Point Properties. ‘’We are attracting people from different resort communities like the Hamptons, and then there are the people of means that have had their sights on Nantucket for years, and now want to make that dream of Nantucket a reality, and there is more affluence out there than ever. It’s word of mouth. The recent media hype, both positive and negative, has only helped to bring Nantucket further into the spotlight.’‘
In recent months, a number of residential vacation properties have sold for more than $5 million, including 45 Cliff Road, for $16.76 million, and 41 Eel Point Road, for $12.9 million. There is currently an accepted offer on the late island benefactor Grace Grossman’s 25-acre compound on Wauwinet Road, and while the brokers involved won’t disclose the price, it’s in the neighborhood of $18 million, those familiar with the deal said.
Nantucket properties have appreciated on average 14 percent a year for the past decade, Worden said. And he doesn’t see it slowing down any time soon.
‘’You have less land and more demand, and a sizable market with the means to afford it,’’ he said. ‘’Essentially, it’s not complicated. It’s a supply and demand issue.’‘
McKechnie agreed, but predicted some leveling off in the market.
‘’We’ll continue to see a healthy appreciation, but 14 percent a year is not sustainable,’’ he said.
While some prices may have dipped recently, island brokers attributed that to the time of year and some properties being slightly overpriced.
‘’I think some of the price reductions you’re seeing now is not because the market is coming down, it’s because a number of sellers overshot on their asking price,’’ Worden said.
There’s also been a rise in inventory, possibly signaling a slight shift toward more of a ‘’buyer’s market,’’ Penny Dey of Atlantic East Real Estate said.
(Published: November 14, 2005)