Nantucket’s home sales have dropped but prices there continue to rise. This six-bedroom home in the Polpis area of the island is on sale for almost $5 million.
Home sales on Nantucket – a popular playground for the rich and famous – have plummeted more than 30 percent this year. But unlike other parts of the Bay State where prices have slipped, the median price for a single-family home on the island has continued its upward climb.
The median price for single-family homes sold from January through October of this year reached more than $1.5 million – a 9.7 percent increase from the same months last year, according to The Warren Group, parent company of Banker & Tradesman. The price increase has occurred at a time when the statewide single-family home price has fallen 4 percent to $329,900 during the first 10 months of the year.
The median single-family home price on Nantucket has exceeded $1 million since 2004. But even Nantucket, a destination that has long attracted affluent executives seeking vacation properties, is not escaping the housing slump that the rest of the state is experiencing. Some 161 single-family homes were sold through October of this year, down 31 percent from the same period in 2005 when 233 homes were sold, according to The Warren Group.
“We are drifting into something that can be called a buyer’s market out here,” said Roy Flanders, a longtime exclusive buyer’s agent on the island.
As in many Bay State communities, there was a significant jump in the number of for-sale properties on Nantucket .
H. Flint Ranney, who is the president of Denby Real Estate – which has been in business for almost 40 years – said there were over 600 homes on sale as of August, a peak in inventory that he hasn’t seen for at least five or six years.
The number of homes on the market has fallen to about 450, which is closer to the 370 to 425 homes listings that Nantucket brokers have seen in the last several years, according to Ranney.
The drop in inventory over the last few months has resulted because homeowners are taking their properties off the market, not because homes have sold, he explained.
“I think we’re probably in a buyer’s market, but the market on Nantucket is so unique it’s hard to tell whether it’s a buyer’s market or seller’s market,” said Ranney, who noted that the real estate market began cooling down in mid-summer. “I know that buyers are looking, but they’re not making offers. Maybe they’re waiting for prices to come down.”
Yet despite a drop-off in sales, home sellers haven’t been eager to slash prices. According to Ranney, there have been some price reductions but not a tremendous amount.
‘A Lack of Urgency’
Unlike other markets in Massachusetts, the Nantucket housing market is largely driven by second-home buyers. Eight out of 10 properties are owned by people who have primary residences elsewhere, Ranney said.
Stock market performance and employee bonuses are critical factors affecting residential real estate sales on the island. Another factor is peer pressure, says Ranney. When one corporate executive purchases a home on Nantucket, it can push colleagues to do the same, according to Ranney.
This year, some homeowners were driven to put their homes on the market after seeing the sharp rise in prices over the last several years, according to local brokers. The median selling price for a single-family home has nearly doubled in the last five years, jumping from $719,000 in 2000 to more than $1.4 million in 2005, according to The Warren Group.
But unlike home sellers in other markets who have to move because of a job transfer or some other life-changing event, many of Nantucket’s homeowners don’t have to sell. So if they’re not getting a purchase offer that they like, they can wait it out, according to local real estate agents.
“Nobody out here has to buy or has to sell. No one, to my knowledge, has been given a job that requires them to move to Nantucket,” said Flanders, who operates Pro Buyer Assoc.
Penny Dey, co-owner of Atlantic East Real Estate, said buyers are taking their time.
“There is a lack of urgency right now on the part of buyers who are being cautious,” Dey said. “On Nantucket, it’s a discretionary purchase. It’s not something that people have to do. I will say now that when a listing comes on the market and it’s priced correctly there is multiple interest.”
Despite the slower sales pace, there have been some notable home sales this year. Dey’s company handled the sale of two contiguous properties in Shimmow that included a home with views of the upper harbor for $21.5 million in September.
An 8,300-square-foot mansion along the beach on Nantucket’s South Shore that sits on a 9-acre parcel fetched more than $18.2 million in April, while a property on Hinckley Lane in the Cliff area of the island sold for more than $15.8 million in May. In July, a 25-acre property in Polpis with a home and two guest houses sold for $15.5 million, and just last month a 3,000-square-foot harbor-front home on 3.6 acres in Monomoy went for $16 million.
While home prices have surged, land values have skyrocketed. The price of an average lot, a little larger than an acre, is $2.4 million, said Ranney.
Brokers like Ranney and Flanders say they don’t see signs that the island’s housing market is stabilizing. In fact, Ranney said he expects sales to remain slow for next year. But he acknowledged that once Wall Street bonuses begin flowing, sales activity could pick up significantly in January and February.
