Residents of Massachusetts famed resort islands have more to worry about than sharks this summer, with Nantucket’s median sale price struggling to get back to the $1 million mark, and parts of Martha’s Vineyard seeming suddenly affordable – at least by Boston-area standards.
It’s quite a comedown, with falling prices accompanied by a smattering of foreclosures, another trend no one would have predicted a few years ago for either super-wealthy resort island.
After all, Nantucket has long been a buttoned-down refuge for the elite of the corporate world, while Martha’s Vineyard has been a magnet for celebrities and politicians, including two presidents.
Long after prices began to tank in the rest of the state, real estate values on both islands appeared golden and all but untouchable. But the tougher times ushered in by the dark fall of 2008 hit hard, with Nantucket values bearing the brunt.
And while there have been a few recent signs that prices may be finally turning up again, it is likely to be a long climb back, with luxury properties struggling nationwide.
Back To Reality
Apparently the estate of manufacturing tycoon Russell Dale Phelon never got the memo on Nantucket’s big price plunge. The 60-acre spread has been listed for an astonishing $59 million.
Sure, it’s generated lots of silly headlines. But given current realities, that is the equivalent of a moon shot, three times more than the most expensive mansion ever sold in Massachusetts, on an island where prices have fallen by half since the bubble years. The highest sale so far this year on Nantucket is $7.85 million, according to data obtained from The Warren Group, publisher of Banker & Tradesman.
That’s right. The fact is, these are not boom times on Nantucket, with the median home price on the island plunging from a high of $1.6 million in the spring of 2006 to $1.1 million last year to less than a million so far this year, The Warren Group reports.
Yes, the 1 percent continues to rake in the bonuses and stock options, but the heady times of the 2000s that made all real estate on Nantucket golden are long gone.
The likes Dennis Kozlowski, the former Tyco chief who looted $100 million from the company he ran, had lots to spend, and he blew millions on his seaside Nantucket resort.
Back in those days, a million was barely enough to get you a seaside shack or a guest house for your au pair, let alone a real live house.
In fact, Kozlowski and his now ex-wife were leading members of the Nantucket social set – but their estate was bulldozed last year to make way for a new manse after being sold for $13.5 million. The remaining contents were donated to Habitat for Humanity.
And let’s not forget about the growing number of foreclosures, with two listed in June, including a duplex at 8 Anna Drive that had last fetched nearly $1 million in 2006.
Martha’s Vineyard has fared somewhat better – after all, the political class that favors the islands has seen its fortunes rise, even if it is no more beloved than its corporate counterparts.
The median price in West Tisbury, for example, is back over $1 million, roughly back where it was in 2006. But by contrast, the median price in tony Edgartown fell to $655,000 this spring, after nearing $1 million last year.
Hitting Bottom?
Of course, bad times for island sellers could mean opportunities for some buyers who could not have afforded to look on the island a few years ago. In fact, some brokers even claim there are signs that Nantucket prices may have finally hit bottom.
The number of homes sold on the island was also up this spring compared to last year, with 175 homes sold during the first six months, the best stretch since 2007, according to Windwalker Real Estate.
The island brokerage is even calling it the “last best chance” to get deals on Nantucket.
“June real estate activity provided a strong finish to what has been a stellar first half, indicating that the Nantucket real estate market has finally escaped the shadow of the Downturn,” Windwalker noted in a recent market report.
Admittedly it’s fun to gloat a bit over Nantucket’s real estate woes and the “more money, more problems” sagas of the rich. But if anything, the rich face growing trouble unloading their properties, national stats show.
According to RealtyTrac, owners of homes worth more than $1 million have been forced to slash prices on average by 20 percent nationwide. Brokers have even taken to calling it “The Year of Capitulation” for rich sellers, according to USA Today.
Given that, it sounds like we will be seeing white flags flying over Nantucket for some time to come.
