Its a month later and 4 of the 13 Parcels of land under $1M are under agreement or sold, plus one new listing is U/A. 115 Surfside Rd sold on 6/7 for $900,000 which I hadnt noticed. A new listing on 2 acres at 5 Felcon Dr for $795K went under agreement immediately on July 4th after being on the market less than one day. Its kind of like putting a market order in to sell stock at lower than the going price, it will sell immediately. Also 20A York, 24 Field Ave, and 10 Alexandia have gone under agreement.
New on the under $1M list are lots off of Bartlett Rd on a new road called Grey Lady Ln (cool name!). This whole thing was recently for sale for $4.2M as a subdividable 54 Bartlett Rd (although its on the town map as 52R Bartlett Rd). As crazy as $4.2M for anything on Bartlett Rd sounds (predominantly a year round neighborhood), it is nearly 2 acres and is subdividable into 13 lots. $4.2M divided by 13 equals $323,077 each. All of a sudden it makes sense!
There were no takers, however, so the owners, with some help from a local broker (now a partner by the looks of it), have changed the game by dividing it themselves and selling the lots off individually. They took one lot off by including a community pool and pool cabana, nearly an identical plan as Finback Ln across the street (although Finback has much more green space which every lot borders). The first 6 lots are for sale for $675K each (3), one for $725K and 2 for $650K each, or $4.05M total...so far...thats only 6 of the 12 lots. It doesnt stop there because there are 4 more lots labeled "Golf Course Lots" because they border the Miacomet Golf Course. These lots havent been listed yet but one would surmise they would be listed higher than the $725K lot because of the view across the golf course. How much more? I dunno, guessing $795K? There are also 2 more lots (lots 1 and 2) on the left as you pull in, which would be lower priced lots ($650K?). The last lot sale on Finback was $525K about a year ago and home sales ranging from $1.6M in 2014 to $2M recently. So one could estimate similar prices here. So we have an approximate total of $8,530,000 minus the cost of the road, sewer, water piping, sidewalks, curbing, pool, and pool cabana. All this, with permits, engineering, etc, etc could cost around $600-$700K, so a net profit of "only" about $3,630,000. Even if I'm short on the expenses, they are still doing very well here. That $4.2M isnt looking so bad now, is it?
Update 7/28/17 The rest of the lots are now listed with the "Golf Course" lots 875K and 895K, which brings the grand total of all asking prices on Grey Lady Ln to $8,845,000.
The $675K lots would be a 28.5% jump from the last lot sale 15 months ago on Finback and 32.5% of a $2M final value. This is right about where the spec builder I talked about on the old site that built 1 Long Pond Rd paid for his next lot at 48A West Chester St ($885K is 32.8% of the beginning $2.695M asking price, while at 1 Long Pond his land cost in Sept 2014 was 27.5% of his beginning asking price and 30.1% of the final sale price...land costs are creeping up!). While these might sell for a little less (All else being equal I would prefer Finback over Grey Lady since there is much more green space), they will still make a bundle on this...eventually. The guy who owns this (since 1974 if the town record is correct) will be a perfect candidate for a 1031 exchange (or 12 of them).
3 Mary Ann Ln, out by the Airport, has been reduced from $475K to $444K.
A lot off Old South Rd at 31 Pine Crest Ln (not far from the 3 Mary Ann above) has come on the market for $459K.
A lot at 3 Tetawkimmo has come on the market for $950K which is an expensive 47.5% of the usual $2Mish sale in this neighborhood, although there is some promise of higher sales in the future. It is the first lot on the right so you have every other lot owner driving by (23 of them with 5 more possible, which is why I always prefer to be at the end of the road rather than the beginning) and it is across from the old sandpit which has created complaints of noise and dust in the past. You also get a fair amount of airplane noise here as this is sort of in line with Runway 6/24 which is only .9 miles away. Its not directly in line but many flights "curve in" to the runway. You should go hang out for a while on this lot on different days with different wind directions if you are interested in this lot. The last lot sale in here was in 2014 for $605K and it took forever to sell (a little bit different of a market now though!). Still, I'd give a value of about $650K here, $950K just seems too high to me (which probably means someone is typing up a $900K offer as I type this).
There is also a $775K lot at 31 Madaket Rd which is part of a small farm that is being split up and sold. You can still buy the whole thing though if you want.
Monday, July 17, 2017
Wednesday, July 12, 2017
Gone in 60 Seconds
A large 2 acre lot came on the market at 5 Felcon Dr, which is off South Shore Rd (Sewer Bed Rd) in what looks like a used-to-be large family plot that has been subdivided. Its about 1/2 mile from the waste water treatment plant, so not as much of a "sniff factor" as the 24 Field Ave lot I talked about. The price? $795,000 (134.7% of assessed, a little below last years average sale of 136%, so a low starting point). Ding! Gone in 60... well, one day, or some fraction thereof. If a good deal comes up, you need to move on it immediately, especially with vacant land.
I also noticed a new listing at 6 & 4 Seven Mile Ln in Sconset for $2.85M for both. There is a house on #6 as well as the vacant lot at #4 that I talked about earlier and liked. This is not a bad deal! The house is OK-Nice, could use a little updating or nicer finishings but certainly a great start. This all borders hundreds of acres of conservation land out the back door. A 95% offer is $2.7M Not a bad deal, I dont expect this to last long.
Another development in the Land for under $1M is the listing of 3 Friendship Ln. This sold a while back (9/8/14) for $390,000. The buyer added HDC approved plans and sold it for $480,000 on 9/8/16 (yes exactly 2 years later). The present owner is trying to get $710,000, or a 47.9% profit in 10 months. At this price it is a very expensive 59% of the approx $1.2M upper end value for this neighborhood. It will be interesting to see what it goes for this time.
Another interesting listing demonstrating how people are making $$$ (or at least trying to) is 1 Jefferson Ln in Town for $1,500,000. This is the rear 1 BR 1 BA 776 sq ft cottage to 55 Fair St and because it is 50 years old it can be subdivided off the original house. Also because it is not an antique, you can take the cottage to the dump on Sunday. The sale comes with plans for your new residence AND accessory cottage, all on a 3626 sq ft "spin-off" lot. Your lawn mower guy sure isnt going to take long! The original house, which originally included this cottage, sold on April 28, 2017, or 3 months ago, for $2.25M. In other words if they get their $1.5M, the original house will have only cost them $750K, which they can then sell for around $1.5-1.6M, so a total gross profit of about $750K, or 33.3% in less than a year (only 3 months if they sold it tomorrow). A $1.5M sale here would represent 156% of the assessment of the land. This is yet another example of buy the original dividable property and spin off the "dividend", lowering your cost of the main.
I also noticed a new listing at 6 & 4 Seven Mile Ln in Sconset for $2.85M for both. There is a house on #6 as well as the vacant lot at #4 that I talked about earlier and liked. This is not a bad deal! The house is OK-Nice, could use a little updating or nicer finishings but certainly a great start. This all borders hundreds of acres of conservation land out the back door. A 95% offer is $2.7M Not a bad deal, I dont expect this to last long.
Another development in the Land for under $1M is the listing of 3 Friendship Ln. This sold a while back (9/8/14) for $390,000. The buyer added HDC approved plans and sold it for $480,000 on 9/8/16 (yes exactly 2 years later). The present owner is trying to get $710,000, or a 47.9% profit in 10 months. At this price it is a very expensive 59% of the approx $1.2M upper end value for this neighborhood. It will be interesting to see what it goes for this time.
Another interesting listing demonstrating how people are making $$$ (or at least trying to) is 1 Jefferson Ln in Town for $1,500,000. This is the rear 1 BR 1 BA 776 sq ft cottage to 55 Fair St and because it is 50 years old it can be subdivided off the original house. Also because it is not an antique, you can take the cottage to the dump on Sunday. The sale comes with plans for your new residence AND accessory cottage, all on a 3626 sq ft "spin-off" lot. Your lawn mower guy sure isnt going to take long! The original house, which originally included this cottage, sold on April 28, 2017, or 3 months ago, for $2.25M. In other words if they get their $1.5M, the original house will have only cost them $750K, which they can then sell for around $1.5-1.6M, so a total gross profit of about $750K, or 33.3% in less than a year (only 3 months if they sold it tomorrow). A $1.5M sale here would represent 156% of the assessment of the land. This is yet another example of buy the original dividable property and spin off the "dividend", lowering your cost of the main.
Saturday, June 17, 2017
1031 Exchanges
Here I'll explain some of the basic principles of the IRS sect 1031 tax DEFERRED (NOT tax FREE) exchange program. I had a few people call about the lot that had "1031 money they had to get rid of". If you are selling a property that you have a big cap gain on, you may want to consider doing a 1031 exchange. While there are some very strict unbendable rules and deadlines in the beginning, the back end of the exchange is, well, apparently sort of vague.
I'm not a lawyer nor tax attorney, so take this for what its worth. There is a lot of info online but I found a lot of it was ...not exactly correct. I got bad info from real estate agents that have been involved in 1031 transactions and lawyers, and homeowners who have done exchanges themselves! It seemed if you asked 10 people, you got 10 different answers. If you want an 11th wrong answer, call the IRS directly. The people who really know are the exchange intermediary companies, which are the companies that hold and disburse your money.
Some basic bullet points.
- First thing is, you have to use an exchange intermediary company. I used the one recommended by my lawyer since she had used them before and no one was sent to jail. This means the money from your sale goes directly to them, NOT to you. Its like an IRA rollover, the money never touches your hands. So, unless you take cash out up front (which you can but you will have to pay taxes on it), you walk out of closing with some paperwork with numbers on it and no money. Some company you have never dealt with (nor probably heard of) has all your money. Yea thats a little freaky.
- The intermediary company I used charged $1200 which included the first replacement property. There was a $200 charge for each additional property. I bought 4 properties with my proceeds so the total charge was $1800. I'm sure there are cheaper companies out there, but this wasnt something I was willing to "Dollar Tree". Doing the exchange allowed me to keep enough money working for ME (rather than the IRS) that I was able to buy another rental house (call it the 4th purchase). Net income after property taxes and insurance on that home pays that $1800 about every 2 months. If you look at it on a ROI basis, thats a 600% annual return on your money (the $1800) every year, not including appreciation in the underlying real estate. If you have a large cap gain, you are probably crazy not to do this.
- These are "like kind" investment exchanges, real estate for real estate, collector cars for collector cars, etc. As you can imagine, the definition of "like kind" could garner some confusion...or argument with the IRS. Basically, you cant sell your $1 million baseball card collection and buy real estate, but you CAN buy improved property (house or commercial) to replace unimproved property that you sold (land), or real property for real property. Its "like kind", not "exact kind" since no two pieces of real estate are exactly alike.
- If you are selling a house that was your primary residence, keep in mind that this is for "investment property" for "investment" property, NOT your primary residence. Besides unless you have a $250K gain if single, $500K if married, you arent paying any cap gains on the sale of your house anyway (as long as it was your primary residence 2 out of the last 5 years), so a 1031 is likely moot. If you are buying a home with this money (or some of this money)that will be your primary residence, you will need to take that money out of the exchange and pay taxes on it. In other words if you are buying a $200K house, you will need $266K to pay the taxes and have the $200K left for the house.
An interesting question for a tax accountant would be if you lived in the house 2 out of the last 5 but rented it out the last 2 years, could you treat it as both your primary, get the $250/500K deduction AND treat it as an investment property for a 1031 exchange for the profit over the $250/500K? Hmmm! While this would be an unlikely scenario in "America" because you would have to have a very large gain to make it worthwhile, I could certainly see this possibility on Nantucket.
This brings up another often heard rule with these that is incorrect: You have to spend ALL the money on the replacement property...this is FALSE...with a "but".
- You DO NOT have to spend ALL your proceeds from the sale on replacement properties. BUT, the money you do not spend is called "Boot" and IS taxable. So if you want to buy yourself a house, or treat yourself to a new car, you will need to take MORE than the cost of those things out of the exchange so you have the money to pay the taxes on that money (unless you have a bucket of cash hanging around, of course). So if you want that $50,000 Lexus, take out $66,666 so when you pay your 20% federal and 5% Mass tax (25% total), you have the $50K for the car plus the $16,666 (25% of $66,666) for The Man. You might as well take out the sales tax if you live in Mass ($4166 which includes the 25% tax. Yep, thats tax on tax! Isnt that just lovely?). If you live in SC the max sales tax on a car is $300 (YES its $3866 cheaper to buy your $50,000 Lexus in SC than in MA, isnt that just lovely too?).
- If this was your principle residence for 2 of the last 5 years, you dont pay any cap gains for the first $250,000 of profit if you are single, $500,000 if you are married. So if this is the case, chances are you are not going to have any tax liability anyway, so moot point. For me it was land that I was selling, so I didnt get this break even though I owned it for 17 years. Doing the 1031 in my case made the difference in buying an additional property that pays the cost of the exchange company's fee every 2 months, so it was a no brainer for me. If you are lucky and have property on Nantucket thats worth a bundle, your situation may make mine look like a lemonade stand.
- This is an investment exchange. That means you are selling "investment property" and buying replacement "investment property", so like a trade. It does NOT mean you have to buy anything from the buyer of your property. I sold my land in MA and bought property (4 actually) in SC from 4 completely different people.
- You will need to have language in your contracts (both buying and selling) that state this transaction is part of an IRS 1031 exchange and buyer or seller agrees to cooperate in. Sometimes it will state at the exchanger's expense (if there is any). Some people are worried it will complicate matters for them, or cost them something. It really doesnt.
- You have 45 DAYS (calendar days including weekends and holidays) from the sale of your property to identify (meaning fill out and sign a form) possible replacement property or properties. This is BY FAR the most important part of these exchanges. This 45 days goes FAST. If you dont identify ANY properties by this date, the exchange is over and the entire amount of the gain in your sale is Boot and is taxable. You should have done a lot of research on properties you are interested in before yours even closes so you can hit the ground running. I did 10 years worth LOL.
- You have 180 days (not 6 months! 180 calendar days!) to CLOSE on those properties. Since you are now a cash buyer, closing is usually not a problem (I had all my replacement properties closed in 70 days). The exchange company I dealt with wanted only 2 days notice for disbursements, so you could literally close in a few days. Dont do that though! Use that due diligence time (note: 10 BUSINESS days is better than just "10 days") everyone puts in contracts so you can get inspections and to allow for a title search, etc. If for some (ANY) reason you dont close on your identified properties within that 180 day time frame, that amount becomes Boot and is taxable. So, if you close on that $200,000 house on day 181, you might be liable for a $50,000 tax bill! For this reason, I would stay away from things that can drag on like foreclosures and especially short sales!
- You can identify up to 3 replacement properties of ANY VALUE. In other words if your property sold for $1M, you can identify 3 $1M properties, etc. OR:
- You can identify up to SIX replacement properties so long as the TOTAL value of those properties does not exceed TWICE the value of what you sold. This is known as the 200% rule. So if you sold that property for $1M, make sure the total value of your identified replacements doesnt add up to more than $2M if you identify 4, 5, or 6 properties. There is a form you fill out where you list your selections, and you can stipulate how many of those properties you intend to purchase. When I was getting close to the end of the 45 day period, I already had closed on 3 properties, with one more to go that was going to close after the 45 days were up, so I picked 2 more properties as a safety net in case something blew up with the last deal. Once that 45 days is up, you cannot go back and change anything on that list! I stipulated that I intended to buy only 4 of the 6 listed properties, so once I closed on the 4th property, the exchange ended and any leftover money came to me (as Boot and it is taxable, of course). Had I not stipulated that I was only buying 4 of the 6 properties I identified, I would have had to wait until the natural expiration of the exchange (180 days from the sale) to get my residual cash, which at this point was nearly 4 months away (actually its July 2, 2017, hasnt even come yet and all this seems like years ago already).
- There are ways you can identify more than 6 (95% rule) but it gets pretty complicated and probably applies to nearly no one so I wont get into it here.
- Cost Basis Pro ration. You will, of course, need to figure your cost basis for the property you are selling. This will be what you paid for it (or what whoever gave it to you paid for it), what you put into it for improvements, property taxes, etc. Once you have that, it gets transferred to the new replacement property (ies). That is now the cost basis for the new property. If you buy more than one replacement property, the cost basis gets assigned to the new properties according to their proportion of the proceeds that were used to buy them. In other words if the cost basis of your $1M sale was $100K, and you bought 3 properties costing $300K, $400k, $200K and say you took $100K out in cash, the cost basis would get doled out at $30K, $40K, $20K and $10K respectively. So your 100K cash-out would actually be figured on 90K because 10% of the cost basis gets assigned to it. You will notice you now have big cap gains in the new properties just like you did on the original property. You didnt avoid it, you deferred it. I initially hoped I could assign my cost basis anywhere I wanted, like the cash-out so I wouldnt have to pay taxes on it...(yes that would have put a near zero cost basis on the rental properties I bought), but thats not how it works (Bummer! It will have to be a used Lexus...actually I like old Mercedes, early 70's models like the 280SEL).
- Fixer Uppers. There is a provision for putting improvement costs of the new (replacement) properties in the exchange, BUT you cannot close until after they are finished (set up some trust with your lawyer? I dunno), and the 180 Day rule still applies. This almost NEVER works out and I would completely avoid it. If your replacement property needs repairs, use out-of-exchange money to do it rather (which makes it cost more in order to pay the tax on it) than risk a tax liability on the entire purchase price of the house. This will likely limit the "fixerupperness" of the properties you might buy. It caused me to avoid them completely.
- Can you EVER live in any of your replacement properties? The ambiguous answer I get is "They like to see at least a year...or two... of investment income before you claim it as a principal residence."
Hmmm. So I can, after a year....or two...move in and call it my primary residence? Stay there for 2 years, then sell it capturing the tax FREE (not deferred) $250K/$500K, which would wipe out any cap gains tax at all (in most properties anyway)? Its not spelled out, and like I said above it is vague, but apparently thats what some people are doing. So I guess the answer is yeaIguesssomaybesortofbutnotofficially.
I'm not a lawyer nor tax attorney, so take this for what its worth. There is a lot of info online but I found a lot of it was ...not exactly correct. I got bad info from real estate agents that have been involved in 1031 transactions and lawyers, and homeowners who have done exchanges themselves! It seemed if you asked 10 people, you got 10 different answers. If you want an 11th wrong answer, call the IRS directly. The people who really know are the exchange intermediary companies, which are the companies that hold and disburse your money.
Some basic bullet points.
- First thing is, you have to use an exchange intermediary company. I used the one recommended by my lawyer since she had used them before and no one was sent to jail. This means the money from your sale goes directly to them, NOT to you. Its like an IRA rollover, the money never touches your hands. So, unless you take cash out up front (which you can but you will have to pay taxes on it), you walk out of closing with some paperwork with numbers on it and no money. Some company you have never dealt with (nor probably heard of) has all your money. Yea thats a little freaky.
- The intermediary company I used charged $1200 which included the first replacement property. There was a $200 charge for each additional property. I bought 4 properties with my proceeds so the total charge was $1800. I'm sure there are cheaper companies out there, but this wasnt something I was willing to "Dollar Tree". Doing the exchange allowed me to keep enough money working for ME (rather than the IRS) that I was able to buy another rental house (call it the 4th purchase). Net income after property taxes and insurance on that home pays that $1800 about every 2 months. If you look at it on a ROI basis, thats a 600% annual return on your money (the $1800) every year, not including appreciation in the underlying real estate. If you have a large cap gain, you are probably crazy not to do this.
- These are "like kind" investment exchanges, real estate for real estate, collector cars for collector cars, etc. As you can imagine, the definition of "like kind" could garner some confusion...or argument with the IRS. Basically, you cant sell your $1 million baseball card collection and buy real estate, but you CAN buy improved property (house or commercial) to replace unimproved property that you sold (land), or real property for real property. Its "like kind", not "exact kind" since no two pieces of real estate are exactly alike.
- If you are selling a house that was your primary residence, keep in mind that this is for "investment property" for "investment" property, NOT your primary residence. Besides unless you have a $250K gain if single, $500K if married, you arent paying any cap gains on the sale of your house anyway (as long as it was your primary residence 2 out of the last 5 years), so a 1031 is likely moot. If you are buying a home with this money (or some of this money)that will be your primary residence, you will need to take that money out of the exchange and pay taxes on it. In other words if you are buying a $200K house, you will need $266K to pay the taxes and have the $200K left for the house.
An interesting question for a tax accountant would be if you lived in the house 2 out of the last 5 but rented it out the last 2 years, could you treat it as both your primary, get the $250/500K deduction AND treat it as an investment property for a 1031 exchange for the profit over the $250/500K? Hmmm! While this would be an unlikely scenario in "America" because you would have to have a very large gain to make it worthwhile, I could certainly see this possibility on Nantucket.
This brings up another often heard rule with these that is incorrect: You have to spend ALL the money on the replacement property...this is FALSE...with a "but".
- You DO NOT have to spend ALL your proceeds from the sale on replacement properties. BUT, the money you do not spend is called "Boot" and IS taxable. So if you want to buy yourself a house, or treat yourself to a new car, you will need to take MORE than the cost of those things out of the exchange so you have the money to pay the taxes on that money (unless you have a bucket of cash hanging around, of course). So if you want that $50,000 Lexus, take out $66,666 so when you pay your 20% federal and 5% Mass tax (25% total), you have the $50K for the car plus the $16,666 (25% of $66,666) for The Man. You might as well take out the sales tax if you live in Mass ($4166 which includes the 25% tax. Yep, thats tax on tax! Isnt that just lovely?). If you live in SC the max sales tax on a car is $300 (YES its $3866 cheaper to buy your $50,000 Lexus in SC than in MA, isnt that just lovely too?).
- If this was your principle residence for 2 of the last 5 years, you dont pay any cap gains for the first $250,000 of profit if you are single, $500,000 if you are married. So if this is the case, chances are you are not going to have any tax liability anyway, so moot point. For me it was land that I was selling, so I didnt get this break even though I owned it for 17 years. Doing the 1031 in my case made the difference in buying an additional property that pays the cost of the exchange company's fee every 2 months, so it was a no brainer for me. If you are lucky and have property on Nantucket thats worth a bundle, your situation may make mine look like a lemonade stand.
- This is an investment exchange. That means you are selling "investment property" and buying replacement "investment property", so like a trade. It does NOT mean you have to buy anything from the buyer of your property. I sold my land in MA and bought property (4 actually) in SC from 4 completely different people.
- You will need to have language in your contracts (both buying and selling) that state this transaction is part of an IRS 1031 exchange and buyer or seller agrees to cooperate in. Sometimes it will state at the exchanger's expense (if there is any). Some people are worried it will complicate matters for them, or cost them something. It really doesnt.
- You have 45 DAYS (calendar days including weekends and holidays) from the sale of your property to identify (meaning fill out and sign a form) possible replacement property or properties. This is BY FAR the most important part of these exchanges. This 45 days goes FAST. If you dont identify ANY properties by this date, the exchange is over and the entire amount of the gain in your sale is Boot and is taxable. You should have done a lot of research on properties you are interested in before yours even closes so you can hit the ground running. I did 10 years worth LOL.
- You have 180 days (not 6 months! 180 calendar days!) to CLOSE on those properties. Since you are now a cash buyer, closing is usually not a problem (I had all my replacement properties closed in 70 days). The exchange company I dealt with wanted only 2 days notice for disbursements, so you could literally close in a few days. Dont do that though! Use that due diligence time (note: 10 BUSINESS days is better than just "10 days") everyone puts in contracts so you can get inspections and to allow for a title search, etc. If for some (ANY) reason you dont close on your identified properties within that 180 day time frame, that amount becomes Boot and is taxable. So, if you close on that $200,000 house on day 181, you might be liable for a $50,000 tax bill! For this reason, I would stay away from things that can drag on like foreclosures and especially short sales!
- You can identify up to 3 replacement properties of ANY VALUE. In other words if your property sold for $1M, you can identify 3 $1M properties, etc. OR:
- You can identify up to SIX replacement properties so long as the TOTAL value of those properties does not exceed TWICE the value of what you sold. This is known as the 200% rule. So if you sold that property for $1M, make sure the total value of your identified replacements doesnt add up to more than $2M if you identify 4, 5, or 6 properties. There is a form you fill out where you list your selections, and you can stipulate how many of those properties you intend to purchase. When I was getting close to the end of the 45 day period, I already had closed on 3 properties, with one more to go that was going to close after the 45 days were up, so I picked 2 more properties as a safety net in case something blew up with the last deal. Once that 45 days is up, you cannot go back and change anything on that list! I stipulated that I intended to buy only 4 of the 6 listed properties, so once I closed on the 4th property, the exchange ended and any leftover money came to me (as Boot and it is taxable, of course). Had I not stipulated that I was only buying 4 of the 6 properties I identified, I would have had to wait until the natural expiration of the exchange (180 days from the sale) to get my residual cash, which at this point was nearly 4 months away (actually its July 2, 2017, hasnt even come yet and all this seems like years ago already).
- There are ways you can identify more than 6 (95% rule) but it gets pretty complicated and probably applies to nearly no one so I wont get into it here.
- Cost Basis Pro ration. You will, of course, need to figure your cost basis for the property you are selling. This will be what you paid for it (or what whoever gave it to you paid for it), what you put into it for improvements, property taxes, etc. Once you have that, it gets transferred to the new replacement property (ies). That is now the cost basis for the new property. If you buy more than one replacement property, the cost basis gets assigned to the new properties according to their proportion of the proceeds that were used to buy them. In other words if the cost basis of your $1M sale was $100K, and you bought 3 properties costing $300K, $400k, $200K and say you took $100K out in cash, the cost basis would get doled out at $30K, $40K, $20K and $10K respectively. So your 100K cash-out would actually be figured on 90K because 10% of the cost basis gets assigned to it. You will notice you now have big cap gains in the new properties just like you did on the original property. You didnt avoid it, you deferred it. I initially hoped I could assign my cost basis anywhere I wanted, like the cash-out so I wouldnt have to pay taxes on it...(yes that would have put a near zero cost basis on the rental properties I bought), but thats not how it works (Bummer! It will have to be a used Lexus...actually I like old Mercedes, early 70's models like the 280SEL).
- Fixer Uppers. There is a provision for putting improvement costs of the new (replacement) properties in the exchange, BUT you cannot close until after they are finished (set up some trust with your lawyer? I dunno), and the 180 Day rule still applies. This almost NEVER works out and I would completely avoid it. If your replacement property needs repairs, use out-of-exchange money to do it rather (which makes it cost more in order to pay the tax on it) than risk a tax liability on the entire purchase price of the house. This will likely limit the "fixerupperness" of the properties you might buy. It caused me to avoid them completely.
- Can you EVER live in any of your replacement properties? The ambiguous answer I get is "They like to see at least a year...or two... of investment income before you claim it as a principal residence."
Hmmm. So I can, after a year....or two...move in and call it my primary residence? Stay there for 2 years, then sell it capturing the tax FREE (not deferred) $250K/$500K, which would wipe out any cap gains tax at all (in most properties anyway)? Its not spelled out, and like I said above it is vague, but apparently thats what some people are doing. So I guess the answer is yeaIguesssomaybesortofbutnotofficially.
Deal Of The Isle 6/17/17
Here I'll post what I think are the best deals on Nantucket. This doesnt mean they are huge bargains nor the cheapest properties on the market, everything is relative. But, these are some properties I like. I'm not working for or represent any island brokers, and generally any agent can show you any house, so who you pick for your agent is entirely up to you.
If you copy and paste into google "Nantucket LINK xxxxx" the listings should come up.
307 Polpis Rd Nantucket LINK 80890 I found this to be the best deal in land because of its price and large compound potential. This, along with the long listing time (2 years) make this ripe for an offer. (UPDATE under agreement 6/23/17)
62 Washington Ave, Madaket, $1.090,000. Nantucket LINK 83291 There arent too many old cottages left on Nantucket, and while I wouldnt call this an antique and probably wouldnt be classified as "Old Madaket" in its truest sense, its still kind of "oldish". Probably a bit of the value here is potential second floor water views, but I like the little ole cottage as it is. Yea its a little cottage and yea its $1M... yea its Nantucket. That said I think the price is OK and will probably sell quick for anywhere over $900K, with an upward bias because there is Jack Squat as far as properties around $1M. Judging by the asking price I would say they are hoping for $1.05M, would probably take $1.0M, with the question being would they take $950K? You dont know until you shove the offer in their face.
20 Miacomet Rd $2,300,000 Nantucket LINK 83332 I like the post and beam architecture (I almost built one on 2 Camelia and still may on the marsh front property I bought down here in SC), and I like the large 2 acre lot, which seems huge to me maybe because it is 16 times the size of the lot I sold! The price here looks good to me, its a lot of house and a lot of lot for the money.
4 Quidnet Rd $2,895,000 Nantucket LINK 82835 This is an old wireless internet customer of mine. I've always liked this house and how it is set way back from the road (the driveway is actually off of Polpis). The cottage in back with its separate entrance could be rented out and you would never see them, its like an entirely separate property. This has been for sale for a while and is about $1M off its original asking price. I'm surprised that its still available, especially at this price.
1 West Chester St EXT $8,750,000 Nantucket LINK 82652 This also was a wireless internet customer at one time. Love the house, love the barn, love the space. This was originally on 30 acres until they sold some off to the Land Bank. I was surprised the Land Bank bought it since it already had a conservation restriction on it, so there was never going to be anything more built on it anyway.
I also think this was called 21R Crooked Lane, or something like that since the entrance was right next to the animal hospital which is numbered 21. This has been on the market quite a while, so maybe its time for someone to make a bid and see what happens. Even at its current price, I'm surprised its still available. There simply aren't many properties like this on Nantucket.
30 Orange St $18,975,000 Nantucket LINK 75078 The link ID should give you a clue as to how long this has been on the market (6 years and 5 days to be exact, starting at $25M on June 12, 2011). I cant imagine what the Maury People have spent in ad space over that time frame. While this is one of my all time favorite homes on Nantucket, it is no "Deal of the Isle" by any means. When I moved to the island in 1993 this was owned by a Texas man who owned the largest privately owned grocery chain in the US (it was started by his grandmother in the 20's with 25 cents, or something like that). He decided to sell, and as far as I remember started it at $4.5 or $5M. He couldnt find a buyer to save his life and eventually sold it for around $2.6M to a former CEO of a company we would all recognize in 1994. Now right at the time he bought it, he also sold the side yard (was a separate lot) for a little more than he officially paid to someone else with the stipulation they couldnt build on it for 5 year. 5 years came and went and then 32 Orange was built. While this lowered his cost of the house as you see it for sale today to just $1.6M (really cheap even for then) this always pissed me off a bit since it was breaking up a grand old property that gracefully topped the hill on Orange St (the house is named "Long Hill"). My thought was (as I was lugging a mail bag looking up at it) dude, if you cant afford the house without breaking it up, you arent worthy of it. So some 20 years later he's trying (and trying and trying) to get $19M out of it. While there are numerous examples of this kind of appreciation in the past 20 years, I'm afraid he's still $6-$9 Million over the mark here. Assessment is $13M, which is about where I would put the ask on this, looking for an offer in the $10-$11M range. I guess we will see...someday. Still, its one of my favorite homes on the island.
If you copy and paste into google "Nantucket LINK xxxxx" the listings should come up.
307 Polpis Rd Nantucket LINK 80890 I found this to be the best deal in land because of its price and large compound potential. This, along with the long listing time (2 years) make this ripe for an offer. (UPDATE under agreement 6/23/17)
62 Washington Ave, Madaket, $1.090,000. Nantucket LINK 83291 There arent too many old cottages left on Nantucket, and while I wouldnt call this an antique and probably wouldnt be classified as "Old Madaket" in its truest sense, its still kind of "oldish". Probably a bit of the value here is potential second floor water views, but I like the little ole cottage as it is. Yea its a little cottage and yea its $1M... yea its Nantucket. That said I think the price is OK and will probably sell quick for anywhere over $900K, with an upward bias because there is Jack Squat as far as properties around $1M. Judging by the asking price I would say they are hoping for $1.05M, would probably take $1.0M, with the question being would they take $950K? You dont know until you shove the offer in their face.
20 Miacomet Rd $2,300,000 Nantucket LINK 83332 I like the post and beam architecture (I almost built one on 2 Camelia and still may on the marsh front property I bought down here in SC), and I like the large 2 acre lot, which seems huge to me maybe because it is 16 times the size of the lot I sold! The price here looks good to me, its a lot of house and a lot of lot for the money.
4 Quidnet Rd $2,895,000 Nantucket LINK 82835 This is an old wireless internet customer of mine. I've always liked this house and how it is set way back from the road (the driveway is actually off of Polpis). The cottage in back with its separate entrance could be rented out and you would never see them, its like an entirely separate property. This has been for sale for a while and is about $1M off its original asking price. I'm surprised that its still available, especially at this price.
1 West Chester St EXT $8,750,000 Nantucket LINK 82652 This also was a wireless internet customer at one time. Love the house, love the barn, love the space. This was originally on 30 acres until they sold some off to the Land Bank. I was surprised the Land Bank bought it since it already had a conservation restriction on it, so there was never going to be anything more built on it anyway.
I also think this was called 21R Crooked Lane, or something like that since the entrance was right next to the animal hospital which is numbered 21. This has been on the market quite a while, so maybe its time for someone to make a bid and see what happens. Even at its current price, I'm surprised its still available. There simply aren't many properties like this on Nantucket.
30 Orange St $18,975,000 Nantucket LINK 75078 The link ID should give you a clue as to how long this has been on the market (6 years and 5 days to be exact, starting at $25M on June 12, 2011). I cant imagine what the Maury People have spent in ad space over that time frame. While this is one of my all time favorite homes on Nantucket, it is no "Deal of the Isle" by any means. When I moved to the island in 1993 this was owned by a Texas man who owned the largest privately owned grocery chain in the US (it was started by his grandmother in the 20's with 25 cents, or something like that). He decided to sell, and as far as I remember started it at $4.5 or $5M. He couldnt find a buyer to save his life and eventually sold it for around $2.6M to a former CEO of a company we would all recognize in 1994. Now right at the time he bought it, he also sold the side yard (was a separate lot) for a little more than he officially paid to someone else with the stipulation they couldnt build on it for 5 year. 5 years came and went and then 32 Orange was built. While this lowered his cost of the house as you see it for sale today to just $1.6M (really cheap even for then) this always pissed me off a bit since it was breaking up a grand old property that gracefully topped the hill on Orange St (the house is named "Long Hill"). My thought was (as I was lugging a mail bag looking up at it) dude, if you cant afford the house without breaking it up, you arent worthy of it. So some 20 years later he's trying (and trying and trying) to get $19M out of it. While there are numerous examples of this kind of appreciation in the past 20 years, I'm afraid he's still $6-$9 Million over the mark here. Assessment is $13M, which is about where I would put the ask on this, looking for an offer in the $10-$11M range. I guess we will see...someday. Still, its one of my favorite homes on the island.
Thursday, June 15, 2017
Nantucket Land for sale $1M-$2M 6/15/17
OK now for available land between $1M and $2M. At present there are 16 listings.
Among other posts I'm considering:
-1031 Exchanges
-Deal of the Isle - The property I think is the best deal on Nantucket.
-Demo Derby - A (probably only partial because it is so lengthy) list of the homes bought only for the land. In order to understand the land market on Nantucket, you also have to have a good view of whats going on in the demo market because its a significant and growing part of the land market.
OK, on to Land $1-$2M.
Takeaways:
-9 out of the 16 lots are located in Sconset, leaving only 7 lots $1M-$2M in other parts of the island, with one of them being kind of irrelevant (6 Cathcart portion).
-The lots just over $1M seem like they should be just under $1M
-The lots in the mid $1M rage seem like with a little downward tweak they would make much more sen$e
-The lots at the upper $1M end need a more significant price improvement before they make sense.
-The best deal in this range is 307 Polpis Rd at $1.7M (Under agreement 6/23/17)
5 Hawks Circle, Sconset $1,195,000 This street is next to all those Cannonbury lots that were for sale. When all those lots were listed for $1.55M each, this didnt look too bad in comparison. Now that Cannonbury might be sold, and a steady stream of spec homes forthcoming, it doesnt look as good! A 33% land to value ratio would mean a $3.6M property and I dont know if that is doable here. I would think $3M tops and more like $2.7M especially with the unknown near future on Cannonbury. 33% of $2.7M is $900K. 25% which spec builder like to see (which is becoming increasingly difficult and basically no longer exists) would be 675K, so in between those numbers, closer to the 900K side. Again I would want to know what is going on on Cannonbury first. If a developer gets all those lots on the cheap and is therefore able to sell the finished homes cheaper (especially the first few to get some cash flow going), you may be able to have the same home on Cannonbury for significantly less (~$500K?) than if you built that same house on this lot after paying even 900K for it, or even 800K for it.
139 Polpis Rd $1,199,000 This 1.22 acre lot evidently has a preservation restriction on the first 200 feet of it with a permitted building envelope at the back of the lot. I dont see a problem with this since thats where I would want to put the house anyway, back off the road. It has about a 2000 sq ft of permissible ground cover which translates into a 4000 sq ft 2 story house, so not too bad there. A 4 bedroom 4.5 bath 2646 sq ft house with pool on the lot next door is for sale for $2.095M which actually looks like a decent deal while causing this lot to look a bit expensive. The assessment on the house is $575K more than the asking price and the Town web site says it was built in 1920, so maybe condition of the house is the reason for the price. So in looking for a lot, you may find a decent deal on a house instead, funny how that works. Access is by a dirt drive on the side of the house that is for sale to the rear of the lot that also provides access to 135 Polpis (so there is an easement which is in the buildable envelope). There is a pond mostly on the property next door that might require a setback that could eat a little more of your buildable envelope, I would check before you make an offer. There is still room for a house, but there are some restrictions here. There are quite a few $2+M sales in this area but most are from 2014, which I would think is about 30% ago, so I would put the potential here at about $2.7-3M which puts this lot value around the 900K mark in my opinion, with 800K even better because of all the limiting restrictions.
17 Ellens Way $1,295,000 Most of the homes on this street are quite similar and have sold for between $2.685M (2015) and $3.0M (OCT 2016). Using a $3.0M completed value figure (#13 is for sale for $2.795M and #14 for $3.095M), this lot at $1.295 is a bit expensive at 43%. A better 30% figure would work out to a price of 900K for this lot. To figure what value for a property you would have to have in order for the land to be 30% of the final value just take the land price and divide by 0.3. If that number is too high for that neighborhood (not accounting for some big difference caused by a better view, etc), then the price is likely too high. $1.295M divided by 0.3 = $4,316,666 which is WAY to high for this neighborhood. Also there are 19 lots on this road and only 6 houses ( with 2 of them for sale), so there are 12 more lots besides this all owned by the developer, which means years of construction traffic left to go (maybe a decade at the rate they are going, this development is already 11 years old).
4 Windsor Rd, Sconset $1,300,000 (down from $1.495M) 1.26 Acres out in the Wilds of Sconset not far from the 1.5 Acre "Rear Plainfield" lot that sold in Dec 2016 for $1.5M. Other than the .25 acre difference, this lot is limited to 1 dwelling whereas Rear Plainfield was not. So I guess you can still have your house, pool and pool cabana, you just cant have a 2nd dwelling, or cottage. Is that worth a $200K discount from Rear Plainfield? I'd say yes. $1.1M or $1.2M would be a better fit though. The fact its been on the market for 734 days also says 1.1-$1.2M would be a better fit. Add 40K for a septic in this area.
10 Plainfield Rd, Sconset $1,395,000 1/2 acre lot with 2500 sq ft of available ground cover. Not far from the 4 Windsor lot above (about 1000 ft away). With 4 Windsor's 2.5 times the area and 2.74 times the amount of ground cover makes this lot look comparatively expensive. Add 40K for a septic in this area.
85 N Sankaty Rd and 85 S Sankaty Rd $1,340,000 and $1,400,000 respectively. These 2 lots are capable of a house, cottage, pool, etc. 85 S with its 1100 more sq ft of ground cover is certainly worth the $60,000 difference. The question is it worth $1.4M? Using our handy divide by 0.3 tool, that gives us a finished value of $4.666M which I think might be a tad high. I would peg the potential of these lots closer to $4M, so a $1.2M lot price. So the asking prices are not far off.
25A Clifton St, Sconset $1,400,000 This 1/2 acre lot is not far from the 4 Windsor Rd and Plainfield Rd lots and like the 10 Plainfield lot looks a little expensive. The potential here looks to be about $3.5M (the house for sale at 14 Clifton for $3.545M also supports this), so a 30% land cost would be $1.05M, which is very close to the $1.095M sale two lots down at 63 Burnell St (which is now 2 years old). I think that sale at 63 Burnell was a little ahead of its time, so I'm sticking to my $1.05M for this lot although it will probably sell for a little more ($1.2M is my official guess).
5 Black Fish Lane, Sconset $1,550,000 Sales on this street have recently been $3.2M to $4.25M. The sale at 20 Black Fish was an expansive 6200 sq ft home with pool, etc etc. Figuring every one of those 6200 sq ft at low $450 gives a building value of $2.79M. Subtracting that from the $4.25M gives a residual of $1.46M. If this was the land cost, it would leave zero profit at a land price of $1.46M. The $3.2M sale at #15 was 5423 sq ft. Figuring that at $450/sq ft would leave only $759K as residual. I'm finding it difficult to justify the $1.55M price here. 30% of a $4.25M sale would be $1.275M so thats about what I would put as the max price for this lot. $1.15-$1.2M is more like it.
21 Black Fish Lane, Sconset $1,995,000 While this might bring a little more than the 15 Black Fish above (100K or so) because it is at the end of the road, its the same deal as #15. This lot is basically the same as #20 that sold finished for a deal at $4.25M, just at the opposite side of the cul de sac, making this lot a very expensive 47% land cost.
49 Sankaty Rd, Sconset $1,600,000 This 0.4 acre lot can support 4000 sq ft of ground cover, so quite a bit! Not far from the 85 Sankaty lots above (which are about twice the size), this lot has about the same potential as those but is priced significantly higher. I could see a little higher than the #85 lots as it is closer to Sconset Village, but the 30% rule brings the value to $5.333M which I think would be difficult here. This has been on the market 647 days, pushing two years, so I guess I'm not off base. I'm thinking about $1.2M here.
6 Cathcart Rd (portion) $1,650,000 This seller apparently has an oversized lot and is trying to sell off a piece of it to lower his $5M purchase cost. The problem is this piece is not big enough to be a standalone lot, so the only two people on planet Earth that it makes sense to buy this are the two neighbors on either side. What confuses me is why is this listed with a broker? Since your market is TWO, go to each next door neighbor and knock on the door. "Hey, like, you wanna buy this piece of land and make your yard bigger?" You have now completed your marketing campaign. Why pay a broker $82,500? Nothing in this listing makes sense, including the price.
307 Polpis Rd $1,700,000 3 Acres in Polpis! 3900 sq ft of ground cover! This looks to have a small house built in 1955 that they are apparently assigning no value to since they dont even mention it in the listing. Nice sized lot with views across the cranberry bogs to the rear. There are some wetlands at the back of the lot so you will have a setback from that, but no big deal because of the size of the lot. This was listed at $2.1M in July of 2015, nearly 2 years ago and periodically reduced to its present $1.7M (with 2 $100K reductions in the past 4 months alone, a sign they are ready to sell!) Honestly I dont have a problem with this price since it could support a $6-$7M compound, meaning a $1.8M to $2.1M land value at 30%. A really good 25% land cost would yield a price of $1.5M to $1.75M. This is a very fairly priced lot, especially if you can get it a little cheaper since its been on the market so long. So far this is the best deal in Land as far as I'm concerned. Oh, add $40K for septic and well (more if you are building a big compound). ***Under agreement 6/23/17 after 697 days on the market***
20 Pippens Way $1,899,000 This 1.12 acre lot is priced significantly above what other lots in this development have sold for. It may have some 2nd floor distant harbor views, but it doesnt say so in the listing. This has LINK #79545 attached to it which means its been on the market a LONG time (they are in the 83300's now, think about how long it takes to go through 4000 listings on Nantucket). A better comparative deal would be the nearby lot at 57 Shawkinno Rd, 2.76 acres, distant harbor views, $1.95M, although at 246 days on the market this looks like it needs a price reduction as well. Figure ~40K for septic on either lot, although they have been expanding sewer in this area in recent years, so check with the DPW. It would suck to have to connect to the sewer 15 minutes after you spent 40 grand on a septic (although 2 or 3 weeks of summer rentals would pay for it).
65 Westchester St $1,998,000 Honey lets buy it, its less than $2M! Its a much better deal than if it were $2M! Well its not a good deal. There have been several $5M+ spec sales nearby and this might support something like that, but the numbers have to make sense. At 30% land cost would be $1.575M on a $5.25M sale. In order for the $1.998 asking price to equal 30% of your project, it needs to have a final value of $6.66M, which is about $1.4M higher than recent nearby sales. There is a $5M+ spec house on Madaket Rd that has a $980K land cost (so like 20% land cost!). If they are making ~$1M on that, it simply doesnt make sense to pay $1M more for the next lot (although they will be forced to pay more than that $980K, that doesnt exist anymore). At that point they might as well go blue fishing off the beach until things make sen$e again. At an attractive and just about impossible to find anymore 25%, this lot becomes $1.312M. I dont think it will ever get that low, but I do think this needs to come down $300-$400K in order to move. I think the recent $1.44M sale of a smaller lot at #59 was someone paying a bit too much, and that $1,.6M sale at Pilgrim Rd (2 sales in 2 weeks!) was someone paying way too much. Dont get me wrong, if the owners of this lot can get someone to pay too much, hats off to them. But so far after 412 days on the market no such luck. It should also be pointed out the listing broker has a lot of development experience on the island so if it were such a good deal why isnt he buying it? Even more overpriced is the nearby 5 Pilgrim Rd lot at $2.495M. You just arent going to have a $8.3M (30% land cost) property there. Same goes for the lot (or lots) at 9 Pilgrim Rd.
Among other posts I'm considering:
-1031 Exchanges
-Deal of the Isle - The property I think is the best deal on Nantucket.
-Demo Derby - A (probably only partial because it is so lengthy) list of the homes bought only for the land. In order to understand the land market on Nantucket, you also have to have a good view of whats going on in the demo market because its a significant and growing part of the land market.
OK, on to Land $1-$2M.
Takeaways:
-9 out of the 16 lots are located in Sconset, leaving only 7 lots $1M-$2M in other parts of the island, with one of them being kind of irrelevant (6 Cathcart portion).
-The lots just over $1M seem like they should be just under $1M
-The lots in the mid $1M rage seem like with a little downward tweak they would make much more sen$e
-The lots at the upper $1M end need a more significant price improvement before they make sense.
-The best deal in this range is 307 Polpis Rd at $1.7M (Under agreement 6/23/17)
5 Hawks Circle, Sconset $1,195,000 This street is next to all those Cannonbury lots that were for sale. When all those lots were listed for $1.55M each, this didnt look too bad in comparison. Now that Cannonbury might be sold, and a steady stream of spec homes forthcoming, it doesnt look as good! A 33% land to value ratio would mean a $3.6M property and I dont know if that is doable here. I would think $3M tops and more like $2.7M especially with the unknown near future on Cannonbury. 33% of $2.7M is $900K. 25% which spec builder like to see (which is becoming increasingly difficult and basically no longer exists) would be 675K, so in between those numbers, closer to the 900K side. Again I would want to know what is going on on Cannonbury first. If a developer gets all those lots on the cheap and is therefore able to sell the finished homes cheaper (especially the first few to get some cash flow going), you may be able to have the same home on Cannonbury for significantly less (~$500K?) than if you built that same house on this lot after paying even 900K for it, or even 800K for it.
139 Polpis Rd $1,199,000 This 1.22 acre lot evidently has a preservation restriction on the first 200 feet of it with a permitted building envelope at the back of the lot. I dont see a problem with this since thats where I would want to put the house anyway, back off the road. It has about a 2000 sq ft of permissible ground cover which translates into a 4000 sq ft 2 story house, so not too bad there. A 4 bedroom 4.5 bath 2646 sq ft house with pool on the lot next door is for sale for $2.095M which actually looks like a decent deal while causing this lot to look a bit expensive. The assessment on the house is $575K more than the asking price and the Town web site says it was built in 1920, so maybe condition of the house is the reason for the price. So in looking for a lot, you may find a decent deal on a house instead, funny how that works. Access is by a dirt drive on the side of the house that is for sale to the rear of the lot that also provides access to 135 Polpis (so there is an easement which is in the buildable envelope). There is a pond mostly on the property next door that might require a setback that could eat a little more of your buildable envelope, I would check before you make an offer. There is still room for a house, but there are some restrictions here. There are quite a few $2+M sales in this area but most are from 2014, which I would think is about 30% ago, so I would put the potential here at about $2.7-3M which puts this lot value around the 900K mark in my opinion, with 800K even better because of all the limiting restrictions.
17 Ellens Way $1,295,000 Most of the homes on this street are quite similar and have sold for between $2.685M (2015) and $3.0M (OCT 2016). Using a $3.0M completed value figure (#13 is for sale for $2.795M and #14 for $3.095M), this lot at $1.295 is a bit expensive at 43%. A better 30% figure would work out to a price of 900K for this lot. To figure what value for a property you would have to have in order for the land to be 30% of the final value just take the land price and divide by 0.3. If that number is too high for that neighborhood (not accounting for some big difference caused by a better view, etc), then the price is likely too high. $1.295M divided by 0.3 = $4,316,666 which is WAY to high for this neighborhood. Also there are 19 lots on this road and only 6 houses ( with 2 of them for sale), so there are 12 more lots besides this all owned by the developer, which means years of construction traffic left to go (maybe a decade at the rate they are going, this development is already 11 years old).
4 Windsor Rd, Sconset $1,300,000 (down from $1.495M) 1.26 Acres out in the Wilds of Sconset not far from the 1.5 Acre "Rear Plainfield" lot that sold in Dec 2016 for $1.5M. Other than the .25 acre difference, this lot is limited to 1 dwelling whereas Rear Plainfield was not. So I guess you can still have your house, pool and pool cabana, you just cant have a 2nd dwelling, or cottage. Is that worth a $200K discount from Rear Plainfield? I'd say yes. $1.1M or $1.2M would be a better fit though. The fact its been on the market for 734 days also says 1.1-$1.2M would be a better fit. Add 40K for a septic in this area.
10 Plainfield Rd, Sconset $1,395,000 1/2 acre lot with 2500 sq ft of available ground cover. Not far from the 4 Windsor lot above (about 1000 ft away). With 4 Windsor's 2.5 times the area and 2.74 times the amount of ground cover makes this lot look comparatively expensive. Add 40K for a septic in this area.
85 N Sankaty Rd and 85 S Sankaty Rd $1,340,000 and $1,400,000 respectively. These 2 lots are capable of a house, cottage, pool, etc. 85 S with its 1100 more sq ft of ground cover is certainly worth the $60,000 difference. The question is it worth $1.4M? Using our handy divide by 0.3 tool, that gives us a finished value of $4.666M which I think might be a tad high. I would peg the potential of these lots closer to $4M, so a $1.2M lot price. So the asking prices are not far off.
25A Clifton St, Sconset $1,400,000 This 1/2 acre lot is not far from the 4 Windsor Rd and Plainfield Rd lots and like the 10 Plainfield lot looks a little expensive. The potential here looks to be about $3.5M (the house for sale at 14 Clifton for $3.545M also supports this), so a 30% land cost would be $1.05M, which is very close to the $1.095M sale two lots down at 63 Burnell St (which is now 2 years old). I think that sale at 63 Burnell was a little ahead of its time, so I'm sticking to my $1.05M for this lot although it will probably sell for a little more ($1.2M is my official guess).
5 Black Fish Lane, Sconset $1,550,000 Sales on this street have recently been $3.2M to $4.25M. The sale at 20 Black Fish was an expansive 6200 sq ft home with pool, etc etc. Figuring every one of those 6200 sq ft at low $450 gives a building value of $2.79M. Subtracting that from the $4.25M gives a residual of $1.46M. If this was the land cost, it would leave zero profit at a land price of $1.46M. The $3.2M sale at #15 was 5423 sq ft. Figuring that at $450/sq ft would leave only $759K as residual. I'm finding it difficult to justify the $1.55M price here. 30% of a $4.25M sale would be $1.275M so thats about what I would put as the max price for this lot. $1.15-$1.2M is more like it.
21 Black Fish Lane, Sconset $1,995,000 While this might bring a little more than the 15 Black Fish above (100K or so) because it is at the end of the road, its the same deal as #15. This lot is basically the same as #20 that sold finished for a deal at $4.25M, just at the opposite side of the cul de sac, making this lot a very expensive 47% land cost.
49 Sankaty Rd, Sconset $1,600,000 This 0.4 acre lot can support 4000 sq ft of ground cover, so quite a bit! Not far from the 85 Sankaty lots above (which are about twice the size), this lot has about the same potential as those but is priced significantly higher. I could see a little higher than the #85 lots as it is closer to Sconset Village, but the 30% rule brings the value to $5.333M which I think would be difficult here. This has been on the market 647 days, pushing two years, so I guess I'm not off base. I'm thinking about $1.2M here.
6 Cathcart Rd (portion) $1,650,000 This seller apparently has an oversized lot and is trying to sell off a piece of it to lower his $5M purchase cost. The problem is this piece is not big enough to be a standalone lot, so the only two people on planet Earth that it makes sense to buy this are the two neighbors on either side. What confuses me is why is this listed with a broker? Since your market is TWO, go to each next door neighbor and knock on the door. "Hey, like, you wanna buy this piece of land and make your yard bigger?" You have now completed your marketing campaign. Why pay a broker $82,500? Nothing in this listing makes sense, including the price.
307 Polpis Rd $1,700,000 3 Acres in Polpis! 3900 sq ft of ground cover! This looks to have a small house built in 1955 that they are apparently assigning no value to since they dont even mention it in the listing. Nice sized lot with views across the cranberry bogs to the rear. There are some wetlands at the back of the lot so you will have a setback from that, but no big deal because of the size of the lot. This was listed at $2.1M in July of 2015, nearly 2 years ago and periodically reduced to its present $1.7M (with 2 $100K reductions in the past 4 months alone, a sign they are ready to sell!) Honestly I dont have a problem with this price since it could support a $6-$7M compound, meaning a $1.8M to $2.1M land value at 30%. A really good 25% land cost would yield a price of $1.5M to $1.75M. This is a very fairly priced lot, especially if you can get it a little cheaper since its been on the market so long. So far this is the best deal in Land as far as I'm concerned. Oh, add $40K for septic and well (more if you are building a big compound). ***Under agreement 6/23/17 after 697 days on the market***
20 Pippens Way $1,899,000 This 1.12 acre lot is priced significantly above what other lots in this development have sold for. It may have some 2nd floor distant harbor views, but it doesnt say so in the listing. This has LINK #79545 attached to it which means its been on the market a LONG time (they are in the 83300's now, think about how long it takes to go through 4000 listings on Nantucket). A better comparative deal would be the nearby lot at 57 Shawkinno Rd, 2.76 acres, distant harbor views, $1.95M, although at 246 days on the market this looks like it needs a price reduction as well. Figure ~40K for septic on either lot, although they have been expanding sewer in this area in recent years, so check with the DPW. It would suck to have to connect to the sewer 15 minutes after you spent 40 grand on a septic (although 2 or 3 weeks of summer rentals would pay for it).
65 Westchester St $1,998,000 Honey lets buy it, its less than $2M! Its a much better deal than if it were $2M! Well its not a good deal. There have been several $5M+ spec sales nearby and this might support something like that, but the numbers have to make sense. At 30% land cost would be $1.575M on a $5.25M sale. In order for the $1.998 asking price to equal 30% of your project, it needs to have a final value of $6.66M, which is about $1.4M higher than recent nearby sales. There is a $5M+ spec house on Madaket Rd that has a $980K land cost (so like 20% land cost!). If they are making ~$1M on that, it simply doesnt make sense to pay $1M more for the next lot (although they will be forced to pay more than that $980K, that doesnt exist anymore). At that point they might as well go blue fishing off the beach until things make sen$e again. At an attractive and just about impossible to find anymore 25%, this lot becomes $1.312M. I dont think it will ever get that low, but I do think this needs to come down $300-$400K in order to move. I think the recent $1.44M sale of a smaller lot at #59 was someone paying a bit too much, and that $1,.6M sale at Pilgrim Rd (2 sales in 2 weeks!) was someone paying way too much. Dont get me wrong, if the owners of this lot can get someone to pay too much, hats off to them. But so far after 412 days on the market no such luck. It should also be pointed out the listing broker has a lot of development experience on the island so if it were such a good deal why isnt he buying it? Even more overpriced is the nearby 5 Pilgrim Rd lot at $2.495M. You just arent going to have a $8.3M (30% land cost) property there. Same goes for the lot (or lots) at 9 Pilgrim Rd.
Nantucket Land for sale <$1M 6/15/17
After some catching up, we have made it to present day (6/15/17)! Here I'll comment on some pieces of land presently for sale on the island. First of all, there ain't much of it. So if you're trying to find land in the $700-$800K range with a total investment of $1.5 to say $1.8M hoping to end up with a property in the $2-$2.5M range, the pickins are extremely slim. I'll first comment on land under $1M which is 14 of the 43 parcels presently on the market.
Takeaways:
-4 Seven Mile Lane seems to be the best deal here, especially if you can get it a little lower, although 24 Field Ave can be a contender if it passes the smell test. (Under agreement 6/26/17)
-I have a very detached analytical approach, so things sometimes sell for more that I think they will. Its what typically happens when there is something in high demand with virtually no supply.
- Its 6/26 (11 days after the original post) and 3 of these are already under agreement.
2 and 4 Seven Mile Lane. $995,000 and $925,000 respectively. These are located off Milestone Rd on the right (almost across Milestone from the troubled Hydrangea Ln). These border conservation land to the rear which is nice. I would definitely lean toward #4 because it is set further back off Milestone and is $70,000 cheaper than #2 (which comes with plans but they are probably not worth $70,000 and may not be what you want anyway!). Since these have been on and off the market for a couple of years, I would think an offer of $850K for #4 should get some movement, 875K would be ok for this. This is certainly $2M+ territory and quite likely getting toward $3M, so these prices arent terrible at all, just maybe a little downward tweak is all they need.
18 Mount Vernon St $980,000 This has been on the market since Sept 2016 and as I've commented before, I feel it is overpriced by about $200,000 or more. At $800K it would be 33% of a probable $2.4M final value, at $750K ($230,000 less than present ask) it would be 31%. Keep in mind 2 Camelia, which is similar in size and the same zoning, and which will produce a similarly valued property, sold for $695,000 in Jan 2017. Dont be fooled by the recent nearby $3.8M sale at 5 Joy St, that is a much bigger lot in different zoning that allows for a pool (this was heated salt water with pool cabana, etc), whereas OHD (Old Historic District) zoning does not (you can have a "Spa" though, which can be up to 1000 gallons). OHD zoning does provide for 50% ground cover while the R1 zoning at 5 Joy is only 30%, but since its a much bigger lot (roughly twice the size), you can do more with 5 Joy than you can with 18 Mount Vernon. They are really different animals.
10 York St $950,000 This is the crazy listing I talked about that is worth about $450K. The listing at 20A York St (see below) is a better deal (and much better set back spot) by $200,000 but it too is over priced for the neighborhood.
115 Surfside Rd $925,000 (SOLD 6/7/17 $900,000, looks like the market caught up with this!) Listed nearly 2 years ago, 8/5/15, this just short of an acre this lot is about a 5 minute bike ride to Surfside Beach. I'd put this in the "maybe up to $2M" finished range which makes the lot expensive. I would think a price closer to what 2 Camelia Ln sold for, around $700,000 might cause this to move, with $600-650K more like it. The market has been slowly catching up to these longer listings but so far not this one, I think because this one still has a ways to go (see the recent 8 Nonantum sale at $830K (and previous $675K sale the same month this was initially listed), which although much smaller, is just steps from Surfside Beach).
33 Okorwaw $865,000 (reduced from $950K) .92 acre lot in Surfside over toward the airport. While not right along the airport fence like 1 Monohansett, its only about 800ft from the Monohansett lot, and only 1500 ft from the run-up area (where they warm up their engines) of Runway 6. There does seem to be about a $2M potential in the neighborhood, so a $700-$750K price is not out of the question, making the $865K asking price a little high but not crazy. I think taking the $65K off would help bring an offer (that they should probably take).
134B Main St $849,000 This is an interesting spot on Main St. There are 2 other structures in the back that it looked were "condoed" at one time. I dont know if it is because this has an old garage on it brings it into the 81L category (looks that way), but regardless, its a 4296 sq ft lot right off Main St. Its a little strangely shaped and has a parking easement for the front house, so it is a bit limited (and tight!) in there. OHD zoning gives you 2148 sq ft of ground cover but because of the parking easement and the odd shape, you might have trouble using it all. Still you can put a decent sized house here, its just really crowded in there! Its right at 1/2 mile walk to the Hub on Main St. Although they are trying to get $3.695M for the front house (3866 sq ft), I think you will be limited to about $2M potential here because its so crowded, so I put the value similar (or a bit lower) to 2 Camelia's, at $650-700K.
20A York St $750,000 As discussed above and elsewhere, my feeling is for a 500-550K value here. The original house is under agreement as of 6/16/17 so it will be interesting to see what it goes for, if it can break the concrete-like $1.3M barrier of this street. This is an extremely busy cut through one way street which forces you into "5 corners" every time you leave the driveway, which I'm sure is the driving factor limiting this to a $1.3M street. UPDATE: 6/23/17 this lot is Under Agreement. Seeing this along with HDC action for demo of the garage along with the original house going under agreement in recent days makes me wonder if the 2 buyers are the same. Either way it looks like the owners made a good profit here because of that old garage! We'll see soon enough!
4 Hydrangea Lane $725,000 As discussed at length, this neighborhood seems to be having problems bringing $2M for a finished house. If it cant do that, then 700K becomes a problem for the lots. Also there are multiple lots for sale (#9 at $719K and $1.269M for both 6 and 9, or $634,500 each). I'm not sure what the answer here is but it seems it will contain the word "cheaper", or "price improvement".
24 Field Ave $695,000 (apparently raised from $675K although Zillow still says $675K) This was under agreement and was going through HDC and I figured it had been sold but apparently it fell through and is back on the market. Field Ave is off of South Shore Rd which is affectionately called "Sewer Bed Rd" since the wastewater treatment plant is at the end. Since this lot is down the end of Field Ave, it is about 1700 feet to the east of the sewer beds. I have no experience in this area, but I would want to spend some time sniffing around on the lot during a westerly breeze before I made an offer. Otherwise it is about a 2000' walk down a dirt road and path to the beach, which lands you just west of Surfside Beach (nice!). There is a recent (Oct 2016) $1.57M sale across the street with a smaller house, so it seems there could be higher potential here, just bring your nose first. This is a nice lot if it passes the smell test. UPDATE: Under agreement 6/26/17 and "pending Sale" on Zillow.
4 Perry Lane $650,000 This is off Bartlett Rd and is geared more toward a residential/commercial type use which puts the price rather high in my opinion. The assessment is only $264,700, and was sold on 5/13/14 along with 6 Perry Ln for $750K (which I thought was awful high at the time). That would leave him with the lot at #6 for only $100K, not bad if he can get it. I dont think he's going to get it. I would put the value at about what he paid for it, about 1/2 the $750K, or about $375K.
55 Goldfinch Dr $599,000 Lot with plans (Huntington modular). As discussed elsewhere, this appears to be someone who was going to build a spec house but has decided instead to sell the lot with HDC approved plans. Unfortunately due to the price they paid for the lot, they will be lucky to break even. Even is still better than losing though! Although this neighborhood will likely appreciate over time, it is a very well defined and enclosed development of 190 homes. It is very difficult to do "something more" (like a bigger than average house) in a place like this and do well. I think thats where the mistake here was. Its also more difficult to do cheaper spec homes because there isnt much margin for error. The market can correct $500K (or even $1M) on a $5M spec home and you're still not going bankrupt. You're not going to be happy, but when you think of what else will be happening in the markets to cause that correction on Nantucket, breaking even will be a lot better than if you had that money in the markets. With a lower end spec you dont have that kind of safety net.
3 Mary Anne Dr $475,000 5000 sq ft lot in year round res/comm area near the Airport. Most of the sales in this area have been in the $500-700K range....with buildings. So $475K for the land seems a bit high. It is owned by a broker who wants to do a 1031 exchange. I did a 1031 with 2 Camelia and for the buyer this means virtually nothing other than signing something that says you understand it is a 1031 exchange. It doesnt require any expense on part of the buyer and doesnt mean the seller has to buy any property from the buyer. I'll write up a 1031 info post at some point since nearly all the info I got from real estate agents and even lawyers was wrong.
10 Alexandia Dr $399,000 This lot is located in a predominantly year round area and has quite a bit of development potential for rental units or employee housing. I'd like to see the price closer to 300-350K though. UPDATE: Under Agreement 6/20/17
Thats it! All the land under a Million! Didnt see anything you liked? You're not alone! I guess its over a million we go...
Takeaways:
-4 Seven Mile Lane seems to be the best deal here, especially if you can get it a little lower, although 24 Field Ave can be a contender if it passes the smell test. (Under agreement 6/26/17)
-I have a very detached analytical approach, so things sometimes sell for more that I think they will. Its what typically happens when there is something in high demand with virtually no supply.
- Its 6/26 (11 days after the original post) and 3 of these are already under agreement.
2 and 4 Seven Mile Lane. $995,000 and $925,000 respectively. These are located off Milestone Rd on the right (almost across Milestone from the troubled Hydrangea Ln). These border conservation land to the rear which is nice. I would definitely lean toward #4 because it is set further back off Milestone and is $70,000 cheaper than #2 (which comes with plans but they are probably not worth $70,000 and may not be what you want anyway!). Since these have been on and off the market for a couple of years, I would think an offer of $850K for #4 should get some movement, 875K would be ok for this. This is certainly $2M+ territory and quite likely getting toward $3M, so these prices arent terrible at all, just maybe a little downward tweak is all they need.
18 Mount Vernon St $980,000 This has been on the market since Sept 2016 and as I've commented before, I feel it is overpriced by about $200,000 or more. At $800K it would be 33% of a probable $2.4M final value, at $750K ($230,000 less than present ask) it would be 31%. Keep in mind 2 Camelia, which is similar in size and the same zoning, and which will produce a similarly valued property, sold for $695,000 in Jan 2017. Dont be fooled by the recent nearby $3.8M sale at 5 Joy St, that is a much bigger lot in different zoning that allows for a pool (this was heated salt water with pool cabana, etc), whereas OHD (Old Historic District) zoning does not (you can have a "Spa" though, which can be up to 1000 gallons). OHD zoning does provide for 50% ground cover while the R1 zoning at 5 Joy is only 30%, but since its a much bigger lot (roughly twice the size), you can do more with 5 Joy than you can with 18 Mount Vernon. They are really different animals.
10 York St $950,000 This is the crazy listing I talked about that is worth about $450K. The listing at 20A York St (see below) is a better deal (and much better set back spot) by $200,000 but it too is over priced for the neighborhood.
115 Surfside Rd $925,000 (SOLD 6/7/17 $900,000, looks like the market caught up with this!) Listed nearly 2 years ago, 8/5/15, this just short of an acre this lot is about a 5 minute bike ride to Surfside Beach. I'd put this in the "maybe up to $2M" finished range which makes the lot expensive. I would think a price closer to what 2 Camelia Ln sold for, around $700,000 might cause this to move, with $600-650K more like it. The market has been slowly catching up to these longer listings but so far not this one, I think because this one still has a ways to go (see the recent 8 Nonantum sale at $830K (and previous $675K sale the same month this was initially listed), which although much smaller, is just steps from Surfside Beach).
33 Okorwaw $865,000 (reduced from $950K) .92 acre lot in Surfside over toward the airport. While not right along the airport fence like 1 Monohansett, its only about 800ft from the Monohansett lot, and only 1500 ft from the run-up area (where they warm up their engines) of Runway 6. There does seem to be about a $2M potential in the neighborhood, so a $700-$750K price is not out of the question, making the $865K asking price a little high but not crazy. I think taking the $65K off would help bring an offer (that they should probably take).
134B Main St $849,000 This is an interesting spot on Main St. There are 2 other structures in the back that it looked were "condoed" at one time. I dont know if it is because this has an old garage on it brings it into the 81L category (looks that way), but regardless, its a 4296 sq ft lot right off Main St. Its a little strangely shaped and has a parking easement for the front house, so it is a bit limited (and tight!) in there. OHD zoning gives you 2148 sq ft of ground cover but because of the parking easement and the odd shape, you might have trouble using it all. Still you can put a decent sized house here, its just really crowded in there! Its right at 1/2 mile walk to the Hub on Main St. Although they are trying to get $3.695M for the front house (3866 sq ft), I think you will be limited to about $2M potential here because its so crowded, so I put the value similar (or a bit lower) to 2 Camelia's, at $650-700K.
20A York St $750,000 As discussed above and elsewhere, my feeling is for a 500-550K value here. The original house is under agreement as of 6/16/17 so it will be interesting to see what it goes for, if it can break the concrete-like $1.3M barrier of this street. This is an extremely busy cut through one way street which forces you into "5 corners" every time you leave the driveway, which I'm sure is the driving factor limiting this to a $1.3M street. UPDATE: 6/23/17 this lot is Under Agreement. Seeing this along with HDC action for demo of the garage along with the original house going under agreement in recent days makes me wonder if the 2 buyers are the same. Either way it looks like the owners made a good profit here because of that old garage! We'll see soon enough!
4 Hydrangea Lane $725,000 As discussed at length, this neighborhood seems to be having problems bringing $2M for a finished house. If it cant do that, then 700K becomes a problem for the lots. Also there are multiple lots for sale (#9 at $719K and $1.269M for both 6 and 9, or $634,500 each). I'm not sure what the answer here is but it seems it will contain the word "cheaper", or "price improvement".
24 Field Ave $695,000 (apparently raised from $675K although Zillow still says $675K) This was under agreement and was going through HDC and I figured it had been sold but apparently it fell through and is back on the market. Field Ave is off of South Shore Rd which is affectionately called "Sewer Bed Rd" since the wastewater treatment plant is at the end. Since this lot is down the end of Field Ave, it is about 1700 feet to the east of the sewer beds. I have no experience in this area, but I would want to spend some time sniffing around on the lot during a westerly breeze before I made an offer. Otherwise it is about a 2000' walk down a dirt road and path to the beach, which lands you just west of Surfside Beach (nice!). There is a recent (Oct 2016) $1.57M sale across the street with a smaller house, so it seems there could be higher potential here, just bring your nose first. This is a nice lot if it passes the smell test. UPDATE: Under agreement 6/26/17 and "pending Sale" on Zillow.
4 Perry Lane $650,000 This is off Bartlett Rd and is geared more toward a residential/commercial type use which puts the price rather high in my opinion. The assessment is only $264,700, and was sold on 5/13/14 along with 6 Perry Ln for $750K (which I thought was awful high at the time). That would leave him with the lot at #6 for only $100K, not bad if he can get it. I dont think he's going to get it. I would put the value at about what he paid for it, about 1/2 the $750K, or about $375K.
55 Goldfinch Dr $599,000 Lot with plans (Huntington modular). As discussed elsewhere, this appears to be someone who was going to build a spec house but has decided instead to sell the lot with HDC approved plans. Unfortunately due to the price they paid for the lot, they will be lucky to break even. Even is still better than losing though! Although this neighborhood will likely appreciate over time, it is a very well defined and enclosed development of 190 homes. It is very difficult to do "something more" (like a bigger than average house) in a place like this and do well. I think thats where the mistake here was. Its also more difficult to do cheaper spec homes because there isnt much margin for error. The market can correct $500K (or even $1M) on a $5M spec home and you're still not going bankrupt. You're not going to be happy, but when you think of what else will be happening in the markets to cause that correction on Nantucket, breaking even will be a lot better than if you had that money in the markets. With a lower end spec you dont have that kind of safety net.
3 Mary Anne Dr $475,000 5000 sq ft lot in year round res/comm area near the Airport. Most of the sales in this area have been in the $500-700K range....with buildings. So $475K for the land seems a bit high. It is owned by a broker who wants to do a 1031 exchange. I did a 1031 with 2 Camelia and for the buyer this means virtually nothing other than signing something that says you understand it is a 1031 exchange. It doesnt require any expense on part of the buyer and doesnt mean the seller has to buy any property from the buyer. I'll write up a 1031 info post at some point since nearly all the info I got from real estate agents and even lawyers was wrong.
10 Alexandia Dr $399,000 This lot is located in a predominantly year round area and has quite a bit of development potential for rental units or employee housing. I'd like to see the price closer to 300-350K though. UPDATE: Under Agreement 6/20/17
Thats it! All the land under a Million! Didnt see anything you liked? You're not alone! I guess its over a million we go...
Present Land Pipeline 6/15/17
As far as land goes, the present pipeline (those either with an accepted offer or under Purchase and Sale) are as follows:
Cannonbury lots (38 of them at $1.55M Each). Accepted Offer 5/14/17. I went into these extensively on the Old Site. It was all on one listing, which is now off market. I dont know if that means there is an accepted offer for all of them or just one. I think I figured I wouldnt pay over $500K each in a buy-it-all deal (which is still a sizable $14 Million initial investment). They were grossly overpriced at $1.55M. I think the greatest enemy of the buyer will be himself. Thats a lot of inventory for one specific out of the way area. I hope he's young! Like I said, $500K Ea for the lot of them thar lots. I guess we'll soon see whats going on here.
17 Berkeley St in Tom Nevers $539,000 This lot was on the market for quite a while (608 days) and is currently under P&S (since 3/27/17!) This is in a $1.2M or so neighborhood making it about 45% of a likely completed value, kinda high. I think that combined with the spec builders concentrating on higher ($5M+) places left this to the end user 2nd homeowner market. 2 Camelia suffered from this as well to a certain extent but there are a few builders out there doing $2M+ spec homes but their job is becoming harder by the day due to the complete lack of land in a price range that would support a spec house in the $2M-$2.5M area. At one point this was the next available lot down the price ladder from 2 Camelia, with nothing between $539K and $749K.
1 Monohansett $995,000 under contract after 253 DOM. This is a big lot (2.3 acres) but it borders the airport (as in one of your lot lines is the Airport fence). In the aerial picture they used for the listing, you can see the end of runway 6. Nantucket Airport is the 2nd busiest airport in New England in July and August. There are a few days it does more flights than Logan, making it the busiest in New England. You can build a nice spread here but it goes without saying you will have to be tolerant of jet noise, as well as fumes on occasion. If you are looking for peace and quiet, this is NOT the place unless you are only going to be there on foggy days. Aside from this, lots in this area are usually larger and have been selling for $900,000 ish. This has also been under contract for a while (since 3/22/17) which may mean they are seeing if they can get their plans approved before nailing down the purchase. These "long in the tooth" contracts seem to be more prone to kick back since they usually have more conditions put on them, so we will see. Anyway, $1M (to start, they havent built anything yet!) to be on the Airport Fence is pretty amazing to me.
31 Youngs Way $695,000 Offer To Purchase after 68 Days on the market. This is in the area of Bayberry Lane (whose lots are typically 4 times the size of this) but on a residential/commercial street, thus the RC zoning (50% ground cover so you can put a lot of stuff here!). Other recent sales of these lots have been in the $450K range. This lot being at the end of the road (alongside Ticcoma Way) would make it a little more valuable, but not this much. Regardless, it has an accepted offer and we will soon see what someone was willing to pay.
18 Bishops Rise $1,275,000 Under Contract (otherwise known as P&S or Purchase and Sale) Nearly 2 Acres. In the Dionis area, some of these lots are on a hill and have views to the north over Nantucket Sound. #14 is on the market (built in 1994, renovated (and I mean RENOVATED!) in 2015) for $3.995M with a cottage and pool, etc. Nearby 28 Swift Rock Rd sold for $4.1M in Nov 2016 but is subdividable into 2 lots. Another interesting nearby sale is 54 Eel Point Rd, sold 11/20/15 for $3.5M, a lowball offer from a $4.995M ask (which started way back in 2011 at $5.95M!). It was also subdividable and the extra lot is now for sale for $2.75M which I doubt they will get but it would make the remaining house really cheap at only $750K for a ~$2.5M house! Most other sales have been in the $2.4-2.7M range. In the end I'd like to see this lot at 18 a little cheaper, closer to $1M, but we will see what it goes for. (Update 6/28/17 SOLD $1,200,000 or about 40% of a $3M project.)
Cannonbury lots (38 of them at $1.55M Each). Accepted Offer 5/14/17. I went into these extensively on the Old Site. It was all on one listing, which is now off market. I dont know if that means there is an accepted offer for all of them or just one. I think I figured I wouldnt pay over $500K each in a buy-it-all deal (which is still a sizable $14 Million initial investment). They were grossly overpriced at $1.55M. I think the greatest enemy of the buyer will be himself. Thats a lot of inventory for one specific out of the way area. I hope he's young! Like I said, $500K Ea for the lot of them thar lots. I guess we'll soon see whats going on here.
17 Berkeley St in Tom Nevers $539,000 This lot was on the market for quite a while (608 days) and is currently under P&S (since 3/27/17!) This is in a $1.2M or so neighborhood making it about 45% of a likely completed value, kinda high. I think that combined with the spec builders concentrating on higher ($5M+) places left this to the end user 2nd homeowner market. 2 Camelia suffered from this as well to a certain extent but there are a few builders out there doing $2M+ spec homes but their job is becoming harder by the day due to the complete lack of land in a price range that would support a spec house in the $2M-$2.5M area. At one point this was the next available lot down the price ladder from 2 Camelia, with nothing between $539K and $749K.
1 Monohansett $995,000 under contract after 253 DOM. This is a big lot (2.3 acres) but it borders the airport (as in one of your lot lines is the Airport fence). In the aerial picture they used for the listing, you can see the end of runway 6. Nantucket Airport is the 2nd busiest airport in New England in July and August. There are a few days it does more flights than Logan, making it the busiest in New England. You can build a nice spread here but it goes without saying you will have to be tolerant of jet noise, as well as fumes on occasion. If you are looking for peace and quiet, this is NOT the place unless you are only going to be there on foggy days. Aside from this, lots in this area are usually larger and have been selling for $900,000 ish. This has also been under contract for a while (since 3/22/17) which may mean they are seeing if they can get their plans approved before nailing down the purchase. These "long in the tooth" contracts seem to be more prone to kick back since they usually have more conditions put on them, so we will see. Anyway, $1M (to start, they havent built anything yet!) to be on the Airport Fence is pretty amazing to me.
31 Youngs Way $695,000 Offer To Purchase after 68 Days on the market. This is in the area of Bayberry Lane (whose lots are typically 4 times the size of this) but on a residential/commercial street, thus the RC zoning (50% ground cover so you can put a lot of stuff here!). Other recent sales of these lots have been in the $450K range. This lot being at the end of the road (alongside Ticcoma Way) would make it a little more valuable, but not this much. Regardless, it has an accepted offer and we will soon see what someone was willing to pay.
18 Bishops Rise $1,275,000 Under Contract (otherwise known as P&S or Purchase and Sale) Nearly 2 Acres. In the Dionis area, some of these lots are on a hill and have views to the north over Nantucket Sound. #14 is on the market (built in 1994, renovated (and I mean RENOVATED!) in 2015) for $3.995M with a cottage and pool, etc. Nearby 28 Swift Rock Rd sold for $4.1M in Nov 2016 but is subdividable into 2 lots. Another interesting nearby sale is 54 Eel Point Rd, sold 11/20/15 for $3.5M, a lowball offer from a $4.995M ask (which started way back in 2011 at $5.95M!). It was also subdividable and the extra lot is now for sale for $2.75M which I doubt they will get but it would make the remaining house really cheap at only $750K for a ~$2.5M house! Most other sales have been in the $2.4-2.7M range. In the end I'd like to see this lot at 18 a little cheaper, closer to $1M, but we will see what it goes for. (Update 6/28/17 SOLD $1,200,000 or about 40% of a $3M project.)
Wednesday, June 14, 2017
Catching Up!
Here I will attempt to catch up from last Sept which was my last update on the old site. Many of the lots for sale back then have sold, but some still linger on the market some 9 months later.
First those that I featured on the old site that have sold, going backwards in time:
June 2017:
86 Hummock Pond Rd, SOLD $625,000 which is above the last $598K ask. This is the lot that I questioned the buildability of because it is almost entirely wetlands (leaving only a 1400 sq ft foot print...not enough room for a septic system) and while it is in the sewer district, there is no sewer in the street yet. "3-5 years maybe" is what I was told as a possible timeline on the sewer extension. Maybe. The Town web site still lists it as unbuildable with a scant $135K assessment. Interesting.
11 Bayberry Ln $695,000 (UPDATE 6/17/17 SOLD $633,500 He may have made about $50K here) This lot sold on 9/21/15 for $541,000. The owner got through HDC with a large Huntington modular home with pool, etc then apparently changed his mind. This is now under contract. If he's getting anywhere near his asking price, he's making some $$$ here. This is about a $1.5M neighborhood (#18 Bayberry just listed for $1.695M), so a $695K land sale here would be kind of expensive (40% of a $1.7M sale giving a $10K credit for the plans).
May 2017:
33 New St "B" SOLD $775,000 This is where the old Sconset water tank used to be. The Town sold the original double lot for $885,000 on 11/12/14. Their cost for lot "A" is now just $110,000. How do you get a lot on Nantucket for $110,000? You buy it from the stupid Town of Nantucket, thats how. Why the Town didnt subdivide the property first, I dont know, they were handing this buyer a big pot of cash ($665,000) by not . Duh.
9 Swain St SOLD $1.8M This is interesting as this property was recently sold along with 7 Swain in May 2016 for a total of $2.35M. The new owner shifted the lot lines around and now has basically sold 1/2 of it for $1.8M leaving a $550K lot cost for the remaining lot, not bad for Brant Point! Although this $1.8M seems REALLY high to me, if you assume they could get the same for the remaining lot, they could have a gross profit of $1.25M, or a 53% return in one year without banging one nail. This is similar to what the buyers of 11 Union St did. Now they can build a spec house on the remaining lot and add another million (maybe) to their profit margin.
APRIL 2017:
9 Pilgrim Rd $2,512,685 (that must have been quite the negotiation!) This is a portion of the the lot (originally with 2800 sq ft home) that sold for $3.15M on 9/25/14. I cant tell what portion of the lot it is, but it appears they are dividing it up into 3 lots. This is right next door to the 5 Pilgrim lots that someone is still trying to make some $$ from without actually building anything.
FEB 2017:
8 Nonantum SOLD $830,000 from an ask of $955,000. This was for sale for a while along with the neighboring house that was renovated, 154 Surfside Rd, which also sold in Feb for $2.32M . More often than not, when things sell at the same time, its the same buyer. Both the house and the lot sold from the same owner, to the same buyer, to apparently another same buyer again. The flippers bought the house in 12/13 for $870K and the lot in 8/15 for $675K for a total INITIAL investment of $1.545M. Total sales were $3.15M, or a PRE-RENO profit of $1.605M ($155K from the lot). I doubt they spent that much on the reno, so it looks like they made some $$ on this venture, probably around $800K if I were to guess.
If you are seeing a pattern here, you are not alone! Speculators are buying properties that can be subdivided into 2 lots and are selling off the 2nd lot to lower their cost on the original. Interestingly they are NOT DEVELOPING the 2nd lot but only using it to lower their cost of the project on the first one. 11R Union is another example of this. The original buyer of 11 Union is trying to get $2.895M for the renovated house they paid only $435K for after selling off the 2nd lot. The buyer of 11R Union is trying to get $3.495M for the new house they built on the 2nd lot (11R) they paid $1.1M for. See the "Old Site" post for an extensive listing of recent sales on Union St. I think its the first mouse getting the cheese on this, as I see both these houses selling in the $2.4-$2.6M range, in which case the 11R people may not make much profit, if anything at all..
10 Seikinnow PL SOLD $550,000 This lot was on the market only 50 days this winter. Anything in the range sells quick. The neighborhood value is in the $1.2-$1.4M range making this between 39 and 46% of the likely finished value. The days of 25% land cost are long gone unless you find something subdividable, which is getting more and more difficult along with the prices going up. Sellers of subdividable land know the potential value (except for the Town, that is).
Jan 2017 2 Camelia Ln $695,000. This is the lot I sold. Altogether I think the buyer got a good price, along with the timing was good for me. We were going to close Dec 29 but I thought why not push it into a new tax year especially with the possibility of Tax Reform and lower rates. How about the first business day in 2017, the 3rd? It was the buyers birthday. Perfect. One of the 4 properties I bought with the proceeds is a 7 acre marsh front property with dock and a marsh island, a property I had been watching for TEN YEARS. It came back on the market just at the right time and at greatly reduced price. I had it under agreement within 24 hours of it being listed for just 31% of the asking price in 2007 (and only 87% of what he paid in 2005 not including 550 ft of dock, 1600 ft of water service and a registered survey and septic permit!). Had my sale been at any other time, I would have missed it. Meanwhile his project on Nantucket is well along in the framing stage. Although I probably could have got a little more had I been willing to wait, I would have missed this sunset. Sometimes the stars align and everything just makes sense.
Dec 2016
18 Parsons Ln in Tom Nevers SOLD for $995,000 after being on the market for 284 days. I may be wrong but I think this was listed before. Some of the higher priced lots are selling because the inventory under $1M has been, and still is Jack Squat.
9 North Point, Warrens Landing, SOLD $560,000 from a $579K ask after being on the market for 469 days. I used this as a comp to 2 Camelia, not that is was directly comparable (really nothing available was), but to demonstrate what a good value the extra cost was in buying my lot. The extra $135,000 the buyer paid for my lot will likely net a $1M higher value property. Now he will likely spend more on the house than this guy will, but thats still a pretty good land cost to higher value ratio for the difference, at just 13.5%.
Rear Plainfield $1.5M from a $1.695M ask. This higher priced lot was on the market 367 days. It is interesting that it seems that while there were quite a few higher priced lots on the market for quite a while, they are starting to sell and at pretty close to their ask. Its also interesting that the sellers of these lots were willing to wait for it.
Nov 2016
14 Pippens Way SOLD $1.35M/1.395 ask 841 DOM, 16 Pippens Way SOLD $1.575M/1.595 Ask 403DOM, in OCT 6 Pippens Way SOLD 1.375M/$1.45 Ask 863 DOM. More higher priced lots selling after long listing times very close to the asking prices.
12B Oak Hollow SOLD $765K (795K ask) after 240 DOM (Days On Market). Lot A sold in September for the same $765K price (these buyers were obviously watching the market and knew what the first lot sold for, which was a good indication of what the seller would let this one go for)
OCT 2016
7 Gardner, portion $675,000 ($950K ask). This was one of those "81L" lots in that it had a structure (garage) that had been on the lot for 50 years, which made the lots subdividable regardless if it had the proper square footage required by zoning. It seems crazy to me that this can be done, but people are taking advantage of it. 10 Weymouth (spin-off lot sold for $700,000 and 11 Union (spin-off sold for $1.1M) are other examples of this. This spin-off lot at 7 Gardner sold to the same people who bought the house. It is unknown to me what their plans are. I used all these as comps to my lot since they were the only other lots in Town, plus they were 1/2 the size of mine but priced significantly higher. Aside from the 11R Union, they ended up selling at a good discount to ask, but very close to what 2 Camelia sold for.
SEPT 2016
48 Westchester St SOLD $885,000 (ask was $895K). It seems this is one of those "Hey you have a double lot there, want to sell the side yard?" type of things. This is the degree to which the island is being scoured for vacant land. This was purchased by the same spec builder that build 1 Long Pond Dr, which I used extensively as a barometer for building costs. This has just come up on the market nearing completion for $2.595M. He seems to have a good knack for mid range ($2M area) spec homes that are well done, well priced and sell quickly. I expect no different here. This lot is about the same size as 2 Camelia and a similar distance to Town, but sold for $190,000 more. When finished, 2 Camelia will have a very similar value to this. Like I said, the buyer of 2 Camelia got a good price.
59 Westchester St $1,440,000 ($1.495M ask) This .23 acre lot was on the market for 415 days. The nearby lot at 65 Westchester is still on the market for $1.998M. This area has seen significant buildup over the last few years and home to a few successful $5M+ spec sales. Although the lot at 59 is smaller and wouldnt fall into the $5M category, the lot at #65 could. However, $1.998M is 40% of $5M, so it still seems a little high (especially to spec builders), which is apparently why its still on the market.
FEATURED ON THE OLD SITE AND STILL FOR SALE:
16 West York Ln $595,000. Although apparently off market as I write this, this lot has been on the market for 2+ years. I havent yet seen anything that indicated it is under agreement, so I wouldnt be surprised to see it come back. While it is nearby to 2 Camelia, it is in different zoning that gave 2 Camelia a 60% ground cover advantage. Also the neighborhood sells for around $1.25M, half of what a completed 2 Camelia would be worth. 2 Camelia's location was also superior, so I had no problem being priced higher than this lot. A lot of people who called asked about this lot because it was nearby, similar in size, but priced $150K less than mine. Once I explained the difference, they understood why.
Hydrangea Lane lots. I used these as comps because they were about the only lots on the market that would barely produce a $2M property (I was thinking a $2.5M final value for 2 Camelia, but given what the new owner is doing, its probably a bit more). 2 Camelia also compared favorably due to the zoning which gave 2 Camelia about a 1000 sq ft ground cover advantage over these lots. I'll have to look, but I still dont think any of these lots have sold. See the "Old Site" post for discussion of this neighborhood. I dont know what it is, but it seems awful difficult to sell anything on this street. #6, #9 (you can get a deal if you buy both) are still for sale. #4 is as well, as well as the house at #2 is still available for $2.25M (reduced from $2.495M). If you are on Zillow, dont get excited at the listings on the street for $1.3M as they are on Hydrangea Lane in Chatham Ma, not Nantucket!
10 York St $950,000. This listing is back on Zillow (and not on Nantucket LINK) with the same Boston broker. I dont know if it is a friend or relative of the owner, but all I can say is that 7 acre marsh front piece of property with the island I watched for 10 years was listed by an out of town broker. I dont care if its your identical twin brother or sister, dont list with an out of town broker. Oh, the other thing is dont list it at more than twice what its actually worth! On the "Old Site" post I demonstrate the firmly planted $1.3M selling price of this street, making this lot an astronomically high 73% of probable final value. In other words you will lose your shirt at this price. If this sold at the same ratio 2 Camelia did, the selling price would be $361,400. Thats how far out of whack this is. This is probably the most overpriced property on Nantucket. UPDATE 6/16/17 The house at 20 York is under agreement!
20A York St $750,000. This wasnt on the market before, but since its 3 doors up from #10 I'm including it here. This original house sold on 6/4/13 for $1.255M. Because it had an old garage, it can be subdivided! Crazy! I guess they fixed the house up and are trying to get $1.425M for it, plus $750K for the back yard (which by itself is 1600 sq ft bigger than 10 York St). A nice return if they can get it. Now all things being equal, I would rather be tucked in off one of the busiest streets on the island, never mind the 1600 sq ft bigger lot (and thus 800 sq ft bigger foot print you can have) , and never mind the $200,000 better price. Still, at $750K, you are still dealing with a $1.3M street price, or a 57.6% land cost. We will see what the house sells for, a 90% offer would be 1.282M, right in the selling spot for this street. So while the house is properly priced, the lot is still expensive, even though it is $200,000 less than the crazyness at #10. This is yet another case of "buy a subdivedable property and spin off the extra lot" instead of developing it. I guess if you can get enough for the lot that you wouldnt have made that much more in developing it, especially if you can reap the SAME without hammering a nail, then you might as well sell it and cash in now. What this means is the 2nd guy doesnt do as well.
55 Goldfinch Dr $599,000 This is lot still on the market with HDC approved plans for a Huntington modular. This price represents 46% of the usual current max price of $1.3M in this neighborhood, so still a little high if you ask me. They bought it 7/31/15 for $512,500 so when you figure what they are going to actually eventually get for it, plus the cost of the plans ($10K?), $10K Land Bank fee, with 5% commission, they arent going to be making a lot, if any. In fact if the above assumptions are correct, their break even is around $560K. I noticed the house is pretty big for the neighborhood, maybe they should scale back the house and build it, although at 2000 sq ft and a sale price of $1.2M they barely break even there too. In the end what this looks like is they overpaid for the land.
18 Mount Vernon St $980,000 This is still on the market without any budge in the price. It is comparable in area (and zoning) to 2 Camelia but is still $285,000 more than what 2 Camelia sold for. Like I said, I probably could have gotten a little more for my lot had I waited, but nothing like this more! At the time I thought 2 Camelia compared very well against this lot, both in price and in its more private location. This lot is located across from a cemetery, so no one is going to be building there, but it is on a "V" of 2 streets, so you have traffic on 2 sides of you. Its not a terrible spot by any means, but the only parameter that can be changed here is the price, and I think that needs to change before this property moves. My official guestimate on where this will move is in the $800,000 area.
2 Seven Mile Lane $995,000 (with HDC Plans), 4 Seven Mile Lane $925,000 These lots have been on and off the market for a while with no movement. They are just outside of Sconset and border hundreds of acres of conservation land, so a nice view out the back balcony. They are also down a short dead end lane which means hardly any traffic. These are certainly in the 30% land cost to finished value range, so I dont see these as terrible overpriced. With people effectively paying over 2x assessed value for land because they bought a house just for the lot, I dont see these being on the market too much longer. Maybe a little budge in the price will attract a buyer. I would think #4 will sell first since its further down the lane and I'm not sure the plans for #2 are worth the extra $70,000 (Especially if those plans are not what you want!).
First those that I featured on the old site that have sold, going backwards in time:
June 2017:
86 Hummock Pond Rd, SOLD $625,000 which is above the last $598K ask. This is the lot that I questioned the buildability of because it is almost entirely wetlands (leaving only a 1400 sq ft foot print...not enough room for a septic system) and while it is in the sewer district, there is no sewer in the street yet. "3-5 years maybe" is what I was told as a possible timeline on the sewer extension. Maybe. The Town web site still lists it as unbuildable with a scant $135K assessment. Interesting.
11 Bayberry Ln $695,000 (UPDATE 6/17/17 SOLD $633,500 He may have made about $50K here) This lot sold on 9/21/15 for $541,000. The owner got through HDC with a large Huntington modular home with pool, etc then apparently changed his mind. This is now under contract. If he's getting anywhere near his asking price, he's making some $$$ here. This is about a $1.5M neighborhood (#18 Bayberry just listed for $1.695M), so a $695K land sale here would be kind of expensive (40% of a $1.7M sale giving a $10K credit for the plans).
May 2017:
33 New St "B" SOLD $775,000 This is where the old Sconset water tank used to be. The Town sold the original double lot for $885,000 on 11/12/14. Their cost for lot "A" is now just $110,000. How do you get a lot on Nantucket for $110,000? You buy it from the stupid Town of Nantucket, thats how. Why the Town didnt subdivide the property first, I dont know, they were handing this buyer a big pot of cash ($665,000) by not . Duh.
9 Swain St SOLD $1.8M This is interesting as this property was recently sold along with 7 Swain in May 2016 for a total of $2.35M. The new owner shifted the lot lines around and now has basically sold 1/2 of it for $1.8M leaving a $550K lot cost for the remaining lot, not bad for Brant Point! Although this $1.8M seems REALLY high to me, if you assume they could get the same for the remaining lot, they could have a gross profit of $1.25M, or a 53% return in one year without banging one nail. This is similar to what the buyers of 11 Union St did. Now they can build a spec house on the remaining lot and add another million (maybe) to their profit margin.
APRIL 2017:
9 Pilgrim Rd $2,512,685 (that must have been quite the negotiation!) This is a portion of the the lot (originally with 2800 sq ft home) that sold for $3.15M on 9/25/14. I cant tell what portion of the lot it is, but it appears they are dividing it up into 3 lots. This is right next door to the 5 Pilgrim lots that someone is still trying to make some $$ from without actually building anything.
FEB 2017:
8 Nonantum SOLD $830,000 from an ask of $955,000. This was for sale for a while along with the neighboring house that was renovated, 154 Surfside Rd, which also sold in Feb for $2.32M . More often than not, when things sell at the same time, its the same buyer. Both the house and the lot sold from the same owner, to the same buyer, to apparently another same buyer again. The flippers bought the house in 12/13 for $870K and the lot in 8/15 for $675K for a total INITIAL investment of $1.545M. Total sales were $3.15M, or a PRE-RENO profit of $1.605M ($155K from the lot). I doubt they spent that much on the reno, so it looks like they made some $$ on this venture, probably around $800K if I were to guess.
If you are seeing a pattern here, you are not alone! Speculators are buying properties that can be subdivided into 2 lots and are selling off the 2nd lot to lower their cost on the original. Interestingly they are NOT DEVELOPING the 2nd lot but only using it to lower their cost of the project on the first one. 11R Union is another example of this. The original buyer of 11 Union is trying to get $2.895M for the renovated house they paid only $435K for after selling off the 2nd lot. The buyer of 11R Union is trying to get $3.495M for the new house they built on the 2nd lot (11R) they paid $1.1M for. See the "Old Site" post for an extensive listing of recent sales on Union St. I think its the first mouse getting the cheese on this, as I see both these houses selling in the $2.4-$2.6M range, in which case the 11R people may not make much profit, if anything at all..
10 Seikinnow PL SOLD $550,000 This lot was on the market only 50 days this winter. Anything in the range sells quick. The neighborhood value is in the $1.2-$1.4M range making this between 39 and 46% of the likely finished value. The days of 25% land cost are long gone unless you find something subdividable, which is getting more and more difficult along with the prices going up. Sellers of subdividable land know the potential value (except for the Town, that is).
Jan 2017 2 Camelia Ln $695,000. This is the lot I sold. Altogether I think the buyer got a good price, along with the timing was good for me. We were going to close Dec 29 but I thought why not push it into a new tax year especially with the possibility of Tax Reform and lower rates. How about the first business day in 2017, the 3rd? It was the buyers birthday. Perfect. One of the 4 properties I bought with the proceeds is a 7 acre marsh front property with dock and a marsh island, a property I had been watching for TEN YEARS. It came back on the market just at the right time and at greatly reduced price. I had it under agreement within 24 hours of it being listed for just 31% of the asking price in 2007 (and only 87% of what he paid in 2005 not including 550 ft of dock, 1600 ft of water service and a registered survey and septic permit!). Had my sale been at any other time, I would have missed it. Meanwhile his project on Nantucket is well along in the framing stage. Although I probably could have got a little more had I been willing to wait, I would have missed this sunset. Sometimes the stars align and everything just makes sense.
Dec 2016
18 Parsons Ln in Tom Nevers SOLD for $995,000 after being on the market for 284 days. I may be wrong but I think this was listed before. Some of the higher priced lots are selling because the inventory under $1M has been, and still is Jack Squat.
9 North Point, Warrens Landing, SOLD $560,000 from a $579K ask after being on the market for 469 days. I used this as a comp to 2 Camelia, not that is was directly comparable (really nothing available was), but to demonstrate what a good value the extra cost was in buying my lot. The extra $135,000 the buyer paid for my lot will likely net a $1M higher value property. Now he will likely spend more on the house than this guy will, but thats still a pretty good land cost to higher value ratio for the difference, at just 13.5%.
Rear Plainfield $1.5M from a $1.695M ask. This higher priced lot was on the market 367 days. It is interesting that it seems that while there were quite a few higher priced lots on the market for quite a while, they are starting to sell and at pretty close to their ask. Its also interesting that the sellers of these lots were willing to wait for it.
Nov 2016
14 Pippens Way SOLD $1.35M/1.395 ask 841 DOM, 16 Pippens Way SOLD $1.575M/1.595 Ask 403DOM, in OCT 6 Pippens Way SOLD 1.375M/$1.45 Ask 863 DOM. More higher priced lots selling after long listing times very close to the asking prices.
12B Oak Hollow SOLD $765K (795K ask) after 240 DOM (Days On Market). Lot A sold in September for the same $765K price (these buyers were obviously watching the market and knew what the first lot sold for, which was a good indication of what the seller would let this one go for)
OCT 2016
7 Gardner, portion $675,000 ($950K ask). This was one of those "81L" lots in that it had a structure (garage) that had been on the lot for 50 years, which made the lots subdividable regardless if it had the proper square footage required by zoning. It seems crazy to me that this can be done, but people are taking advantage of it. 10 Weymouth (spin-off lot sold for $700,000 and 11 Union (spin-off sold for $1.1M) are other examples of this. This spin-off lot at 7 Gardner sold to the same people who bought the house. It is unknown to me what their plans are. I used all these as comps to my lot since they were the only other lots in Town, plus they were 1/2 the size of mine but priced significantly higher. Aside from the 11R Union, they ended up selling at a good discount to ask, but very close to what 2 Camelia sold for.
SEPT 2016
48 Westchester St SOLD $885,000 (ask was $895K). It seems this is one of those "Hey you have a double lot there, want to sell the side yard?" type of things. This is the degree to which the island is being scoured for vacant land. This was purchased by the same spec builder that build 1 Long Pond Dr, which I used extensively as a barometer for building costs. This has just come up on the market nearing completion for $2.595M. He seems to have a good knack for mid range ($2M area) spec homes that are well done, well priced and sell quickly. I expect no different here. This lot is about the same size as 2 Camelia and a similar distance to Town, but sold for $190,000 more. When finished, 2 Camelia will have a very similar value to this. Like I said, the buyer of 2 Camelia got a good price.
59 Westchester St $1,440,000 ($1.495M ask) This .23 acre lot was on the market for 415 days. The nearby lot at 65 Westchester is still on the market for $1.998M. This area has seen significant buildup over the last few years and home to a few successful $5M+ spec sales. Although the lot at 59 is smaller and wouldnt fall into the $5M category, the lot at #65 could. However, $1.998M is 40% of $5M, so it still seems a little high (especially to spec builders), which is apparently why its still on the market.
FEATURED ON THE OLD SITE AND STILL FOR SALE:
16 West York Ln $595,000. Although apparently off market as I write this, this lot has been on the market for 2+ years. I havent yet seen anything that indicated it is under agreement, so I wouldnt be surprised to see it come back. While it is nearby to 2 Camelia, it is in different zoning that gave 2 Camelia a 60% ground cover advantage. Also the neighborhood sells for around $1.25M, half of what a completed 2 Camelia would be worth. 2 Camelia's location was also superior, so I had no problem being priced higher than this lot. A lot of people who called asked about this lot because it was nearby, similar in size, but priced $150K less than mine. Once I explained the difference, they understood why.
Hydrangea Lane lots. I used these as comps because they were about the only lots on the market that would barely produce a $2M property (I was thinking a $2.5M final value for 2 Camelia, but given what the new owner is doing, its probably a bit more). 2 Camelia also compared favorably due to the zoning which gave 2 Camelia about a 1000 sq ft ground cover advantage over these lots. I'll have to look, but I still dont think any of these lots have sold. See the "Old Site" post for discussion of this neighborhood. I dont know what it is, but it seems awful difficult to sell anything on this street. #6, #9 (you can get a deal if you buy both) are still for sale. #4 is as well, as well as the house at #2 is still available for $2.25M (reduced from $2.495M). If you are on Zillow, dont get excited at the listings on the street for $1.3M as they are on Hydrangea Lane in Chatham Ma, not Nantucket!
10 York St $950,000. This listing is back on Zillow (and not on Nantucket LINK) with the same Boston broker. I dont know if it is a friend or relative of the owner, but all I can say is that 7 acre marsh front piece of property with the island I watched for 10 years was listed by an out of town broker. I dont care if its your identical twin brother or sister, dont list with an out of town broker. Oh, the other thing is dont list it at more than twice what its actually worth! On the "Old Site" post I demonstrate the firmly planted $1.3M selling price of this street, making this lot an astronomically high 73% of probable final value. In other words you will lose your shirt at this price. If this sold at the same ratio 2 Camelia did, the selling price would be $361,400. Thats how far out of whack this is. This is probably the most overpriced property on Nantucket. UPDATE 6/16/17 The house at 20 York is under agreement!
20A York St $750,000. This wasnt on the market before, but since its 3 doors up from #10 I'm including it here. This original house sold on 6/4/13 for $1.255M. Because it had an old garage, it can be subdivided! Crazy! I guess they fixed the house up and are trying to get $1.425M for it, plus $750K for the back yard (which by itself is 1600 sq ft bigger than 10 York St). A nice return if they can get it. Now all things being equal, I would rather be tucked in off one of the busiest streets on the island, never mind the 1600 sq ft bigger lot (and thus 800 sq ft bigger foot print you can have) , and never mind the $200,000 better price. Still, at $750K, you are still dealing with a $1.3M street price, or a 57.6% land cost. We will see what the house sells for, a 90% offer would be 1.282M, right in the selling spot for this street. So while the house is properly priced, the lot is still expensive, even though it is $200,000 less than the crazyness at #10. This is yet another case of "buy a subdivedable property and spin off the extra lot" instead of developing it. I guess if you can get enough for the lot that you wouldnt have made that much more in developing it, especially if you can reap the SAME without hammering a nail, then you might as well sell it and cash in now. What this means is the 2nd guy doesnt do as well.
55 Goldfinch Dr $599,000 This is lot still on the market with HDC approved plans for a Huntington modular. This price represents 46% of the usual current max price of $1.3M in this neighborhood, so still a little high if you ask me. They bought it 7/31/15 for $512,500 so when you figure what they are going to actually eventually get for it, plus the cost of the plans ($10K?), $10K Land Bank fee, with 5% commission, they arent going to be making a lot, if any. In fact if the above assumptions are correct, their break even is around $560K. I noticed the house is pretty big for the neighborhood, maybe they should scale back the house and build it, although at 2000 sq ft and a sale price of $1.2M they barely break even there too. In the end what this looks like is they overpaid for the land.
18 Mount Vernon St $980,000 This is still on the market without any budge in the price. It is comparable in area (and zoning) to 2 Camelia but is still $285,000 more than what 2 Camelia sold for. Like I said, I probably could have gotten a little more for my lot had I waited, but nothing like this more! At the time I thought 2 Camelia compared very well against this lot, both in price and in its more private location. This lot is located across from a cemetery, so no one is going to be building there, but it is on a "V" of 2 streets, so you have traffic on 2 sides of you. Its not a terrible spot by any means, but the only parameter that can be changed here is the price, and I think that needs to change before this property moves. My official guestimate on where this will move is in the $800,000 area.
2 Seven Mile Lane $995,000 (with HDC Plans), 4 Seven Mile Lane $925,000 These lots have been on and off the market for a while with no movement. They are just outside of Sconset and border hundreds of acres of conservation land, so a nice view out the back balcony. They are also down a short dead end lane which means hardly any traffic. These are certainly in the 30% land cost to finished value range, so I dont see these as terrible overpriced. With people effectively paying over 2x assessed value for land because they bought a house just for the lot, I dont see these being on the market too much longer. Maybe a little budge in the price will attract a buyer. I would think #4 will sell first since its further down the lane and I'm not sure the plans for #2 are worth the extra $70,000 (Especially if those plans are not what you want!).
Sunday, June 11, 2017
Welcome
Welcome to my Nantucket Real Estate Speculator blog where I dump my musings about the sometimes crazy Nantucket real estate market. Most of my interest has been in land because I was selling a piece of the rock (myself, without a broker) and wanted to demonstrate its value to potential buyers.
The content of this blog is my opinion only. I am not a real estate professional, although am considering getting my license here in SC. You get what you pay for...most of the time.
My Nantucket story is not unlike many others, every vacation growing up was to Nantucket. My sister moved to the island around 1980, mother 1991, me in 1993. I spent 21 years on the rock and then moved to Beaufort, SC, which I found on a road trip in 2005, in 2014.
Once I decided I was going to move to America and sell the lot I had on the island, I listed the lot with a local broker. I had no luck at that point I think because the market was just getting started from the Great Recession. The next broker had no luck either but when she had one prospect who was friends with the people next door (they could cut a hole in the hedge and go back and forth!) but failed to mention the barking dog next door was 15 years old, and it takes a year (at least) to build a house (in other words there arent any 16 year old friendly as can be just-wants-to-be-petted Yellow Labs around), it occurred to me that no one would represent my interests better than myself. Against my better judgement, I listed it again with another broker that had the listing next door thinking they would market the possibilities of both of them along with the obvious separate options. In none of their advertising did they mention each other, nor were they even on the same page of advertising. There were errors in the listing that werent corrected after several requests to correct. I was assured it was being shown "a lot", but I think since the property next door was an inexpensive fixer upper, most of the people looking at the lot were only there because they were looking at the cheapest house on the island, not because they were a higher level investor looking at what they could do with two adjoining properties. While this was not really his fault, when that listing expired I decided to market the property on my own.
While this sale was in the bottom 5 percentile of sales on the island (and thus commissions), it was incredibly important to me.
I was told by several brokers that FSBOs (For Sale By Owner) dont work on Nantucket. If you notice, there are no real estate yard signs on Nantucket. This isnt so much that its a stuffy place (which sometimes it is), it was more an effort by the real estate companies to snuff out FSBO's. That was a while ago, before Al Gore invented the internet. So when I looked at recent land sales, more than half of them were NOT through a broker! Land was in such demand that buyers werent waiting for land to come to market, they were seeking it out first. Had this been a house I would be more inclined to agree with them, especially since I didnt live on the island anymore. Its pretty difficult to show a house from 850 miles away. But land? "Yea go look at it, give me a call when you're standing on the lot and I'll explain everything".
To market the property, I first put it on Zillow (free!). I know I had spent winters online looking at real estate down south, so I figured people interested in Nantucket real estate were doing the same. They were. I built a (very) basic web site comparing it to all the other land listings, with a bit of commentary on each competing property (I measured the distance to the Hub on Main St, one lot was closer but it was over $5,000 more for each foot it was closer), something real estate agents wouldnt necessarily do since they are trying to sell you ANY property on the island. I got calls from all sorts of people asking all sorts of questions and as a result grew an appreciation for what real estate agents do. Some of the questions led me to do more research as far as valuation went. I compared my lot with others in price vs assessed, price vs likely completed value, price per sq ft of buildable foot print, etc etc. The more research I did, the better the value of the lot was demonstrated...and the longer the web site got. I got a lot of compliments on the web site despite its long winded disorganized state (much like this is becoming) It all convinced me I was in a good spot, both geographically and financially as far as price went. Land on Nantucket is simply running out, especially in town. In addition, being truly vacant meant no HDC saying you couldnt tear down that old house. Thats a rare opportunity in Town.
All my honest, sometimes brutal comparisons with other lots on the market apparently didnt sit well with some agents. I even got a few calls telling me it was illegal to sell real estate on my own. When I asked which agency they worked for the line went dead :) I even had one caller tell me that her agent said my lot was unbuildable. I told her its was a fabrication, but that is something her lawyer would research regardless what lot she bought. Obviously not all real estate agents are like this, but this sure didnt make me feel like trying another one of them!
I researched all the LLCs doing spec homes and sent large sized post cards to their home addresses when I could find them (most town's assessments and real estate information is now online, so once you find out who is behind them you then dig up where they live). I got a few calls from these, many wanting to know how I knew to send a card to them :) Since they are all busy making $1M+ on a $5M specs, they werent really interested in my little project (wait till they run out of "Fivers" and they will be). I quickly figured my buyer would be an end user, and I was right.
I lost several buyers due to builder unavailability. They would stand on the lot in August imagining getting their house built over the winter and have their own piece of Paradise next summer. While it would likely be built over a winter, the question was which winter. Once they were told they wouldnt be able to start for 2 years (so completed THREE summers from now) they changed their mind and bought an existing home, foregoing the potential capture of equity (approx $500,000 in this case) in order to not have to wait to own a home on the island. This was a contributing factor in making the $2m-$2.5M the fastest selling segment on the island, not enough inventory of homes to begin with and virtually zero vacant land available for that segment. There were literally 1 or 2 lots that were in any sense competitive with mine for this given completed price category and mine was by far the best value.
People wondered "what if I dont use it that much" so I gave them an idea of potential rental income and how that could offset their cost of ownership (this is a HUGE factor contributing to Nantucket real estate values). A house on this lot could easily produce $80,000 to $100,000 in summer rentals. So when you look at return on investment, even without price appreciation, Nantucket real estate can be very attractive. Years ago there were agents that hadnt done a loan deal in years. With money as cheap as it is, it makes it even more attractive as it leaves more cash in the owners pockets to invest elsewhere, usually at better returns than the cost of the loan, which lowers the cost of ownership even more. So when you look at Nantucket and how expensive it is, it really isnt. But you still want to know what you are looking at and if it is a good deal.
In the end the buyer of 2 Camelia Ln is doing just that, using the house a couple weeks, and renting it out the rest. He initially saw it on Zillow, read the web site, a few calls, 100's of texts, a very well researched buyer (like many buyers of Nantucket Real Estate buyers are). I look forward to seeing how the house is coming along in my next trip back to ACK.
I still follow the Nantucket market, and will occasionally comment when I see something interesting (with about 5 months of catching up to do!)
The content of this blog is my opinion only. I am not a real estate professional, although am considering getting my license here in SC. You get what you pay for...most of the time.
My Nantucket story is not unlike many others, every vacation growing up was to Nantucket. My sister moved to the island around 1980, mother 1991, me in 1993. I spent 21 years on the rock and then moved to Beaufort, SC, which I found on a road trip in 2005, in 2014.
Once I decided I was going to move to America and sell the lot I had on the island, I listed the lot with a local broker. I had no luck at that point I think because the market was just getting started from the Great Recession. The next broker had no luck either but when she had one prospect who was friends with the people next door (they could cut a hole in the hedge and go back and forth!) but failed to mention the barking dog next door was 15 years old, and it takes a year (at least) to build a house (in other words there arent any 16 year old friendly as can be just-wants-to-be-petted Yellow Labs around), it occurred to me that no one would represent my interests better than myself. Against my better judgement, I listed it again with another broker that had the listing next door thinking they would market the possibilities of both of them along with the obvious separate options. In none of their advertising did they mention each other, nor were they even on the same page of advertising. There were errors in the listing that werent corrected after several requests to correct. I was assured it was being shown "a lot", but I think since the property next door was an inexpensive fixer upper, most of the people looking at the lot were only there because they were looking at the cheapest house on the island, not because they were a higher level investor looking at what they could do with two adjoining properties. While this was not really his fault, when that listing expired I decided to market the property on my own.
While this sale was in the bottom 5 percentile of sales on the island (and thus commissions), it was incredibly important to me.
I was told by several brokers that FSBOs (For Sale By Owner) dont work on Nantucket. If you notice, there are no real estate yard signs on Nantucket. This isnt so much that its a stuffy place (which sometimes it is), it was more an effort by the real estate companies to snuff out FSBO's. That was a while ago, before Al Gore invented the internet. So when I looked at recent land sales, more than half of them were NOT through a broker! Land was in such demand that buyers werent waiting for land to come to market, they were seeking it out first. Had this been a house I would be more inclined to agree with them, especially since I didnt live on the island anymore. Its pretty difficult to show a house from 850 miles away. But land? "Yea go look at it, give me a call when you're standing on the lot and I'll explain everything".
To market the property, I first put it on Zillow (free!). I know I had spent winters online looking at real estate down south, so I figured people interested in Nantucket real estate were doing the same. They were. I built a (very) basic web site comparing it to all the other land listings, with a bit of commentary on each competing property (I measured the distance to the Hub on Main St, one lot was closer but it was over $5,000 more for each foot it was closer), something real estate agents wouldnt necessarily do since they are trying to sell you ANY property on the island. I got calls from all sorts of people asking all sorts of questions and as a result grew an appreciation for what real estate agents do. Some of the questions led me to do more research as far as valuation went. I compared my lot with others in price vs assessed, price vs likely completed value, price per sq ft of buildable foot print, etc etc. The more research I did, the better the value of the lot was demonstrated...and the longer the web site got. I got a lot of compliments on the web site despite its long winded disorganized state (much like this is becoming) It all convinced me I was in a good spot, both geographically and financially as far as price went. Land on Nantucket is simply running out, especially in town. In addition, being truly vacant meant no HDC saying you couldnt tear down that old house. Thats a rare opportunity in Town.
All my honest, sometimes brutal comparisons with other lots on the market apparently didnt sit well with some agents. I even got a few calls telling me it was illegal to sell real estate on my own. When I asked which agency they worked for the line went dead :) I even had one caller tell me that her agent said my lot was unbuildable. I told her its was a fabrication, but that is something her lawyer would research regardless what lot she bought. Obviously not all real estate agents are like this, but this sure didnt make me feel like trying another one of them!
I researched all the LLCs doing spec homes and sent large sized post cards to their home addresses when I could find them (most town's assessments and real estate information is now online, so once you find out who is behind them you then dig up where they live). I got a few calls from these, many wanting to know how I knew to send a card to them :) Since they are all busy making $1M+ on a $5M specs, they werent really interested in my little project (wait till they run out of "Fivers" and they will be). I quickly figured my buyer would be an end user, and I was right.
I lost several buyers due to builder unavailability. They would stand on the lot in August imagining getting their house built over the winter and have their own piece of Paradise next summer. While it would likely be built over a winter, the question was which winter. Once they were told they wouldnt be able to start for 2 years (so completed THREE summers from now) they changed their mind and bought an existing home, foregoing the potential capture of equity (approx $500,000 in this case) in order to not have to wait to own a home on the island. This was a contributing factor in making the $2m-$2.5M the fastest selling segment on the island, not enough inventory of homes to begin with and virtually zero vacant land available for that segment. There were literally 1 or 2 lots that were in any sense competitive with mine for this given completed price category and mine was by far the best value.
People wondered "what if I dont use it that much" so I gave them an idea of potential rental income and how that could offset their cost of ownership (this is a HUGE factor contributing to Nantucket real estate values). A house on this lot could easily produce $80,000 to $100,000 in summer rentals. So when you look at return on investment, even without price appreciation, Nantucket real estate can be very attractive. Years ago there were agents that hadnt done a loan deal in years. With money as cheap as it is, it makes it even more attractive as it leaves more cash in the owners pockets to invest elsewhere, usually at better returns than the cost of the loan, which lowers the cost of ownership even more. So when you look at Nantucket and how expensive it is, it really isnt. But you still want to know what you are looking at and if it is a good deal.
In the end the buyer of 2 Camelia Ln is doing just that, using the house a couple weeks, and renting it out the rest. He initially saw it on Zillow, read the web site, a few calls, 100's of texts, a very well researched buyer (like many buyers of Nantucket Real Estate buyers are). I look forward to seeing how the house is coming along in my next trip back to ACK.
I still follow the Nantucket market, and will occasionally comment when I see something interesting (with about 5 months of catching up to do!)
Saturday, June 10, 2017
Old Site
I figured I would copy the old site here in case someone had a week to kill :)
Updated 9/22/2016
Recent news:
9/21/16 20 Walsh St sold today for $1.96M. It is a small (1300 sq ft) cottage in the Brant Point area. The reason I mention it is because the agent who sold it called me looking for a lot to move the house to. In other words the buyer paid nearly $2M (only $800 short when including Land Bank) for a lot that is 995 sq ft bigger but has a 720 sq ft smaller allowable footprint, not to mention you can forget a full basement here. This means they paid $1071.39 per buildable sq ft less the availability of a basement. I think thats the highest I've ever seen. I need to figure out a way to move this lot to Brant Pt. Maybe I can rename Camelia Lane "Brant Pt Court South" or something.
9/12/16 A newly created lot at 18 Mount Vernon St was just listed for $980,000. This is a 5070 sq ft lot in ROH zoning like 2 Camelia. You can cover 50% of it, so there is 2535 sq ft available ground cover, or only 15 sq ft less than 2 Camelia. So the 2 lots are very comparable in that sense. Price per sq ft of land here is $193.29 vs $146.77 for 2 Camelia. The difference per buildable sq ft is $386.58 here vs $293.55 at 2 Camelia. Since there is no assessment yet, if we look at other similarly sized lots in the area we get an average of $131.52 per sq ft which would mean about $666,835 for this lot. The $980,000 asking price is 147% of this. 2 Camelia is only 116% of assessed. With the $231,000 higher price and the fact you have traffic right there on 2 of the 3 sides of this lot compared to 2 Camelia's more shady and private location, I believe 2 Camelia compares quite well against this new listing.
9/10/16 A vacant lot at 16 Nanachumacke Ln off Hummock pond has been listed for $1.695M. The lot allows for a large 4480 sq ft of ground cover, but you cannot build either a 2nd dwelling nor a studio, so its all got to be the "main" house. Combined with the 4 bedroom shared septic limit, its pretty unlikely you will use that 4480 sq ft of ground cover. This $1.695M ask represents a $400,000 jump from the last "inland" lot sold on this street (#18 $1.295M on 2/7/14). A lot at the end of the road, with views looking down toward Hummock Pond (in other words a superior lot to #16) sold for $1.4M on 7/7/15. At the time I calculated this $1.4M sale to be 47.1% of 128% (current avg sale to assessed for homes) of the average assessment of homes on this road. $1.695M would be a very high 60.8% of that number ($2.792M). 60.8% of a $2.25M sale at 2 Camelia Ln would be $1.368M.
9/9/16 55 Goldfinch has been listed for $625K. This is a lot with HDC approved plans for a 3500 sq ft (big for Naushop) Huntington modular home. This lot sold on 7/31/15 for $512,500. Considering the absolute max price in Naushop is about $1.3M, with the average more toward $1M, this would represent 47.3% of a final $1.3M value (giving it a $10K credit for the approved plans).
9/1/16 For the month of August there were 3 lots sold suitable for 2nd homes (residential 499K and up) with an average selling price of $1.483M and DOM (days on market) of 304 (only for one of the sales though as only one of the three was sold through a broker).
Looking at the past few months:
July only saw 1 sale at $3.112M which was 142% of assessed and was not listed with broker.
June saw 4 sales with an average price of $1.867M, and average price to assessed of 164.5% and 293.5 average DOM.
May had 3 sales with an average price of 1.18M and surprisingly low 84.6% of assessed (the 71% lowball sale at Hydrangea Ln (see below for whats going on in this neighborhood) skewed the results from the other two (92% and 91%). I looked back and these were the 3 lowest sales compared to assessed in the 2nd home market in the last year, they just happened to sell in the same month. As you can see this was not a trend made. Average DOM was 327 only for one sale as 2 out of 3 were not listed with a broker.
The "pipeline" (those with accepted offer and under P&S) consists of 12 lots with an average price of $1.133M, and average price to assessed of 136.95% and an average 362.2 DOM. Of note is only one of the 12 was not listed with a broker, bucking the year+ trend of a majority of lots sold without being listed with a broker, quite a quick, massive shift.
I found this along with the DOM figure to be very interesting and shows that the older land listings are now selling, indicating land is really REALLY running out and the market is catching up with older listings. This also indicates the "land hunters" arent finding what they need as far as unlisted land goes. If there arent enough land listings on the market, buyers will look for lots that arent listed with a broker and contact the owners, which is what we've seen in recent months with approx 2/3rds of land sales coming from "off market" (I've had a few inquiries like these in recent weeks, they havent even seen Zillow or this web site). Then if thats not enough, buyers are forced back to the listed lots. It appears that is what we are seeing now. The question is, where will they go once the listed lots are gone??? Martha's Vineyard? Also in a market where 80% of land listings are over $1M, 63% of this pipeline is under $1M meaning more than 1/2 the pipeline is coming from only 20% of the market. In other words, land under $1M is disappearing extremely quickly. As of today there are only 6 lots 500K-795K and 10 lots $895K-1M.
8/25/16 A couple of weeks back the junk yard at 49 Hummock Pond Rd as well as a couple of lots on Hawthorne Lane sold for a total of $3.975M, or 135.4% of the total assessments (which is only counted as 100% on everyone's web site). I couldnt believe this place was cleaned up so I took a ride by and I was right, there are still probably 100 cars, trucks, jeeps, etc etc etc in there. The obvious value here is in subdivision, but when people are paying 135% of assessed for a junk yard that isnt yet cleaned up....wow. It will be nice to have that place cleaned up, but cleaned up doesnt mean just cleaning up the surface....people havent been able to use wells in that area for years. I guess we'll see. Maybe they will install an oil well and hit it big. Either way, nice to see it getting cleaned up. Update: While I was on the boat headed back to America, there was a flatbed truck with 4 crushed cars on the back, each with a number spray painted on the side. The highest # was 116, so there were at least that many cars there.
8/24/16 36 York St has sold for $1.485M This is a cute nicely restored house on a tiny lot with zero room for expansion 5 feet from a busy street just up the hill from 5 corners. A $1.5M ($1,514,700 after Land Bank tax) sale here certainly demonstrates not only the vacant lot value of 2 Camelia, but its potential finished value as well.
8/19/16 A lot at 2 Cato Lane just came on the market for $635K with HDC approved plans. This is not a building permit, but HDC approved plans can be handy and speed things along IF those plans are what you want. If what you want is significantly different, it can be of questionable value since you have to go back to HDC for any changes, plus the cost of re-design, etc. This lot is located behind the hospital off of Vesper Ln at the end of a short dead end dirt road. It is similar in size to 2 Camelia (500 sq ft bigger) but is in R1 zoning, so your ground cover is limited to 1665 sq ft, or about 885 sq ft less than 2 Camelia. 2 sides of this lot abut Town owned park property ("Dead Horse Valley" where the kids go sledding when it snows), so you have nobody on one side (well, for 170 feet anyway, there is a subdivision going in up on the hill) or in back of you. Because of the way the lots are situated and because the lot is only 56 ft wide, the house next door (a Huntington modular, so go look if you are interested in them) will be only 15 feet from yours. The lot was bought for $425K on 1/6/15 by an LLC which is controlled by a local real estate broker, who kinda shoulda disclosed that. If it was just straight in his name he would be required to disclose that "owner is a licensed Massachusetts Real Estate Broker", so I think he should have here as well.
Due to this being close to the Hospital, you might have a bit of OCCASIONAL helicopter noise when Medflights come in (center of lot is 1135 ft away from center of helipad, 2 Camelia is 1455 ft), but its really nothing at all like being next to the airport. 2 Camelia can get some of this noise occasionally as well depending on the wind direction, but I've always had the attitude that someone is having a much worse day than I am if they have to go for a ride in that thing, so who cares about 20 seconds of noise when the neighbors lawn getting mowed takes 20 minutes.
Anyway as far as comps, 2 Cato is priced at a high 256% of its $243K assessment (I gave it a $10K credit for the HDC plans). 2 Camelia is priced at 116% of pretty uniform neighborhood assessment. This lot sold for $425K on 1/6/15, about 20 months ago. The lot next door (#4) sold for $305K on 7/9/13 (another example of why spec builders cant expect to buy new land at 2013 prices, a 39% appreciation in 18 months). And this buyer, a real estate broker, who should be "in the know" (which is why he should have disclosed his involvement), figured on even more appreciation in the next year or so (47% more actually). Thats 105% appreciation in 3 years if it sells for $625K. On 9/30/15 the 2200 sq ft Huntington modular house built on the lot at #4 sold for $1.25M. Incidentally, if you bought 2 Cato for $625K and built the same 2200 sq ft Huntington like next door for $275/sq ft, your total investment would be $1.23M, or only $20K less than #4 sold for a year ago, so not much equity there! This would be like me asking $1.6M for 2 Camelia. Whoever did the house at #4 made money because they paid $320,000 less for the land. A $1.57M sale at #2 would be required to make the same dollar profit today. To make the same percentage return the selling price would need to be $1.614M.
The asking price (excluding 10K HDC credit) is exactly 50% of this sale next door (land cost to final value - 2 Camelia is 33.2%). #2 Cato is a little nicer lot than #4 next door though because it has open space on 2 sides and is at the end of the street, but we arent talking millions here. A sale of $1.882M would be required in order to equal the same 33.2% land to value at 2 Camelia. While I can see a higher sale than next door, I dont think that much higher (maybe $1.5M? -I try to be generous in others, conservative on mine), which would make $625K 41.6% of the final value. If 2 Camelia were valued at 41.6% of my $2.25M final estimate, the price would be $936K. Going the other way, a $498K price for 2 Cato would be required for this lot if this was priced at 33.2% of a $1.5M final sale price.
This is a 450 ft longer walk to the Hub on Main St, but I measured right out the back door through Dead Horse Valley, up the hill (for Nantucket, this is a HILL!) across Prospect and down North Mill St, a nice walk, so I would call it about even on that.
Its not a bad lot or anything, its just in a different price bracket and this price for this bracket is a little high. If you bought 2 Camelia for $749,000 and sold it for $2.25M, your $124,000 higher land cost would net you a $750,000 higher sales price (figuring an $1.5M sale here at 2 Cato), or only a 16.5% land cost for that additional $750,000 in sales price. So with the much larger ground cover and approx $750K+ higher sale potential, I think 2 Camelia compares quite well against 2 Cato.
8/18/16 a lot at 12 Scotts way sold for $725,000, or 137% of assessed, right at the recent 9 month running average of 136%. This was listed in June of 2015 for $998K, reduced to $875K in July, then to $862,500 in December. The listing then expired 6 months later in May of this year. It appears someone came in with a "lowball" offer after the listing expired. After 5% in commissions, the net proceeds from a $862,500 sale would have been $819K, so this sale was $94K less than that, so it actually was kind of lowball. Still, it was 137% of assessed. Y'all are welcome to make me a "lowball" offer of 137% of the assessment of 2 Camelia Ln ($885K).
7/20/16 Nearby 1 1/2 story 4 bedroom home at 9 Back St (which is next door to the vacant lot also numbered 9 that sold for $1M in 2007) has an accepted offer from a 1.925M ask after being on the market less than ONE DAY. (8/20 I went to the estate sale here and it seemed like a much smaller house than advertised, must be the layout)
6/20/16 The lot at 4 Pilgrim Rd that sold June 3rd for 100% of the $1.195M ask (152% of assessed) has just sold AGAIN for $1.6M! Not bad for holding it all of 2 weeks! People must want to sit in traffic in the Quaker Prospect High School summer traffic backups awfully bad!
The sale of 10 Weymouth St (portion of) for $700,000, a 2877 sq ft spin-off from 10 Weymouth is news. The house itself has also sold the same week for $1.7M giving the street a slight sales boost from the $1.485M sale across the street and a land to value ratio of 41.1%. If this ratio were applied to 2 Camelia, the price would be $926,000. It sold for $243 per sq ft (this would translate into $1.241M if applied to 2 Camelia). 2 Camelia Ln is priced at $146.77 per sq ft , which is right about where the other 3 undersized lots on Weymouth St are assessed at (avg $145.89/sq ft). This average assessed value applied to the newly split off lot would come to about $417,424 for my estimated assessed value for this new lot. This $700,000 sale price was 167% of that. 167% of the assessed value of 2 Camelia Ln (646K) would be $1.078M. There are numerous other examples below that point to a $1M+ value for 2 Camelia Ln.
This runs a bit long, and is turning into a bit of a admittedly disorganized long winded blog since any time there is something new to add, it doesnt make the old stuff obsolete. Regardless my long windedness, if you are shopping for land on Nantucket, I think it'll be worth the 15 minute read regardless which property you decide to purchase. If you are buying land to build a house that you will have in the family for years and years, then all these numbers might mean a little less than if you are building it purely for investment. Either way you want to know if you are getting a good deal.
If you are building on spec, its all numbers. Spec builders are going to have an increasingly difficult time buying land using numbers of just a couple of years ago, especially with 2013-2014 land prices and 2016 home prices. The recent purchase of the junk yard and its 100+ vehicles demonstrates this quite loudly. Land running out is causing them to look at existing houses for just the land, which effectively drives up land costs 30-50%. This in a crazy way can make a dumpy 1970's ranch more attractive than an 1850 colonial because you cant tear the 1850 colonial down, but you can demo that 1970's ranch in a heartbeat. In looking at recent HDC agendas, it looks like the demo derby has already begun.
If you are buying just to park some money in something solid but are afraid of buying at the top, I'm not a psychic, but you are getting this lot at a 25% discount to what a nearby (250 ft away) similarly sized lot (without the privacy factor of Camelia lane) sold for 9 1/2 years ago (9 Back St, yes thats NINE years ago at the peak) and for the same price a similarly sized lot 850 feet away (again without the privacy factor) sold for 3 years ago in May of 2013 (8 Coon St).
Nantucket is a very unique market, both in real estate and the entire island economy as a whole. While Nantucket is not immune to economic gyrations, it is typically a bit more insulated to slumps primarily because people with money still have money during a recession. During the Great Recession the number of sales took a hit and new construction took a dive (which affected the local tradesmen considerably, over 3000 people left the island by water company usage estimates). But even though the recession hit the Wall St crowd much harder than your average recession, there wasnt a giant wave of foreclosures in the 2nd home market (most were in the lower end - - $500K condos, etc). This is because of the general level of wealth of holders of Nantucket real estate (they werent forced to sell) and the fact that the rental market remained strong. Maybe people weren't buying as many homes, but they still came to Nantucket for their 2 weeks of the Juice Bar and sand between their toes. For example, 18 Back St (corner of Back and Pleasant, the rear of this property is to your left as you turn into Camelia Ln) rents for $6500/week and has over $80,000 worth of bookings for the 2016 summer season (this is before April 1st!) The VRBO # is 130603. Another example is 15 Williams St (google "Earl Gray Nantucket)" which has $86,500 worth of bookings. Its pretty much the same everywhere, already booked! That rental income safety net supported values then, as it does today. Many markets dont have that. Nantucket is unique in a lot of good ways (Amazing restaurants, half the island in preservation, 85 miles of soft sandy beach, etc), but also especially in real estate.
2 Camelia Lane represents the best deal on Nantucket Island that can yield a $2m+ property once developed. The next available lots that (barely) meet this criteria are in Sconset on Hydrandea Ln in Sconset, however due to zoning, those lots afford significantly less ground cover, about 1000 sq ft less (a 2000 sq ft difference in a 2 story house), which limits the size of the house (or house and cottage) you can build. Also the 2 recent sales on this street, in addition to another price reduction point to possibly the only neighborhood on the island with declining values. There are also lots on Aurora Ln that might barely touch the $2m mark, but have numerous restrictions well beyond town zoning that make them less attractive than 2 Camelia, in addition to higher prices.
2 Camelia Lane is located in the Historic District, which allows for 50% ground cover (how much of the lot you can cover with buildings, here it is 2550 sq ft), zero front setback, and 5 foot rear and side setbacks. This ROH (Residential Old Historic) zoning gives 2 Camelia a distinct advantage over many other lots, including some priced significantly higher.
How much of a difference can this make? Compared with R1 zoning (which there is a lot of), which is the same 5,000 sq ft min lot size but only 30% allowable ground cover, this 20%, or 1000 sq ft difference in ground cover (on a 5,000 sq ft lot) can mean a 2000 sq ft difference on a 2 story house, or about 2700 sq ft if the basement is finished (saving 300 sq ft for furnace, etc), or a 3200 sq ft difference if you finish 4 levels (3rd floors are typically counted at about 1/2 of a first or second floor because they only count space that is 5 feet or more from the floor to ceiling). Thats up to a 3200 sq ft bigger house (or house and cottage combo) than a similarly sized R1 lot like 16 West York Ln.
2 Camelia Lane is located in the Historic District, which allows for 50% ground cover (how much of the lot you can cover with buildings, here it is 2550 sq ft), zero front setback, and 5 foot rear and side setbacks. This ROH (Residential Old Historic) zoning gives 2 Camelia a distinct advantage over many other lots, including some priced significantly higher.
How much of a difference can this make? Compared with R1 zoning (which there is a lot of), which is the same 5,000 sq ft min lot size but only 30% allowable ground cover, this 20%, or 1000 sq ft difference in ground cover (on a 5,000 sq ft lot) can mean a 2000 sq ft difference on a 2 story house, or about 2700 sq ft if the basement is finished (saving 300 sq ft for furnace, etc), or a 3200 sq ft difference if you finish 4 levels (3rd floors are typically counted at about 1/2 of a first or second floor because they only count space that is 5 feet or more from the floor to ceiling). Thats up to a 3200 sq ft bigger house (or house and cottage combo) than a similarly sized R1 lot like 16 West York Ln.
In other words, an ROH lot has a 66% bigger allowable ground cover than a comparable R1 lot.
How does this compare with other lots on the market? Below is a list of properties with smaller (or same) allowable ground cover (GC) but are priced higher than 2 Camelia.
Address Size GC (sq ft) Price
14 Aurora Ln 8910 2000(cov limit) $795K
20 Sparks(comm) 5007 2503 $795K
15 Aurora Ln 13,184 2000(cov limit) $895K
2 Red Mill Ln 7874 2243 $899K
2 Seven Mile (Scon) .5ac 2500 $925K
8 Nonantum (+septic) .3ac 1500 (limit 2br) $955K
18 Mt Vernon St 5070 2535 $980K
33A New St (Scon) 5600 1680 $995K
33B New St (Scon) 5692 1708 $995K
5 Hawks Cir TomNvrs .46ac 2505 $1.195M
139 Polpis (+septic) 1.22ac 1594 $1.199M
2 Winn St 8276 2483 $1.395M
36 Wigwam Rd 1.16ac 1516 $1.395M
10 Plainfield (Scon) .5ac 2500 $1.395M
20 Walsh(sold for lot) 6098 1829 $1.96M
As you can see, you can spend a lot more and not be able to build as big of a house that you can on 2 Camelia. Even if you dont "max it out", that allowable ground cover will always have value. You can also see that the farther you get out of Town, the larger the lots usually get. If its land area you are after, you likely wont be buying in Town. If you want a lot of yard AND a lot of house, just bring a lot of money. Life is simple like that :)
The only lots priced less than 2 Camelia that have more available ground cover are some of the RC-2 (residential/commercial) lots out by the airport which are simply not the same market as 2 Camelia.
For the final value potential of this lot, my estimate is $2.25M, which is 90% of an asking price of $2.495M (latest avg sale is 95% of ask, which would be $2.37M). This would make 2 Camelia's $749,000 asking price 30.0% of the completed home's asking price and 33.2% of a probable selling price. Its entirely possible you could "build up" the neighborhood a bit and get more, but that is up to you. I've seen it work in Surfside 2 years ago and set off an appreciation and building boom in that area. The people who renovated nearby 1 Gardner Perry Ln sure thought so with their $4.595M asking price and $20-24,000 rental (rental appears booked!). Altogether I am quite comfortable with my $2.25M number and think its a very reasonable assumption. I have always tried to err on the conservative side when coming up with this number and tend to be generous when evaluating other neighborhood's potential values. This puts a finished 2 Camelia Lane in the $2.0-2.5M segment which has the least inventory to time of any price segment on Nantucket other than the scant under $1M segment.
One thing people ask about often is what the assessed value is. The "new" 2016 assessment is $646K, making this lot 116% of assessed. The average of 45 second home lots sold in the last 9 months is 136%.
The 2016 assessment is derived from the supposed value at Jan 1 2015. This is derived from sales from calendar year 2014. In other words the 2016 assessment is made up of sales from between 1 and 2 years ago.
One thing people ask about often is what the assessed value is. The "new" 2016 assessment is $646K, making this lot 116% of assessed. The average of 45 second home lots sold in the last 9 months is 136%.
The 2016 assessment is derived from the supposed value at Jan 1 2015. This is derived from sales from calendar year 2014. In other words the 2016 assessment is made up of sales from between 1 and 2 years ago.
The latest image of Nantucket on Google Earth is May 23rd, 2015. I "flew" around the island and counted 149 construction sites. In the last year (or so) there have only been about 67 land sales that would generate a property worth $1.2 million-ish or more, those geared to the 2nd home market. It doesnt take a genius to see the coming land crunch. Its not that there isnt going to be enough land in 5 years, there isnt going to be enough land NEXT year. There isnt enough NOW.
In fact, the closer you look at the market, the more glaring the land shortage becomes. If you take out the lower priced lots out by the airport, and the few covenant lots, and just count the lots that will be relevant in the 2nd home market (also taking out duplicate listings, commercial and Tuckernuck), there are really only 85 total lots on the market as of 9/3/16 that you may be considering. However, 80% (68) of them are over $1m.
Of interesting note is the recent listing of 37 lots (these are included in the 68 over $1M) all at once out in Sconset on Cannonbury Lane for $1.55M each which represents 43.5% of the lots on the market. It will be quite some time before these are all sold and you have a prayer of any appreciation (like forever). The land assessments are all a very similar $1.275M for all the lots and $2.34M average for lots with houses. This gives a 54.4% assessed land to assessed value ratio which makes it seem like these land assessments are quite high to me. I've seem a lot of land assessments being around 40% of average neighborhood values, which would lead to an assessed value of 936K for these lots. Applying the recent 128% of assessed in recent sales (for houses) gives this neighborhood a probable $2.995M average sales potential, so a 51.7% land to value on a selling price basis vs adjusted potential value (2 Camelia's ratio on a selling price basis is 33.2%). If these were priced at the same land cost to final value as 2 Camelia, these lots would have an asking price of $995,000. If there was only one or two lots for sale, $1.55M would still be high. The fact they are "dumping" (I use quotes because dumping usually suggests some sort of discount!) all 37 at once makes the $1.55M extremely expensive. Having all 37 on the market all at once I dont expect them to start moving until they are discounted by at least 50%. We might see some developer make a deal for all 37, but I wouldnt pay more than $500K each (thats still $18.5M, a pretty big investment before breaking ground on house #1) for them in a sale such as that so as to allow selling the completed homes at a lower price because unless you have a really long time horizon, you are going to have lots of competition on this street....namely YOU for a very long time. Otherwise I hope the buyer is really young. Unless you can buy them all (and for a screaming deal), you will be stuck with lots for sale next door to your project...forever. It must be some kind of estate settlement as this is a completely terrible way of doing this. I dont see this as affecting the Nantucket land market balance as they are both "way out there" in Sconset near Low Beach, and also "way out there" as far as price.
Update 8/16/16: Its not surprising to see an new listing at #24 Cannonbury for $3.295M, which puts a 90% offer at $2.965M, right at the going rate of 128% of assessed value average for homes on this street (funny how that works!). So, properly priced...if you dont know about those 37 neighboring lots for sale.
I also just noticed the last lot sale in this neighborhood was 7 Westerwick Dr for $700,000 in 2015 after being on the market since 2011.
If we dont even count these 37 lots, there are just 49 lots (incl 2 Camelia) on the market with 31 of them, or 63.2% over $1M.
This leaves:
7 lots $900K-1.0M (3@995K)
3 lots $800-900K (all three are 895-899K)
3 lots $700-800K (incl 2 Camelia, other 2 are 795K)
2 lots 600-700 $625K 2 Cato + $669K 9 Hydrangea
3 lots in the $500-600K range
There are only 5 lots available that are less expensive than 2 Camelia and 43 lots that are more expensive (not incl the 37 Cannonbury lots) that are geared towards residential, and only 1 of those less expensive lots barely makes a $2M final value neighborhood (9 Hydrangea Ln in Sconset for $719K (just reduced to $669K) but the last lot sale on this street was $640K and home sale $1.67M, these lots also afford 1000 sq ft less ground cover).
So, if you are looking for land in the 6-800K range, you only have 5 choices. If you are willing to spend up to 900K you now have 3 more, now 8 choices. Spending up to $1M gets you 7 more. 149 projects going on last May (2015), 49 lots on the market with 31 of them over $1m . Get the picture?
I have had a few people do "drive bys" on Pleasant St but didnt go in and actually look at the lot because it "looked too private in there". Thats one of the attributes of it. You have to actually go in there. There are some 11x17 plot plans in the old shed (which is only "Nantucket locked"). Incidentally, in 21 years on Nantucket, if my car keys werent in the center console, I was completely lost as to where they might be (you dont want to do this at the Chicken Box on Saturday night though, it might get "borrowed", but DO go to the Chicken Box, they have some great musical acts!).
VISION. This is where people make $$$$$$$ on Nantucket! If you dont have it, someone else makes the profit! To buy land and build a home takes vision, which I have learned not everyone has. You have to be able to envision a beautiful house with a nice hedged in landscaped yard, which an architect can help you with. If you are looking at the lot (or any property on Nantucket) during the winter, you need to be able to imagine everything GREEN. There is a world of difference between January and June on Nantucket. They dont call Nantucket the "Grey Lady" because of how it looks in July and August. The reward for that vision is the equity you reap. If you are impatient and want to write a check and walk in the door, thats fine too but you dont get that equity reward, the spec builder (or house flipper) does. To get an idea of the difference hedges make, take a peek next door at 78 Pleasant, very nice in there. 78 Pleasant was designed by Milton Rowland, in case you like the look of it (I do!). A piece of trivia, Nantucket is the largest consumer of privet hedge bushes in the eastern United States.
But Wait! There's more!
An added bonus of building vs buying a completed home is you dont pay the 2% land bank fee on either the cost of the building, nor the equity you gain, just the land. This all depends on what you build, and how much it sells for (or is worth), but it could be in the $30,000 range here. Thats not enough for a boat slip on Old North Wharf ($4.75M), but its enough for a salad with extra lettuce at the Club Car! All kidding aside, this savings alone could buy you your "Nantucket Car" (fully restored Grand Wagoneer perhaps?) so that once you are all settled with the house you dont have to float the Steamship Authority's annual budget anymore. Just fly in and everything is here. Even if you are flying private, it doesnt seem as expensive when you consider you arent paying the $500 per round trip for the car on the boat. So you get a $30,000 "ACK Car allowance" plus you save $500 on Ferry costs each trip.
If you live near NY (White Plains) I've seen a small plane charter that is $495 for the whole plane (3 seats) and $798 on Tradewinds ($398 if you are going "backwards"). No going through all the fun at LaGuardia which is all torn up causing check=in lines to stretch down the street, or JFK, no 4-5 hours driving up I-95, no dealing with cape traffic or the boat, hop on the plane and in 1 hour you're on ACK! Not bad! Flying private from the Boston area (Bedford (BED), Norwood(OWD), Lawrence (LWM), etc) area typically takes about 30-40 minutes. Marshfield (GHG) 20-30 minutes. The trending cost (getting lower) vs value (higher every day not having to deal with TSA and crowds) equation has become increasingly attractive in recent years. Its no wonder private air travel is booming. Relieving all that travel stress will make your Nantucket escape all the more replenishing.
Building costs vary greatly by level of construction. Obviously they will be higher than in "America" but the house will be worth more when it is completed. If it wasnt worth it, the island wouldnt be the beehive of activity it is. If a builder wont get out of bed for less than $750/sq ft, shop around. As you will see below, 1 Long Pond sold for $445/sq ft, which presumably included some level of profit. I've seen other examples in this price range (and lower, see below). This makes me think some houses are being built in the low-mid 300's per sq ft range. Of course, they are also being built for much more. I'm not a contractor and levels of construction are infinitely variable. That $750/ft guy might be worth every penny, but maybe you dont need that fancy of a house. This doesnt mean you cant have a nice house, its just that on an island with 32 properties for sale over $10M you have some pretty amazing (and very expensive to build) places. I worked on a house that cost over $1000 per sq ft, and just the electrical was over $440,000, an amazing place! It was post and beam and ALL wood! There are some amazing craftsmen on the island. Thats something you will have to decide. You can gold plate everything like Donald Trump if you want. I know a builder who may have availability and could probably answer some of your questions. Fall and winter is the time to ask, not in late June when everyone is scrambling to complete their winter projects before the 4th of July do or die deadline.
The least expensive option is a modular. Huntington Homes in VT (see https://huntingtonhomesvt.com/) has sold hundreds of homes on Nantucket. As you will see below, there are examples for sale in the $300/sq ft range. Build quality is good (these are NOT your Grandpa's double-wides!), finish quality is lower, but final cost is also lower (you get what you pay for!), and completion time is shorter. I looked into putting one on this lot a few years back. One caveat about modulars is there is more work to be done on site after delivery than many people realize. While they are still quicker, (one day there is a foundation, the next day you drive by and there is a house...before noon!), there is still a lot of work to be done (all basement heating and plumbing, tying all the wiring together, finishing the seams, shingling, etc). Also with modulars, you are not allowed to be your own general contractor (unless you have your contractor's license, of course). This is a Massachusetts state law enacted to protect consumers against shoddy modular companies. Modulars have come a long way in the last 30 years though and Huntington has a good reputation on the island.
Having worked on some, I can tell its a modular if I'm in the basement (the seam), or because of some of the usual interior trim (railings, kitchen, etc). But once its done, its difficult to tell from the outside. You can ask some real estate agents as to how it being a modular affects resale value, but I've heard its not as significant as many think. The main thing is the quality of interior details, kitchen cabinets and counters, bath fixtures, etc. If that is upgraded (done on island), I've heard the value difference can be indistinguishable. Obviously that will add to the cost and whether that added expense balances out vs stick built is something you have to research, but a modular is something you might want to consider. I'm not affiliated with the company, its just that they have done the vast majority of modulars on Nantucket over the last 20+ years, at one point Nantucket being 2/3rds of their business, they know Nantucket very well. You might get a bit more scrutiny doing a modular in the historic district (upgrading to "true divided light" windows, for instance), but bottom line if it looks appropriate, it looks appropriate.
The $2.0-$2.5 million slot, which a finished 2 Camelia Ln would likely fit into (I would put the ask at $2.495M for a nice house here), has the least amount of inventory, at about 7.5 months. In Oct I figured the different price groups based on current inventory and sales the past 12 months, they are as follows (this is houses, not land, to give you an idea of how fast a finished home might sell):
$1.0-$1.5 - 11.5 months
$1.5-$2.0 - 10.8 months
$2.0-$2.5 - 7.4 months
$2.5-$3.0 - 11 months
$3.0-$3.5 - 20 months
$3.5-$4.0 - 25.5 months
$4.0-$4.5 - 15.2 months
$4.5-$5.0 - 21.3 months
$5.0-$5.5 - 12 months
$5.5-$6.0 - 32 months
$6.0-$7.0 - 17 months
$7.0-$8.0 - 24 months
As you can see, the busy $3 million-$6 million spec driven market is getting a bit crowded, while the $2.0-$2.5m is the sweet spot. I see a pretty good pattern that if you are doing a spec house in the upper range, do it in the lower 1/2 of whatever million you are targeting (nearly all listings are crammed at the upper limit of whatever million range they are in), it looks like it will sell in about 1/2 the time. I also saw a lot of projects in the last year's worth of HDC agendas that indicate the pipeline for these higher end types of homes is quite active, while the number of projects in the lower (1.5-2.5 Million) look weak when compared to the number of sales in the last year. If demand remains as it is, I can see upward price pressure in the sub $3M market as inventory dwindles, its already happening in the very scant under $1M market.
I'll probably do this again in July (a quick look 6/28 shows 31 months of inventory for all price ranges $3m and up) and see how the market looks but it doesnt make sense to do it in winter months because many listings expire and dont get relisted until later in the spring, leaving a "winter hole" that wouldnt present an accurate view of the market. I'll probably also do it again in Oct to get a year over year comparison whether or not I still own this because I'm such a nerd.
The next lot in town under ROH zoning presently for sale is at 7 Gardner St (portion) and is less than 1/2 the size of 2 Camelia, but is $201,000 more. I think once you see whats available, you will agree that 2 Camelia Ln represents good value when it comes to an increasingly scarce commodity, land in Nantucket "Town" (or anywhere on the island for that matter).
The only other lots under ROH zoning are the similarly sized (about 100sq ft smaller) lots on the busy corner of Easton and North beach St, at $1.2m and $1.3m (67 and 65 Easton St, respectively). This area is low and frequently floods during winter storms, which would make a full basement difficult (but an indoor swimming pool at high tide easy!). The listings for these lots expired and as of 6/28/16 they have not returned to market. Update 7/20/16 I have seen HDC agendas that mention a house on one of these lots. Since they have not sold, it appears either the owner is preparing to build or add the approved plans to the lot offering. I'd guess they are going to build based on the fact that I only saw plans for one of the lots.
An interesting nearby listing this spring is at 1 Gardner Perry Lane, an "L" (or flag) shaped lot located about 300 feet to the northwest of 2 Camelia. This used to belong to the Artist's Association. They held functions and art classes, etc here (it was a function/classroom space, not a house). They sold it for $845,000 on 12/20/13. The new owners have renovated the existing structure into a house, built a small cottage and added a pool. The striking thing about this is the price, $4,595,000! Looking at the documents, it totals about 2500 sq ft ground cover. In other words, you could build all those buildings on 2 Camelia. They are also renting it by the week in the summer, for only $20,500 ($24,500 in August, VRBO #690746). Several homes in the neighborhood rent from $5000-$6500/week...which would pay for about $1m worth of mortgage. A much higher than usual sale (or rental) in a neighborhood like this can give it a boost, as it gives legitimacy to higher prices, it says "thats possible here" and sometimes is a catalyst for significant neighborhood appreciation (this recently happened in Surfside, sorry too late to get in before the rush there). It will be interesting to see what happens with this listing, whoever did this is clearly bullish on this neighborhood. This listing has also expired but they are still marketing the rental, which appears booked. Listings like this frequently come back in the fall once all the rentals are complete. I dont know how you can simultaneously rent a property and have it for sale, telling a $24,000/week tenant to get out for a showing.
I go on about the "1 minute to the grocery store" thing, but think about it, how many times in a summer do you go grocery shopping, or any other business mid island? I didnt realize it until I worked on houses on the cliff side of town and had to go to the supply store on Old South Rd (kiss an hour goodbye) just how convenient being on the other side of Main St is, you skip all the New Lane/Quaker Rd/Prospect St/High School intersection traffic. Prices on this side of town are also about 1/2 of the cost of being on the "Cliff". This "south side of Town" benefit is only gaining in value with all the new construction on the cliff in the past 3 years, creating yet more traffic on the Quaker/Prospect thruway (PARKway is more like it in July and August).
If its just a gallon of milk you are after, its just a short walk down Back St and over to Cumberland Farms (which they are going to be rebuilding).
Assessments (New 2016 vs old):
Since many people compare prices with assessed value, it becomes important to know what you are looking at. "Old" (2015) sales of land compared to assessed value has been 149%. Using the old assessment for 2 Camelia ($554K) and the old 149% sale to assessed ratio would yield a price of $825,000. The new assessment (2016) is $646K and recent (YTD 2016) land sales have been 136% of assessed, which would yield a price of $878K for 2 Camelia. An asking price of $975,000 for this lot and a 90% offer would produce a sale of $878,000, right at the 136% of assessed average of the 43 lots sold over the last 9 months. 2 Camelia is priced at only 115.9% of assessed, which makes it $129K lower than recent average sales vs assessment would indicate. It is already at a 14.7% discount to market.
Make sure you know which assessment is being used in a listing, I've seen various combination of new and old in recent listings, although this is less common as time goes on. Also keep in mind that sales as a % of assessment will likely look to be less this year than last. This is NOT because of a weak market, it is because assessments rose (about 15% across the board, 2 Camelia rose 16.6%). Also the new assessment (2016) is based on the supposed value at Jan 1, 2015. This means using sales during the calendar year 2014! Thats like forever ago! So its already more than a year behind and is why assessments typically run behind current sales. If you go around making offers at assessed value you will not likely ever buy anything, its not 2009 anymore.
Sale to Assessed is a handy statistic to get a general feeling about how things are selling compared with assessments. HOWEVER with land you have to watch out for new lots that dont yet have a town assessment but are counted as sold at 100% of assessment on some (all) real estate agency's web sites. Since nearly all sales are actually above assessed (or what assessed will be), the actual present day sales prices of many of these new lots are above where the assessment would have been had these lots existed when the last assessment took place. In other words they would have been counted at more than 100%, so these "100% lots" are bringing the reported "sales to assessed" statistic down on land.
This is not reality. There is one site with a plain old clerical error reporting a lot sold at 39% of assessed when it was actually 152%. So if you look at some real estate sites you will notice the "sale to assessed" of land is lower than that of houses when its actually higher (136% vs 128%). What you really have to do is look at each lot, or type of lots, on their own merits. A new subdivision in an area of differing properties can be difficult to gauge, but if you use the "land cost to likely value" metric you can get a better idea of valuation. I suppose I'll just have to do my own analysis to get a clearer picture of the real "sales to assessed" for land....sigh.
Ok...here are the results. After looking at the last 9 months of land sales geared toward 2nd homes, not including the industrial lots out at the airport (although they are running about the same), the average sale to assessed for the 43 lots sold is 135.9%. There were only 3 lots I had to come up with an assessment for and they were pretty easy with comparable lots with assessments nearby. If I'm off by a little it wont skew the results much. Most lots that didnt have an assessment listed on realtor's web sites (and thus were counted as 100%) actually did have assessments, I just had to look them up. Anyway 135.9% of 2 Camelia's assessment of 646K is $877,914, or $128,914 higher than the present asking price.
Lots sold after I did this analysis include:
10 Weymouth (portion), $700,000, or 167% of a very likely assessment.
12 Scott's Way, $725,000, or 137% of assessment.
49 Hummock Pond/Hawthorne lane junk yard sold for $3.975M, or 135.4% of total assessments
6 N Cliff way, $3.112M, or 142%
3 Mary Ann Dr $365,000, or 150% (out by the airport)
Reminder: 2 Camelia Ln is priced at 116% of assessed.
Land cost vs likely final value is another way of comparing the cost of land to the "likely maximum value". Each neighborhood generally has a value range. Every lot in every area is not the same, but if you are comparing similar properties, this can give you an idea as to land values relative to their peers. Sometimes there are huge differences in value just a few hundred feet apart, or sometimes even adjoining if the zoning is different. Its just one of many comparative tools. Using the recent sales of 78 Pleasant and 13 Kimberly (which have R1 zoning, or only 30% ground cover), the land cost vs potential selling value of developed 2 Camelia Ln ($2.25M) would be 33.2%, which is lower than every single lot listed for sale below.
I am using a likely final value of $2.25M for 2 Camelia based on the sales of 78 Pleasant St and 13 Kimberly way. While these are very close by (78 Pleasant borders 2 Camelia) there is now a time factor, the 78 Pleasant sale was 18 months ago as of June, and the 13 Kimberly sale is now 2 1/2 years old. If anything, these homes would sell for more now than they did then. They certainly wouldnt sell for less, so I think it translates into a very reasonable estimate for the potential selling price of 2 Camelia Ln.
I got a number of questions on this, so I'll attempt to clarify. This 33.2% of "final value" I use here is 33.2% of a likely SELLING price. It is a way to gauge the land cost compared to the total final value once the house is completed. I would ask $2.495M for a nice ~2000-2500 sq ft house built here (there are 10 $2.5M houses on the market with an average sq footage of 2591 sq ft and avg 3.5 br and 3.2 ba). So if you see a new house come to market and can see the lot sold for 30% of the asking price of the house, that is in line with my asking price for the lot vs completed home asking price. The 33.2% figure I'm using is the price of the lot being 33.2% of the probable actual selling price of $2.25M for the house, which is based on a 90% offer from a $2.495M ask (78 Pleasant asking price was $2.35M, so it sold for 90.4% of ask). Recent sales have been about 95% of ask (which would equate to a $2.37M selling price from a $2.495M ask). At 78 Pleasant they also probably spent at least another $100K in finishing the basement (cutting holes in the foundation for egress windows, etc) along with other improvements after they bought it (it was a crew of guys there for months with a trailer, porta potty, using the lot next door for staging and parking, not a 2 week quickie paint job). in other words they were comfortable putting more into it than just the sale price. So I think its quite reasonable in setting a $2.25M final value selling price potential for 2 Camelia Lane (for a single house, a house and cottage combo might sell for more).
A few lots that have sold at a higher ratio are:
- 10 Weymouth St (portion) just (June 2016) sold for 41.1% of what the house next door just (same week) sold for.
-16 Ellens way lot sold for 44.69 % of the house at #12 sold for. This is a very apples to apples neighborhood with very similar lots and homes, probably the closest you will get to "cookie cutter" on Nantucket (they are nice cookies though!).
-21 Nanachumacke Ln sold for 60% of the average assessment of the 11 homes on the street. Since recent sales of homes have recently traded at 128% of assessed, this makes this sale 47.1% of probable actual street value.
-11R Union sold for 44% of its probable max value of $2.5M due to its mere 2278 sq ft lot size and using a nearly a dozen recent sales on the street as a guide.
-5 Long pond sold for 42.7% of what the house at 1 Long Pond just sold for.
-17 Deer Run sold for $1.275M in Aug 2015 which is 56.9% of the sale price of $2.24M the house at 18 Deer Run sold for in June 2016. These two lots are identical and the house was nice.
The average of the 6 examples above is 46.08% which would translate into a $1,036,800 selling price for 2 Camelia if this average were applied to a $2.25M final sale price at 2 Camelia Ln.
Distance measurements were made using Google Earth. Its pretty addicting, so dont say I didnt warn you (how far is it from the house you are in now to the house you grew up in?). (Click "tools" then "ruler", and select "path" if you are measuring anything thats not a straight line). I use it on a desktop, there is also an app for phones. The walking distance I measured from 2 Camelia to the Hub on Main St is 3864 feet, or 0.73 miles (14.5 min at 3 mph). Driving distance, because of one way streets, is 4584 ft, or 0.86 miles. If you are looking at real estate, I cant begin to tell you how handy Google Earth is!
As this started, it was mostly comps in the "in town" area since most of the people interested in this property have been looking for an in town location, but this has branched out since there is hardly any land in Town at all thats available. There are other lots in all areas of the island and I encourage you to look at those too because I believe 2 Camelia Lane compares well against those as well. Obviously if you are looking for 4 acres on the ocean, this isnt it, but if you are looking in Town, or are open to location, I think this represents a very competitive offering. Generally speaking you will get more land area per dollar the farther away from Town you get. Always check permissible ground cover, wetlands setbacks (Not a factor here), neighborhood values and comparable values. If the lot needs septic and a well, figure $30,000-35,000 more than town connection fees (Although water and town sewer lines are stubbed to the lot at 2 Camelia, you will still have connection fees, however they are MUCH less than installing a Title 5 septic and digging a well).
Other Lots For Sale
10 York St $895,000
This lot is listed on and off on Zillow by an off island broker that doesnt even have it on their own web site. So if you havent seen this on any Nantucket agency's web site, or in the LINK system, this is why. The adjacent lots have very close buildings on 3 sides, and York St on the 4th. It advertises being on a quiet street, but if anyone knows Nantucket, York St is one of the busiest cut thru streets on the island. Your driveway will also empty directly onto York St. If you go up York towards 5 Corners from Orange St, its on the left and looks like a small side yard. It is legal size, but has a very closed in feeling, go see for yourself. Recent sales on this part of York St have been solidly in the $ 1.3 million range, 20 York sold for $1.255m on 6/4/13 and 22 York sold for $1.275m on 1/14/15. 30 York sold in Oct 2015 for $1,295,000, and 26 York is presently for sale for $1.279m (update: under agreement 6/16/16). In other words 10 York's asking price is an extremely high 68.8% of a very well demonstrated neighborhood value. If this was priced the same as 2 Camelia's 33.2% land to final value, the asking price for this lot would be $432,755 (although the assessment is $640K, quite high in my opinion). Come to think of it, this means the assessor thinks this lot is worth 49.3% of the average street value, which would translate into $1.107M for 2 Camelia. 2 Camelia would be priced at $1,548,000 if it were priced at 58.8% of likely final value like this lot is. Y'all are welcome to write me a check for that! :)
86 Hummock Pond Rd $598K
Originally this lot was listed on Zillow by an off island broker whose website doesnt work and who's only listing was this listing on Zillow. It is now listed by an on island broker. The Zillow ad shows a proposed outline for a house, but beware this lot is listed on the Town's online "Property Record Card" as unbuildable with a scant $140,000 assessment. The listing says Town water and sewer "but not connected". Only recently did they add "Located in town water and sewer district, but not connected (awaiting infrastructure)" to the description. "Awaiting infrastructure" means it is indeed unbuildable until the sewer is extended. Being in the sewer district means nothing if the pipe aint there. You would need to contact the town to find out when (or IF) they plan on extending the sewer main to this address. This lot is NOT BUILDABLE until that happens. Water and sewer are stubbed to the lot at 2 Camelia, no need or expense to dig up Pleasant St. I'd put a potential final value of approximately $1.3M (if it was buildable) due to the location and wetlands limiting building envelope (so a 46% land to final value ratio at the current asking price (was 52.4% before recently being reduced). It doesnt matter what the zoning is here, the wetlands will severely limit what you can do. The listing says 1400 sq ft maximum available buildable envelope, so if you built a 2 story 2400 sq ft (full basement is doubtful here) modular for $275/sq ft your total investment would be $1.342M, so no profit or equity here. Its a 3 acre lot, but because of wetlands (which is nearly all of that 3 acres) there is a VERY small area where you can build...or even have a yard. Also depending on how wet the surrounding 3 acres are, this could be a mosquito haven in the summer. Also there is also a bit of a junk yard (which is licensed) as you neighbor to the rear (look on Google Earth, it is indispensable I'm tellin ya!), and also less than 1000 feet from this lot is a former junk yard where Pumpkin Pond Farm is now. This means you also want to make sure town water is available as well as sewer. To me this lot is unsellable at any price until the sewer line is extended and Town water availability is verified. This is not at all priced at a "wait and see till the sewer line is extended" kind of price (at the assessment it might be), it is priced high even if it was buildable today.
Aurora Lane Lots
This neighborhood is located on the other side of the junk yard you would see from the rear of 86 Hummock Pond Rd above. This is not the junk yard 1/4 mile away at 49 Hummock Pond that just sold for $3.975M, or the previous junk yard 1/3rd of a mile away that is now Pumpkin Pond Farm, it is the junk yard 250 feet out your back window from the lot at #15. #14 and #15 Aurora Way are on the market for $795,000 and $895,000 respectively. There are also 2 houses on this street for sale. #12 is on the market for $1.895M (under agreement as of 7/21/16) and is 2512 sq ft built in 2005. #11 is a brand new house for $1.995M. Aurora Way has covenants that limit you to one dwelling, a 1 car garage, and a max 2000 sq ft ground cover (regardless of the "50%" allowable one of the listings is telling you), 23 feet max height (instead of the usual 30 feet) for the house and 19 feet for the garage (400 sq ft ground cover limit for the garage). The listing for #11 first uses studio/garage, but then uses the word "cottage", which, if it goes by the covenants, cant be a dwelling When I think of the word cottage, I think small, but fully equipped kitchen, or in other words...dwelling. Anyway, the least expensive lot compared to the most expensive house asking price yields a 39.8% land to value ratio (the lowest ratio combo you can make). The 895K lot vs the 1.85M house is 48.3%(the highest combo you can make), so these lots are between 39.8% and 48.3% of final value compared with 2 Camelia's 33.2%.
Considering the prices and all the restrictions well beyond Town zoning, I think 2 Camelia compares VERY well against this development.
16 West York Lane $595,000
This nearby lot is what I find most people compare 2 Camelia Lane with, but it is in R1 zoning limiting you to an approximate 1584 sq ft footprint. Compare this with 2 Camelia Lane's 2550 sq ft max footprint. This gives 2 Camelia Ln a 61% larger footprint advantage.
Also, neighborhood values are in the $1.2-1.3M range. #9 just sold (Feb 2016) for $908,500 in an off-market transaction (off market home transactions are frequently in-family sales, so they may be lower than average). Here the land cost to final value ($1.3m) is 45.7%. If you are looking at the land cost per buildable sq ft, 2 Camelia is $294 and this lot is $348. In order for this lot to equal the 33.2% land to value ratio that 2 Camelia represents, the price would have to be $431,600 (although assessment is 525K, which kind of says the assessor is thinking this 40% land to value ratio is appropriate, which if applied to 2 Camelia would make it worth $908,653). Also if 2 Camelia were priced at this ratio of 45.7% it would be $1,028,250. So when comparing it to 2 Camelia if you consider the difference in zoning (up to 3100 sq ft more house and cottage) and the $1M difference in neighborhood potential value, more private location, is 2 Camelia worth $154,000 more than 16 West York Ln? Yes! I think it is! Very much so since you are getting that extra $1M in final value potential for only 15% land cost.
7 Gardner St (portion) $950,000
Update! 9/1/16 both the house and lot are under contract.
This 2396 sq ft spin-off of 7 Gardner is closer to downtown, but is less than 1/2 the size of 2 Camelia Ln, thus your allowable footprint (ground cover) is also less than 1/2. Your land cost per sq ft of allowable ground cover is $808 here vs 2 Camelia's $293. This street is very busy during the summer and your front door will be just feet from it. It is also very narrow with cars driving up on the sidewalk to pass each other making some of the traffic like one foot from your front stoop. It is close to town (1677 feet to the Hub), so it gets some points for that.
Also if you compare the $1.995M asking price of the original antique house next door to the price of the subdivided lot, you get a 47.6% land to probable value ratio (applying this ratio to a $2.25M sale on 2 Camelia would yield a $1.071M land price). A $2.86M sale would be required on this lot in order for the $950K land cost to equal 33.2% like 2 Camelia.
10 Weymouth St (Portion) $890,000
Update! Sold! $700,000. 167% of estimated assessed value (using the average per sq ft assessments of the other 3 undersized lots on this street), or 41.1% of probable potential value (using the house this was split off from which also sold for $1.7M this week 6/15/16), and $243.31 per sq ft (2 Camelia is $146.77). It has 1111 sq ft less allowable ground cover than 2 Camelia, which could translate into more than 3000 fewer sq ft of potential living space. 2 Camelia is 2226 sq ft, or 77%, bigger. In other words those 3,000 sq ft of extra living space would have only cost them $16.66 per sq ft land cost had they paid the extra $50,000 for 2 Camelia.
This 2877 sq ft spinn-off of 10 Weymouth St is also closer to downtown, but like the 7 Gardner lot above, is limited in its allowable ground cover. Their ground cover cost is $486 per sq ft before you start building (if you max it out, which is more likely on a 1/2 sized lot). Recent sales on this group of streets have been in the $1.5m range. For a recent comp, #11 Weymouth across the street sold in Feb 2016 for $1.485m This lot is also undersized at 3315 sq ft, so similar to the spun off lot at #10. If 10 Weymouth were priced at the same 33.2% of likely final value that 2 Camelia is (using a $1.7M likely final value gleaned from the new more recent sale next door), the price for this lot would have been $564K. This sold for 41.1% of probable sales value, which would translate to $926,000 if applied to 2 Camelia.
5 Joy St $1,495,000
This lot is larger, but so is the price! If allowable footprint is important to you, this lot affords you 3391 sq ft, or 841 sq ft more than 2 Camelia Ln. But you will pay $887 per sq ft for every one of those extra sq feet of buildable area. Total cost per buildable sq ft is $441 here vs 2 Camelia's $293. It is a 873 foot shorter walk to Town, but that will cost you $854 for each foot.
UPDATE! (July 6th) Just listed as a soon to be completed (fall '16) 5br 5+ bath 4250 sq ft home for $3.995M, which is a 37.4% land to value ratio at the ASKING price (which means this ratio will likely be a little higher at the SELLING price--41.5% at a 90% of asking price offer). 37.4% of my estimated selling price of $2.25M for 2 Camelia would be $841,500 (at 41.5% it would be $933,375).
59 Westchester St $1,495,000
*Accepted Offer 5/17/16*** SOLD $1.45M 9/2/16
This 10020 sq ft (.23 ac) lot gives you about twice the space as 2 Camelia for twice the price. You dont get twice the ground cover, however. Under R1 zoning (30% ground cover) the buyer only got 456 sq ft more ground cover (for $1537 per additional sq ft) than 2 Camelia. This sold for $144.71 per sq ft (2 Camelia is $146.77) and $482 per sq ft of buildable ground cover (2 Camelia is $293.55). 59 Westchester is a 267' longer walk to the Hub on Main St than 2 Camelia.
Also for sale is a .36 ac (15,681 sq ft) lot at 65 West Chester St for $2.1M. It is listed with Great Point Properties and they smartly point out on their Facebook page that it has 2 nearby $5M+ (completed home) sales to compare against. This is priced at $133.92 per sq ft of land and $446.40 per sq ft of ground cover.
Nearby (Brooks Farm actually borders both 61 and 65 West Chester) completed home comps are 2 Brooks Farm (.24ac or 10,454 sq ft lot) which sold in May 2016 for $5.225M (#65's $2.1 price equals 39.6% land to value here- which would be $891K if applied to 2 Camelia) and 1 Brooks Farm (.39ac or 16,988 sq ft lot) which sold in Aug 2016 for $5.3M (also a 39.6% land to value so also $891K if applied to 2 Camelia).
If this lot at #65 were priced at the same 33.2% ratio as 2 Camelia, its price would be $1.76M. It will be interesting to see what it ends up selling for. These lots are all on the other side of all the Quaker/Prospect, etc to mid island traffic jams. Despite that, this is a hot area lately, with 4 Pilgrim being sold 2 times in 3 weeks located only about 100 feet away.
If this lot at #65 were priced at the same 33.2% ratio as 2 Camelia, its price would be $1.76M. It will be interesting to see what it ends up selling for. These lots are all on the other side of all the Quaker/Prospect, etc to mid island traffic jams. Despite that, this is a hot area lately, with 4 Pilgrim being sold 2 times in 3 weeks located only about 100 feet away.
A new listing at 61 West Chester just came on the market (8/26) for $3.565M (181% of assessed). It is a 3125 sq ft 3 bed 3 ba cape on a 12,632 sq ft lot built in 1992 and renovated in 2015.
A house at #53 Westchester (4br/3.5ba on a smaller 6943 sq ft lot) sold for $2.45 M in Feb 2016, right at the $2.5M assessment. They could probably make a decent profit now, just 7 months later.
78 Madaket Rd lots $895,000-$1,195,000 (4 lots)
2 of these lots have been sold, lots 2 and 4, which makes now it impossible to buy 2 adjacent lots. Both lots sold the same day for $937,500 each which tells me the buyer is a spec builder, otherwise why not buy 2 adjacent lots?
These lots headed out to Madaket are large, but watch out for wetlands setbacks, which could push your house (and septic system) closer to the road than you might like. Madaket Rd can be busy at times, especially on Sundays as it is the road to the dump, which every landscaping truck, every garbage truck, and every "Take It Or Leave It" shopper takes.
Add $25,000-30,000 for a septic system as this area is not sewered. A walk to the Hub is a 1700 foot longer trek, but you do have the bike path right in front. Be advised though, you also have to cross this bike path every time you enter and leave, so be careful since many bicyclists are "on vacation" if you get my drift. These lots do have nice views to the rear, but it is a large privately owned parcel. While there are no present plans for development (though these lots are owned by the same family as the large parcel, so they are open to selling part of it...), it is not protected and could some day be developed. The protected part they talked about in the listing is across Madaket Rd which was part of Sea Pony Farm which was protected by a Land Council covenant which has now been bought by the Land Bank. Its a nice view...in between the garbage trucks going by :)
Update 8/2/16 I see HDC plans in the making for the 2nd of these lots. Unknown what the plans are for the 2 unsold lots, they are not presently listed, which may have been a contingency in the sale of the first 2 lots.
The first house (to be completed by Jan 2017) just came on the market (8/26) for $5.295M. I can see why they bought separated lots. The aerial picture shows the house and a bunch of room to either side. The thing is, that bunch of room to either side is other lots, and is not included in your $5.295M and at some point will mean banging hammers on both sides of you. The spec market seems to think there is an unlimited supply of people with $5M burning a hole in their pocket, and so far they arent crazy.
5 Pilgrim Rd lots $795,000 ea.
Update! Nov 2015 all 5 lots sold in 1 transaction for $3.6 Million.
Update again! 9/1/16 the 2 front lots have been listed as one subdividable lot for $2.495M. This leaves the back 3 lots which can now only be 2, which the owner could probably market for $3M, which means a probable total take of $5M from a $3.6M investment less than a year ago. Compare this with the $2.05M sale of this whole property on 1/10/14 and there is already $3M in profit in about 2 1/2 years without so much as digging a hole, pretty amazing.
These 5 similarly sized lots might have seemed inexpensive for the cliff side of town (they were listed at 795K each at one time which is why I started following them) but carry R1 zoning which means they each have about 1000 sq ft less ground cover (916-1047 sq feet depending on which lot). The new listing of 2 lots put together (total of 13,078 sq ft) has a combined ground cover of about 3923 sq ft, or 1373 sq ft more ground cover than 2 Camelia but it will cost you $1271 per sq ft because of the $1,746,000 price difference. It is interesting that they are giving enough space to this new lot that it precludes the remaining lot to be divided into 3 lots. In other words they are making this whole property a maximum of 4 lots instead of 5. It is obvious this investor thinks there is more value here in fewer, but larger lots and I agree. But, at $2.495M, it is 47% of the $5.3M final value sales we saw recently on Brooks Farm which is only a few Hundred feet away.
Also a similarly dividable property at 9 Pilgrim Rd has an accepted (5/12/16) offer from a 2.95M ask after being on the market for 15 days Since this is likely being bought for the land, this and the 5 Pilgrim Rd lots, as well as the Pilgrim Ct lots (old Toscana property) signify a significant buildup of this once edge-of-town rural area (that has to all go through the New Lane -Quaker -Prospect -High School traffic gauntlet to get to the mid island area).
4 pilgrim Rd $1,195,000
*Update June 2016 this lot was sold at its asking price*
**Update Update! 17 days later this lot sold again for $1.6M!!! **
This sold for 152% of its $785,300 assessment (which would be $981,920 in the case of 2 Camelia). Then it sold for 203% of assessed 17 days later (which would be $1.316M for 2 Camelia) This is interesting because although it is a little larger than the 5 Pilgrim lots, the zoning is different which makes the allowable footprint the same as the 5 Pilgrim lots (which is 1000 sq ft less than 2 Camelia). It sold for $475,000 more than each of the 5 Pilgrim lots, which are directly across the street. Thats some hefty difference! The second sale is $851,000 more than 2 Camelia's price even though it has 40% lower allowable ground cover. Yikes!
Located right across the street from the 5 Pilgrim Rd lots, 4 Pilgrim Rd is a triangle shaped lot in R2 zoning allows for 1500 sq ft of ground cover, giving 2 Camelia Ln a 1000 sq ft ground cover advantage (2,000 sq ft in a 2 story house, etc, etc)... along with a $446,000 price advantage. Because it is triangle shaped, the 30ft front setback and 10ft side setbacks dictate where your house will be. Like the Pilgrim Rd lots above, you are also stuck in the New Lane/Quaker/Prospect/High School traffic quandry like every other house on the cliff when traveling to the mid island area (Yes! I'm going to mention this every time, and if you buy on this side of town you will be sitting in traffic remembering me droning on about it, then you will wonder why you spent twice as much to be on the "cliff side" of town even though you arent anywhere near the cliff).
Looking at the new listing at nearby 5 Pilgrim Court which is a 2916 sq ft home with a detached garage with total ground cover of 2915 sq ft (1400 sq ft more than is allowed on 4 Pilgrim) on a larger lot priced at $3.495M, I'd put 4 Pilgrim's max price at about $3M only because people love to pay more to sit in traffic on Quaker and Prospect streets and at the High School intersection. At the first sale of $1.195M the land to value ratio is 39.8%. which would translate to $896,250 if applied to a $2.25M sale at 2 Camelia. The 2nd sale of $1.6M would be 53.3% of $3M, which would translate to $1.199M at 2 Camelia. I'm totally sending both these buyers a brochure!
You dont believe me! The pic below was taken July 9 2016 by my lawn guy on Quaker Rd (this is facing toward Main St, the street up on the right is Vestal St). He has 350 feet of backup behind him and 550 feet in front of him (Google Earth again, I'm tellin ya!). This is after getting through the backup at Prospect and Milk St. I lived on Nantucket for 21 years, its like this every summer and gets worse every summer.
Your travel time to Town will be similar from 2 Camelia, but in recent years, fewer and fewer "day to day" businesses are located in Town, and more in the mid island area making it a more important part of the island than in decades past. You can brave the Stop n Shop (locals call it Stop n Rob) downtown, but keep in mind in addition to the downtown parking issue is that all the boats in the Boat Basin use that store. The downtown parking issue also comes into play with the regular businesses that still exist, like the pharmacy and post office, its just easier to do it mid island...if you can get there, that is. 2 Camelia is literally one minute and 10 seconds from the mid island Stop n Rob, or the pharmacy across the street (or Dan's which is even closer). Or its is a 5-10 minute walk, to the world famous Chicken Box, or Seagrill, Kitty's, Bank of America, Nantucket Bank etc, and my favorite, the Downey Flake!
2A Winn St $1,395,000
Not far from where the picture above was taken (ahead off to the left), this slightly larger lot comes at a much larger price. This .19 acre lot in R1 zoning has nearly identical allowable footprint of 2500 sq ft. This property abuts 5 acres of open space (Quaker Cemetery to the rear, they are pretty quiet). A walk to the Hub is 129 feet closer but it will cost you more than $5007 per foot (thats $417 per INCH). You could build a lot of house with that $646,000 difference. In OCT 2015 #6 Winn St (5br/5ba, 5160 sq ft house (finished basement), .18ac lot) sold for $2.9 Million. Since the lots are comparable, 2A's asking price represents 48.1% of #6's selling price. Another angle to look at, if you take #6 selling price of $2.9M, subtract 2A's asking price of $1.395M and then divide that by the sq footage of the house at #6 (5160), you get $291 per sq ft on a SELLING price basis for #6. This means thats what you might get by buying #2A and building the same 5160 sq ft house that the market has recently said is worth $2.9M at #6. In other other words, if the $1.395 asking price for #2A makes sense, then so must the $291/sq ft for #6 on a SALE basis. I dont think thats reasonable at all, only a stock modular would get near that. If we take the $445/sq ft selling price that we get from 1 Long Pond as an example, the needed selling price becomes $3,691,200 (nearly $800,000 more) for the same house as #6. If we take the 33.2% factor of 2 Camelia and apply it here we would need a sale price of $4,201,807 for the land cost to equal the same ratio that 2 Camelia Ln represents, a full $1.3 Million above a recently demonstrated market value a few doors down. You might be able to get a little more out of this spot than that 8 month old $2.8M sale at #6, but I dont think $1.3M more.
Update: A newly built 5 br 5 3/2 ba (thats 3 half baths) 5100 sq ft home at 6.5 Winn St just came on the market in early July for $3.495M. The asking price of this lot at 2A would be 40% of a full price offer for this house, or 44.3% of a 90% offer ($3.145M, a more likely scenario). 44.3% of the probable sale of $2.25M at 2 Camelia is, you guessed it, right at $1M (OK $996,750).
6, 9, 12 Hydrangea Ln Sconset
$719,000-819,000
Update! 4/15/16 #12 has an accepted offer. UPDATE again: SOLD for $640,000! Thats pretty lowball! I dont know whats going on with this street, maybe its just 2 isolated incidents of apparently very eager sellers, I dont know. However lowball this seems though, 640K is 32% of the streets (barely maybe) $2m potential, thats pretty dang close to 2 Camelia's 33.2%, isnt it?
Update (8/16/16) : The lot at #9 has been reduced to $669K from $719Km and is also being offered as a package deal with the lot at #6 for $1.269M (or $634,500 each). If you have 2 adjacent lots for a package deal thats one thing, but across the street from each other? This along with the low sale of the house at #8 for $1.65M and with the lowball sale of the lot at #12 for $640K does not bode well for this street. I originally used this street as a comp of a $2M neighborhood because of the 11/25/14 sale of #5 for $2.075M, but these 4 recent developments on a street with only 14 lots make it difficult to call this a $2M potential neighborhood anymore. This is what can happen if you buy on a street with the majority of lots still owned by the developer when the developer decides to unload (this original parcel was bought for $6M on 1/12/05 so they are 11+ years into it). Sometimes a developer will sell the lots off over time, but its not usually 11 years. The fact there are still this many vacant lots on this "new" street after 11 years also says something about its desirability.
All this hasnt stopped the owners of #2 Hydrangea from putting their house on the market for $2.495M! Since this is the first house on the left, it also borders Milestone Rd, so you have traffic noise to consider. As far as dead end roads (Cul De Sacs) like this, I prefer to be on the end of the road, not the beginning like this is, lots less traffic both from the lane itself and whatever the intersecting street is. To me, this is one of the two least desirable lots in the development.
Think about this if you have any inclination to look at one of the 37 massively overpriced Cannonbury Lane lots that just came on the market. As far as Hydrangea Ln goes, this will all eventually wash out, so if you have a longer time horizon (3-5 yrs my guess), these lots might end up being a deal (lots of Nantucket ends up being a deal after 5 years though!). The Cannonbury story is completely different. Unless you are buying one of the very last lots at a 2/3rds discount, I would stay away, just my opinion.
There is also a similar scenario on Ellens Way in Miacomet 14 out of the 19 lots are still vacant and owned by the developer, plus one house built by the developer is for sale, in addition to 2 out of 3 of the other houses also for sale. If I'm right that leaves just one house and one lot not either presently listed or owned by the developer.
Also on Hydrangea, zoning restricts you to an approx 1000 sq ft smaller footprint than 2 Camelia Ln. This means a 2000 sq ft difference on a 2 story house, or about 2700 sq ft if the basement is finished, or 3200 sq ft difference if you finish 4 levels. That can be a LOT less house! While this area has views across the golf course, etc, you need to like WIND to live here, as it is wide open with no sheltering foliage. When taking the zoning difference into account, in addition to the recent negative price movements (only place on the island I see that happening), I think 2 Camelia is a much more attractive opportunity.
Recent Sales
Most of these are within the past 2 years or so. Keep in mind, though, there is a world of difference between 2013 and 2016.
1 Long Pond
This lot sold in Sept of 2014 for $550,000, which was 139.8% of the 2014 assessment. Also dont forget to add $30K more for septic so an effective $580K total cost. This came on the market as a 2792 sq ft completed spec home for $1.995M. It sold pretty quickly on 2/10/16 for $1.825M (91.4% of ask, he would probably do a little better today). This is a very interesting example as it gives an idea as to stick built construction costs. At the asking price it was $506 per sq ft (asking price minus land cost (accounting for the $30K septic cost), divided by the sq footage of the home), and at the selling price it was $445/sq ft. This does not include the small 1 car garage and landscaping, etc, so the house itself was actually a little less, but this $445 is a good figure to work with.
If you google "link listing sheet, 1 long pond rd" it is the first match, nice house!
Figuring this was sold at a profit, this obviously means it was built for less than $445 per sq foot otherwise he wouldnt have called me asking about my lot to build another house! He (smartly, I think) specializes in homes around 2000-2500 sq ft and around $2M , but seemed a little apprehensive about my lot being $200K ($170K effective when considering septic) more than the last lot he bought, even though the asking price of the house would be $500K more and selling price likely $425K more. Still he would have had to pay an effective $170K more (200k higher price minus the 5 BR septic that was included in the 750K price at #5) anyway for the similar lot at 5 Long Pond which would have likely yielded a similar $1.8-2.0M sale as 1 Long Pond did. So in reality 2 Camelia is priced the same in this market but for a probable $425K higher selling price.
The only other lot in the $550K range is on North point (now under agreement) for 579K (add 30K for septic), which is located in a pretty solidly $1.5M and under neighborhood of Warrens Landing. The likely sale here would be $750K less than the likely selling price for 2 Camelia and would represent a land to value of 40.6%. 2 Camelia would be an effective $140K higher land cost (when accounting for septic thats needed here, but not at 2 Camelia) for a $750K higher selling price, indicating a mere 18.7% land to extra value ratio for the difference in land price and selling price when comparing the two lots.
The 1 Long Pond lot cost (plus septic cost) was 31.8% of the final sale of $1.825M, but it was a 2014 land sale and a 2016 home sale. He is going to have a very difficult time replicating that in this market, which is indicative of what every other spec builder is facing, especially in the $2M-ish finished end of the market since 80% of available lots are over $1M.
A $2.355M SALE (I have been suggesting a $2.495 ask and $2.25M sale in today's market) at 2 Camelia would be required in order for the $749K land cost to equal the same effective 31.8% (when considering septic costs) he paid at 1 Long Pond. A $2.355M sale may be entirely reasonable by the time 2 Camelia is completed, if not right now. Remember the asking price for 78 Pleasant St was $2.350M 1 1/2 years ago and the selling price of $2.125M. A selling price of $2.355M at 78 Pleasant St a year from now would represent a 10.8% appreciation over 2 1/2 years not accounting for the quieter more private location and the 500 sq ft more available ground cover 2 Camelia has. Thats very reasonable I think.
So while he might see this as representing a bigger percentage of the final sale as his last project, it is actually extremely close when considering both the 2 year time factor of the land sale plus another year until the project is completed and marketed. Also when considering all the recent land sales in the 40-47% range, 2 Camelia's price is extremely reasonable not only in today's market, but even 2-3 years ago.
The lot at 5 Long Pond sold in Sept 2015 for $750,000 (159.5% of assessed, which would be $1.027M for 2 Camelia). This lot (at #5) included a 5 bedroom septic, which gives it about a $40K advantage #1 didnt have, so in reality it sold for about $160K more, or 29% more than the sale at #1 only one year earlier. Quite a price jump there for a one year period, similar to the jump we see in Naushop below.
71 Goldfinch Dr $1.299M
This is a 6 bedroom, 5 bath home in Naushop, which is a development off Old South Rd. This is another good example we can use to calculate approximate construction costs, this time of Huntington modulars. This lot sold for $460,000 in May of 2015 (130% of assessed). Subtracting the lot cost from the asking price, then dividing that by the sq footage (2967) we get $283 sq ft on a asking price basis. The land cost also represents 35.3% of the asking price, a bit higher than 2 Camelia's 30% of a $2.495M ask. Remember asking price vs selling price are usually a little different, the 33.2% I use is for my estimated SELLING price of 2 Camelia. A 95% offer of the $1.299M ask would be $1.235M, which would equate to a 37.2% land to final (selling) value.
Also in Naushop for $1.3M is another 6 Bed 5 Bath 4000 sq ft home at 7 Bluebird Ln built by the same builder as 71 Goldfinch above. Looking at town records revealed they also bought a third lot, 53 Goldfinch for $470K (133% of assessed) on 4/30/15. (7/29/16 I see they are before HDC for putting a Huntington modular on this lot also) Then the lot next door at #55 sold for $512,500 (145% of assessed) to someone different 3 months later on 7/31/15. 2 Camelia is presently priced at 116% of assessed. The builder got this lot (7 Bluebird) on 10/17/13 for only $300,100. Notice the difference in price of these comparable lots 18 months apart! The 2nd lot cost 50% more! Then the lot at #55 sold for 70% more! This house works out to $325 per sq ft on an asking price basis. Whats significant is that the builder had the confidence to buy 2 more lots at a much higher prices and build a 2nd and 3rd house. He did build a smaller house on the 2nd one though, but has the same asking price on both. This first house has a finished basement (which is usually the cheapest "addition" you can build but usually doesnt add that much to the value), which may explain the sq ft difference in the 2 houses, otherwise these 2 houses look very much alike. $1.3M is at the top of what houses in Naushop are selling for, so we will see what happens with these.
16 Ellens way $1,200,000 (OCT '15)
Since the lots on this road are very comparable (and the houses very similar), the recent sale of a house at 12 Ellens Way (Sept 2015) at $2.625 Million puts #16's $1.2M (180% of assessed) selling price (only a month apart) at 44.69% of #12's selling price. A 44.69% ratio applied to 2 Camelia would yield a price of $1,005,525.
Now a little closer to home...
78 Pleasant St $2,125,000
This beautiful Mickey Roland designed 2415 sq ft home sold in January 2015 and borders 2 Camelia for about 15 feet in the rear. The new owners are finishing the basement for additional living space (in other words probably spending another $100K, there was a crew of guys, vehicles, construction trailer, porta potty there for about 6 months, so it wasnt a little paint job). I would think all things being equal, this would have sold for more were it on 2 Camelia given 2 Camelia's comparatively more private location and superior ground cover allowance (78 Pleasant is R1 (30%) and 2 Camelia is ROH (50%). There is also now a time factor as this sale is 18 months old (as of July 2016).
13 A&B Kimberly Way
This main house and cottage combo sold 2 1/2 years ago in January of 2014 for $2.1 Million. Kimberly way is located just to the south of Camelia Lane and this property is within 70 feet of 2 Camelia. Because the house and cottage are on different sides of the end of the street, this was great for 2 separate vacation rentals, but took a while to sell, I think in part because of the timing, and also because of the somewhat unorthodox setup.
There also seems to be something about the properties the (now former) owner has developed that seems to make them difficult to sell. This was the same owner as the 2 houses (that are inseparable, maybe that was it) at 5 corners that just finally sold in January after being on the market for 3,276 days (nearly 9 years!) as well as the "Barn" at 31 York St (3,450 days and counting....Update! Accepted offer on 7/25/16 after being on the market 9 years 6 months and 10 days!). I've been in the barn and its nice, I guess, but not at all "Barny". All these places have been GREAT rentals, though, which has made the waiting not only bearable, but profitable. I have seen difficult to sell properties be great rentals in the past. People are more geared toward bedrooms and proximity (to beach or town) when they rent for a week or 2 and not the overall feel and layout that someone is more concerned with when buying. Odd places might not sell well, but may be great rentals.
80 Pleasant St
This vacant lot, which really appears on Kimberly Way directly abuts 2 Camelia Ln to the north, and 13 Kimberly to the east, and 78 Pleasant to the west. It is in R1 zoning (30% ground cover) and sold for $650,000 in Sept of 2005.
8R Back St $1,650,000
Sold on 9/9/14, the new owners are doing an extensive (going on 2 years!) renovation. You will never be finished if you keep changing you mind! (You will never stop spending money either if you dont stop changing your mind...)
107R Orange St $1,625,000
This 2164 sq ft 4 br 3.5 ba spec house had an accepted offer in one day and sold on 10/11/13. This was one of the signs that things were starting to turn around in the Nantucket real estate market (it always starts with a few first steps and this was one of them). As I remember the asking price was $1.8M so only a 85.5% sale to ask. Things really had not got going again yet and I think this investor was perhaps still a bit skittish and was happy to get an immediate offer. The lot sold for $500K on 7/31/12 after being on the market several years, so a 30.7% land to final value for this 3 year old sale (and 4 year old land sale).
103C Orange St $1,051,500
Sold on 9//9/14, cute post and beam 1 Br 1 Ba freestanding condo on the corner of Orange and Back st. This rents for $3000/week (VRBO #3866653ha)
8 Prospect St $710,000 3/11/14
8 Prospect was listed as land but contains a 1940s cottage. This is located directly on one of the busiest streets in town and does not provide the sense of seclusion that Camelia Lane does. The buyer of this lot will want to engineer a driveway that allows turning around. Backing out on to Prospect St would be a good way to "meet Jesus" as the saying goes. It was advertized as able to add a main house, but so far the new owners have stuck with just fixing up the cute 1940's cottage.
8 Prospect was listed as land but contains a 1940s cottage. This is located directly on one of the busiest streets in town and does not provide the sense of seclusion that Camelia Lane does. The buyer of this lot will want to engineer a driveway that allows turning around. Backing out on to Prospect St would be a good way to "meet Jesus" as the saying goes. It was advertized as able to add a main house, but so far the new owners have stuck with just fixing up the cute 1940's cottage.
7 Gardner Perry Lane $1,495,000
This 1655 sq ft home sold at ask July 2013 after being on the market only a week. Located 500 feet away, it is important to note the R1 zoning on Gardner Perry may limit expansion plans the new owner may have (this lot has about 850 sq ft less allowable ground cover than 2 Camelia Ln). Taking the assessed value of the structure off the selling price leaves $838,600 remaining.
This 1655 sq ft home sold at ask July 2013 after being on the market only a week. Located 500 feet away, it is important to note the R1 zoning on Gardner Perry may limit expansion plans the new owner may have (this lot has about 850 sq ft less allowable ground cover than 2 Camelia Ln). Taking the assessed value of the structure off the selling price leaves $838,600 remaining.
6 Coon St $750,000
In town Historic District lot located 850 feet away (as the crow flies) to the northeast, sold in May 2013 for $750,000. I noticed the house next door at #8 sold 4 times in the last 10 years and is an interesting study of the market and how it has come back. It also illustrates the value of 2 Camelia quite considerably.
$2.55M on 9/7/06
$1.8M on 3/12/10 (Ouch!)
$2.0M on 3/15/13
$2.7M on 11/4/14
Incidentally, since these 2 lots (6 and 8) are basically identical, the May 2013 sale of this lot, compared with the $2.0M March 2013 sale of the house next door yields a land vs final value ratio of 37.5%, a little higher than 2 Camelia's 33.2%. Present assessment is $4000 less than 2 Camelia (old assessment is also $4000 less). I would give Coon St a few points for being closer to Town, but then take some away some for being on a one way street which forces you onto Orange St which is a one way OUT of Town, which makes driving to Town about the same. 2 Camelia is only a 400 ft longer drive (which is about 13.6 seconds at 20mph), but walking is 1189 feet shorter (about 4.5 min) for 6 Coon because you can walk up Orange the "wrong way". Camelia Lane gets points for being more shady and private. Otherwise these lots are very comparable. The May 2013 sale of 6 Coon was 135% of assessment at the time. 135% of 2 Camelia's assessment at that time (the old $554K assessment), nearly 3 years ago now, would be $752,443, which is in line with my PRESENT DAY price. 6 Coon rents for $10,000 per week in Jul/Aug and as of April 1 is booked for those 2 months (VRBO #688150). This house is also a Milton (Mickey) Rowland design like 78 Pleasant St.
1 Spring St Sold for $450,000
Interesting lot spun off of 1 Spring St. This is an undersized .07 acre (3223 sq ft) lot located in the Flood Zone (forget a full basement). Next there is an easement (647 sq ft of your 3223 sq ft, leaving 2576 sq ft for the owner) that allows the neighbor a driveway to his garage, part of which is also on your lot! I dont know if that counts as ground cover, but if it does, subtract the 265 sq ft from the already low 1611 sq ft leaving only 1346 sq ft available for your house. 2 Camelia Ln can have a 85% bigger house, not even counting the basement you cant even dig at 1 Spring St.
11R Union St $1,100,000
This lot sold in March of 2016 for $1.1M ($482.88 per sq ft vs 2 Camelia's $146.77/sq ft). Your land cost per sq ft of ground cover here is $965 (yikes!) vs 2 Camelia's $293.
*Update: The original house this lot was spun off from just came on the market (7/13) for $2.995M. Their dump bill must have been high because it doesnt look like there is anything left of the original house even though the original 1844 date the house was built is mentioned in the first sentence of the listing. Also just because mustard yellow is an approved HDC trim color doesnt mean you have to use it. It is done in a more modern fashion like many spec houses on the market, which is not to my taste (could ya tell? haha), but thats just my opinion. It is not as bad as some "insane asylum white" spec houses I see lately (these make me look for the nice young men in their clean white coats...coming to take me away...), but it certainly doesnt say antique Nantucket either. In the front photo you can see the house at 11R is under construction. Doing that during the summer must be a parking nightmare. Having just walked by, #9 is undergoing a renovation at the same time. This adds even more to the already impossible parking situation.
This tiny 2278 sq ft lot at 11R was spun off of 11 Union under a provision in the zoning code "81L" that allows you to subdivide a lot if there were 2 structures on the lot for the past 50 years (also see 7 Gardner and 10 Weymouth).
This tiny 2278 sq ft lot at 11R was spun off of 11 Union under a provision in the zoning code "81L" that allows you to subdivide a lot if there were 2 structures on the lot for the past 50 years (also see 7 Gardner and 10 Weymouth).
The unrestored antique main house next door, which originally included this lot, sold for for $1.413M on 2/12/14, which means their net cost for the original house at 11 Union is now just $313,750 (thats practically free as far as Nantucket goes!). Since they renovated the death out of the old house, it probably cost the same as a completely new house. So this $313,750 is basically their "vacant" lot cost, which is $786,000 less than what the buyers of 11R just paid. It doesnt take a genius to figure who's going to make the money here. Although the main house is now only on a 2522 sq ft lot (it was undersized already at 4800 sq ft before being subdivided), when you add everything up, this will turn out to be a great investment for them, mostly due to the high sale price of this lot. I say high because there are numerous comps on this street that dont support a land value such as this. Final value most likely wont be much more (if at all) than 2 Camelia. It scores major points though for walkability to Town (its is only a 450 foot walk to lower Main St and 917 feet to the Hub) but is severely limited due to the size of the lot (house size, 1 parking space, tiny back yard patio area for a "yard"). Other things to consider are traffic backups going into Town in the summer will mean idling cars 10 feet from your front door for much of the summer. Also the lot backs up to Orange St hill (Long Hill as its called) which is to the west, which means your sunset is hours before other areas of the island. But, if close to Town is tops on your list, this scores very high. A much quieter comp would have been 14 Liberty St which recently sold for $2.4M. Almost identical walking distance on a MUCH quieter side street (not a main artery) leading out of Town.
Other comps on Union St itself are:
-9 Union, next door, sold $1.7M 9/26/14 2519 sq ft home on 3600 sq ft lot, good condition (was owned by a builder), now being renovated.
-18 Union, sold $1.795 1/17/15, 2754 sq ft home on 4398 sq ft lot (see below for what they did to this!)
-20 Union $3.5M 9/22/15 a 4997 Sq Ft home on 12,632 sq ft lot (5.5 times the lot size of 11R, lots of expansion options here including possible subdivision)
-19 Union, $2.1M 1/8/16, 3523 sq ft home with the only indoor pool in downtown Nantucket that I know of, on a conforming 5039 sq ft lot.
Other comps on Union St itself are:
-9 Union, next door, sold $1.7M 9/26/14 2519 sq ft home on 3600 sq ft lot, good condition (was owned by a builder), now being renovated.
-18 Union, sold $1.795 1/17/15, 2754 sq ft home on 4398 sq ft lot (see below for what they did to this!)
-20 Union $3.5M 9/22/15 a 4997 Sq Ft home on 12,632 sq ft lot (5.5 times the lot size of 11R, lots of expansion options here including possible subdivision)
-19 Union, $2.1M 1/8/16, 3523 sq ft home with the only indoor pool in downtown Nantucket that I know of, on a conforming 5039 sq ft lot.
-23 Union $1.35M 10/17/14, 1995 sq ft home on 4356 sq ft lot.
-26 Union $3.475M 10/23/15 3113 sq ft completely renovated (2015) home on a 6534 sq ft lot (2.86 times the size of 11R).
-26 Union $3.475M 10/23/15 3113 sq ft completely renovated (2015) home on a 6534 sq ft lot (2.86 times the size of 11R).
-23A Union Sold in April 2016 for $2.6M Its a 3305 Sq Ft home on a conforming 5227 Sq Ft lot.
As you can see, higher sales prices are possible on this street, but they are on much bigger lots. The smaller lots, which this is even smaller than those, seem to bring around $2M. Even if they can get $3M for it (you never know!), that would equate to $472.90 per sq ft (or $27.90/sq ft over the $445 we saw at 1 Long Pond), or a profit of $101,970 not including other expenses. Not much margin there. A sale of $3,131,000 (or 95% of a $3.295M ask) would be required to make the $1.1M land sale equal to 33.2% of the final selling price.
As you can see, higher sales prices are possible on this street, but they are on much bigger lots. The smaller lots, which this is even smaller than those, seem to bring around $2M. Even if they can get $3M for it (you never know!), that would equate to $472.90 per sq ft (or $27.90/sq ft over the $445 we saw at 1 Long Pond), or a profit of $101,970 not including other expenses. Not much margin there. A sale of $3,131,000 (or 95% of a $3.295M ask) would be required to make the $1.1M land sale equal to 33.2% of the final selling price.
With the asking price of the newly renovated original house next door starting at $2.995M, maybe they can do it if they dont do it in mustard yellow trim! Obviously not every lot has to be 33.2% but this looks like it will end up being more than that, I'm just illustrating the relative value of 2 Camelia. I think a realistic selling price for this (and also the renovated original house) is around $2.5M, which would make this $1.1M lot sale 44% of final value. This is a very difficult area for construction due to its close in Town location on a busy narrow street with lots of traffic and limited (and timed in the summer) parking, and virtually no room on the lot itself for tradesmen's vehicles, etc. Builders (smart ones anyway) will take this into consideration when responding to bids. It doesnt make it impossible, but it does make it a pain in the...and with the simultaneous renovation of 9 Union going on, a really big pain in the......
On the left is the nearly completed reno of the original 11 Union and on the right 11R is under construction.
Either a family home or rental income (awesome spot for a rental!) is the only thing I can figure they are thinking for this property as I dont see them doing well with a build and sell spec home. However, nothing in my life has surprised me more than Nantucket real estate, so I guess we'll see!
An interesting development on Union St is the recent listing of 18 Union for $5.25M. It is a nice stately home on the corner of Union and Coffin St (The Coffin name is from one of the original 7 settlers of Nantucket) It sold for $1.795M on 1/17/15 and has been completely renovated. This is pretty high for the street. This is illustrative of in-town properties in that you have Union St right out the front door, Coffin St right along the right side of the house and the house at 16 Union is literally 2 feet away. You will have to be ok with this if you want to be really close to Main St. If not, I think 2 Camelia provides a good balance between close to Town and enough room so you aren't digging your phone out of your pocket every time your neighbor's rings.
An interesting development on Union St is the recent listing of 18 Union for $5.25M. It is a nice stately home on the corner of Union and Coffin St (The Coffin name is from one of the original 7 settlers of Nantucket) It sold for $1.795M on 1/17/15 and has been completely renovated. This is pretty high for the street. This is illustrative of in-town properties in that you have Union St right out the front door, Coffin St right along the right side of the house and the house at 16 Union is literally 2 feet away. You will have to be ok with this if you want to be really close to Main St. If not, I think 2 Camelia provides a good balance between close to Town and enough room so you aren't digging your phone out of your pocket every time your neighbor's rings.
Update! Sold for $3.985M!
Update: 18 Union has been reduced by $675,000 to $4.575M. Comparing this to the newly listed and renovated 11 Union, 18 Union is 746 sq ft bigger and the lot is nearly twice the size of #11 which leaves a back yard or the possibility for a small cottage or garage. Now the $1.58M higher price makes a bit more sense, but still more than $2M more than the $2.5M I think #11 will eventually sell for, we'll see though. If this can sell for a good price first though, it may help the two 11's selling prices. We will see.
Update #2 18 Union has been reduced again by $180,000 to $.4.395M. This is more like it. The $5.25M initial price was really high, but nothing wrong with going for it.
So thats probably more than you ever wanted to know about Union St. Oh yea, 17 Union is on the market for $2.5M, so put that into the mix too.
9 Back St $1,000,000
Sold on 1/19/07, this comparably sized lot located 250 ft away from 2 Camelia sold for $1,000,000. 2 Camelia is more private has the benefit of being on a private dead end road and is priced 25% below this 9 year old sale.
Incidentally the house next door to this lot (to the right) at 7.5 Back St was listed in April for $1,975,000. According to the assessor the house itself is assessed at $947,500 and is 96% complete. This would work out to about $986,979 at 100% complete, or $442/sq ft. Since the $442 per sq ft is close to the $445/sq ft construction cost (on a selling basis) that we saw at 1 Long Pond, this makes the assessor's estimate quite reasonable. Subtracting that from the asking price leaves $988,021 for the implied value of the land (hmmm, there's that $1M again).
Also of recent note, the house to the left of this lot didnt even last one day (7/20/16) on the market priced at $1.925M.
Also in the neighborhood, 58 Pleasant is under agreement from an ask of $1.295M (7/22/16). This is a smallish (1263 sq ft house and 504 sq ft cottage) combo that last sold in 2006 for $1.01M. It went on the market for a while in 2011 and again in 2014 for $895,000 and then again in Sept 2015 for $1.395M, reduced to $1.295M and now is under P&S. Interesting 44.6% $400,000 jump there in the last 2 years! This is up near 5 Corners and has (kind of) 2 parking spots in-line (meaning one is always "parked in") and will have traffic idling outside the front door many times in the summer. The land assessment is very close to 2 Camelia's (only $5500 less), but I wouldnt put this location in the same category, 2 Camelia is a much nicer spot. This has been a vacation rental for years (booked Jul and Aug at $6500/week VRBO #743482).
Fixer Uppers
There have been a few fixer uppers that have sold in this area in the last few years and some people have asked me "what about that sale over there? It even had a house on it!"
Well...
76 Pleasant St. This antique (1850ish) house which borders 2 Camelia came on the market in Aug '15 and sold for $717K this April. It was where Camelia Oliver raised 11(!) children, hence the name Camelia Lane. It was still an antique and needs a new foundation, roof, has no insulation, the only bathroom is in one of the bedrooms, etc etc. There are logs (trees with the bark still on!) used as support (because it was needed!) in the basement, which is low and mostly a dirt floor. Because of its age, you cant tear it down. There is plenty of room to expand (1600 sq ft of additional ground cover) and thats where the value is, but whatever the new owner's plans are (I've looked and he usually keeps places for a few years fixing them up then selling), they will have to incorporate the (small) old house into those plans. Still, this was the best deal in fixer uppers in the neighborhood I think, mostly because of the 1600 sq ft of additional ground cover available. Most of the others had very little, if any additional ground cover left.
36 York St. This house sold for $1.485M on 8/24/16 This house on a tiny lot in 30% ground cover R1 zoning does not have ANY NADA ZERO available ground cover left. It is on the part of York St on the way up toward the Old Mill and sold for $825K in April of this year. This was a never ending restoration (so it seemed, it was last sold in 2010 for $480K). It had a good head start though (outside was complete) so it was finished quickly and came to market on 7/14/16 for $1.55M, reduced to $1.495M and has now sold for $1.485M. The listing says its 1650 sq ft but I think a good part of that (1/3rd?) is finished basement. They did a nice job on it though which undoubtedly contributed to its quick sale. I initially thought he paid a little too much because I never thought it would go for $1.5M (there I go, surprised again!), but it turned into a good flip for this local builder because all the cans of old house worms had already been encountered and fixed leaving just the new interior stuff left (the 2nd mouse gets the cheese in this case). I think $1.5M for a tiny house like this 5 feet from busy York St bodes very well for a nice 2500ish sq ft house on a much larger more private and quiet Camelia Ln.
Next is 10 Back St. This is approx 100 feet to the northeast of 2 Camelia. This sold for $737K in Oct of 2013. This was set up as a duplex and was a rental for years. It ended up needing complete replacement (the only original detail left is the interior wooden staircase seen below) but it was old enough that the HDC wouldnt let them do anything but rebuild the same house (on the outside anyway). So the $737K was basically their lot price. The lot is smaller than 2 Camelia and their front step is about 4 feet from the pavement on Back St. The value once completed (3 years later it is weather tight but still open stud inside) will be probably about $1.5M because the sale of 9 Back St (in less than 1 day!) for $1.837M is a bigger house plus garage apt on a bigger lot. So their land cost will end up being about 49% of final value. This means they will also likely have little equity once the house is finished. There is a certain level of comfort that when you buy a vacant lot you know you arent buying a 200 year old can of worms that ends up costing far more than you originally expected.
Now, would a real estate agent have told you all of this???
Thats all for now, good luck in your search!
Subscribe to:
Comments (Atom)