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!)