I like statistics and academics when it comes to market analysis, but generally speaking, I think we've had a lot of healthy correction on Nantucket. The first quarter sales stats show momentum. The April sales kept pace, and there are some good properties under contract now. Sales volume in the first quarter of 2010 was literally 100% better than Q1 of 2009. All things relative that may not speak volumes since 2009 was a rough year, but among the 70 closings were some high profile properties. By high profile I mean prime locations, water view or waterfront listings that had been visibly on the market for a while. When these transfers prices are published in the paper a lot of people recognize the property and see the sale as evidence that things are moving again. Moreover, the brokers and the active buyers see the trade price, track back to the asking price (s) — original, reduced and for some reduced again — and a "eureka" moment occurs. They recognize that a particular sale was a good deal. After a couple of these, the buyer psyche starts to shift from the protracted 'waiting for the bottom' to opportunity shopping. While this is a conceptual answer vs. rote market stats, I think the perception of the market is particularly important right now. Unquestionably, the island values have reset and most of us feel there is a lot of value in Nantucket real estate right now. Prices are down a fair 25 percent. In some locations it is more, while some properties have elements of enduring value that have supported the prices. There are micro-markets on Nantucket, so it does depend on what location or what type of property you are looking at. Overall, the market is moving again, and the new comps lend confidence and pragmatism to both buyers and sellers.

There has been talk of signs pointing to national recovery. What's your take on when we will feel the full and lasting effects of any recovery on Nantucket?

A full and lasting recovery — that is a lot to hope for. The Dow recently closed over 11,000, but the macro-economics and monitory policies are going to be hard to navigate for a while. Keeping it local and island-focused, I think our residential market has stabilized, but we still have a lot of inventory to absorb. There is a lot of vacancy in the commercial sector, but how great is it to see island businesses, like Nantucket Looms, back on Main Street and The Lion's Paw opening in the old Sports Locker space? There are some new businesses opening, and ReMain Nantucket buying a commercial building on Centre Street preserves another prime commercial building downtown. In 2004, we sold 776 properties and the average home was $1.672 million. Last year there were only 300 sales but the average home was still $2.236 million. Year-to-date 2o1o, the data compiled shows the average home at $1.628 million. Of course, I want to see properties hold value, but I genuinely think a sustainable and lasting recovery for the island comes when there is room in the market for more buyers to afford homes and more vacationers to afford renting. More people on island means more commerce. More home sales leads to more work in the trades, and the wider value spectrum for properties opens the door of possibility to the next generation of Nantucketers.

What is the state of the rental market?

Getting better. The horizon for vacation planning is a lot shorter than it used to be. I remember when I first started with Jeff (Lee) in 1996, and it seemed the majority of people were securing their re-rental in August or September, and we were busy thru the fall booking for the next summer. Over time the rental rates elevated with the market, but in the last few years there was more vacancy given the economic climate. Last summer, the agents worked really hard to negotiate rates and actively booked leases into August. I think there was a lot of good dialog with owners and renters, and rates going into 2010 were well vetted. It is (remove still) nearly impossible to find something for the first 2 weeks of August but there are still good properties available throughout the summer and I think we'll see them fill up.

What kind of properties are selling right now?

The range of what has sold this year is as varied as the different locations on the island. The Polpis Harbor waterfront property on Top Gale Lane sold for $19.2 million. A fantastic in-Town property on Academy Lane sold for $5.1 million. A house by architect Hugh Newell Jacobson sold on Morey Lane for $3.2 million. A house on Cliff Road across from Tupancy sold for $2.450 million. A Surfside house on Pequot just closed for $1.9 million. A cottage in Madaket with great views of the harbor sold for $1.2 million. The NLS data cites 84 sales so far this year with an average price of $1.628 million. There have been a number of foreclosures, and again these prices range from $5.9 million in Shawkemo to the $400,000s Mid-Island. There is a good list of properties under-contract, and some good new listings recently on market.

What neighborhood(s) do you think is/are undervalued now?

Value is quantitative, but it is also subjective. One of the enigmas of the Nantucket market is why this location has a $/sqft so much higher or lower than another. Zoning and groundcover allowances make that a bit of a rubix cube, but the other dimension is experiential. Nantucket is a 2nd or 3rd home for most buyers, so there is a premium value on the newer builds and turn-key homes. But, I think nostalgia can be a powerful emotion in real estate. For that I think the timeless elements and bucolic charm of ’Sconset are exceptional and undervalued. Likewise, the old cottages in Madaket are vestiges of another time that was, and is, authentic Nantucket summer living.

What neighborhod(s) do you think best retain its/their value over time?

Can keep this one short — Brant Point, Cliff/Lincoln Circle, ’Sconset and Town. Waterfront, water views and walk to water, walk to Town, walk to village.

Are you seeing any movement in the sale of land, up or down, from previous years?

Still just a few land sales on record, but the ones that traded were good properties and the confidence index is rising on land. The slowdown in construction has made this a competitive time for builders, and that translates into better economy for new construction costs. A few good lots made very recent price adjustments and deals came together quickly thereafter. The surplus of inventory in housing stock challenges buyers to find the best value. Where there are some great pieces of land for a fair price, there is room to create new value. It will be interesting to see what buyers choose in the months ahead.

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