May 24, 2024


Mad about real estate

Foreclosures, Short Sales and Failed Auctions hit Nantucket Island

In previous many decades Nantucket Island was taken to be a thermometer for measuring the health of Wall Street. But the glass cracked unable to withstand many years of pressure that was unsustainable.

But miraculously the thermometer mercury is going up once more. It seems something brand new and surprising has come to this summer paradise – foreclosures, failed auctions, short-sales and a skimpy municipal budget. The financial policy makers can make snips and walk off but the locals have to put up with the heavy burden.

Brian Sullivan of Maury People Sothebys said that there are two types of markets – one is Wall Street and the second is all others. The real estate listing shows that about two-thirds of the properties are priced at less than $1 million.

The price factor is ruled by the 12,000 perennial residents of the island. But the banks refuse to talk to small borrowers. Thus for them loans are difficult to get. The banks want to advance loans to those who are asking for amounts mover $1.5 million.

The freezing of credit partly explains the foreclosure factor. Since the savings-loan crisis of the 90s Nantucket has been silent. During the first six months of this year out of 163 sales 20 properties came from the foreclosure category – it being double the rate of the previous year.

David Callahan of Jordan Real Estate said that during the boom years all that was necessary to have a mortgage was to be able to breathe. A house was bought for $356,000 and sold off for $425,000.

When the holiday makers from Wall Street discontinued their visits, jobs vanished. Applications for building permits diminished at an alarming rate; it was 43 in 2009 – the lowest since records have been kept by the town from 1972.

Some of the properties are being sold at half its assessment price. It had been the same picture during the savings-loan crisis when the houses were purchased at 72{ef6a2958fe8e96bc49a2b3c1c7204a1bbdb5dac70ce68e07dc54113a68252ca4} of its assessed value. Town assessor Deborah said, “Assessments are a snapshot of the market in the rearview mirror”. It indicates the previous level of prices. The journey has been long from yesterday to today.

For instance a house on Squam Road that had been purchased for $1.08 million had been assessed for $1.86 million. Another one in West Chester assessed for $1.86 million was bought for $900,000.