Nantucket Real Estate: A Legal Perspective on 2023 and Emerging Trends in 2024
In the dynamic world of Nantucket real estate, 2023 marked a year of significant changes and emerging trends, particularly as observed from a legal standpoint. I set out to better understand the pitfalls and trends in Nantucket real estate as told by our island attorneys. Read on to learn about the shifting landscape and what it means for buyers, sellers, and the community at large.
A Shift in Transactions and Market Dynamics:
• 2023 witnessed a decline in residential property transactions
• Fewer buyers sought financing
• Buyer expectations veered towards expediency over quality
• There was a general increase in stress among both buyers and sellers
• Many “old Nantucket” families sold their properties, passed away, or relocated
When you are working with a Fisher agent, we want you to be prepared at all levels, recognizing that improved preparation will make for a less stressful and more seamless transaction.
• While not specifically listed, there was a theme from all the attorneys that transactions were more difficult to get done because houses came with inherent challenges (deferred maintenance that led to bigger issues), and pre-sale preparations were not as thorough as possible
• There was increased regulation with everything from septic regulations, water testing oversight, and banking/lender scrutiny
• Heightened HOA involvement
• An increasing number of transactions had complications due to property locations and characteristics from wetland concerns to MESA involvement
These complexities underscored the evolving nature of real estate transactions on the island, demanding more astute strategic considerations. This point alone highlights the need for a team of advisors from your real estate agent, attorney, and banking/financial professionals.
The Evolution of Buyer and Seller Behavior:
• More buyers intended to rent their properties (this is a change from the last few years when properties transacted to homeowners who were not interested in renting out their homes)
• There were fewer contingencies written into offers, and sellers seemed to have more leverage due to the short supply of available homes, therefore, less inclined to negotiate or make standard concessions
These are just reflections of an evolving market and why it is critical to have representation from a local island real estate agent who is “boots on the ground” with intimate knowledge of what is happening on a day-to-day basis, providing you real-time data.
Recurring Pitfalls in Transactions:
Sellers were unprepared for the market, facing issues with:
• Open building permits
• Septic systems compliance/regulation
• Missing compliance certificates for prior work
• Other title-related challenges
These details highlight the need for improved seller preparation before engaging in the sales process. Your Fisher Real Estate professional can add value by reviewing your building permit file, encouraging septic & property inspections, and, pun intended, getting your house in order before entering the market. Being proactive about these details will save all parties time and money while creating a more efficient transaction.
Anticipating 2024: Trends and Predictions:
• Nantucket is on the brink of a substantial wealth transfer, specifically property inheritance
• There may be a future impact if Short-Term Rental (STR) regulations are implemented
Despite the uncertainties, one thing is clear: the market is expected to remain tight due to limited inventory and no immediate expansion.
The year 2023 marked a pivotal point in Nantucket’s real estate history, with trends and challenges that reshaped the market’s landscape and have set the stage for a dynamic 2024. As we navigate this transition, the insights from the legal community provide a valuable lens through which Fisher agents will be better able to understand the future of real estate in Nantucket and add value to your experience. We greatly thank our friends in the real estate law profession for candidly sharing their experience and insights — let’s see what we have to say about all of this a year from now!