Nantucket Residents Sink as Wealthy Trim Sails
A playground for prosperous visitors from Boston, New York and around the country, Nantucket possesses charm and beauty that has attracted vacationers with money for centuries. As an island, there is an obvious limit on space, but it also has a man-made limit on construction, since roughly 50 percent of the island won't ever be built upon due to environmental preservation efforts.
All this means that land is at a premium, which is particularly hard on the island's roughly 12,000 year-round residents -- who don't earn big Wall Street bonuses that allow for $5 million to $15 million summer homes. The median annual household income for year-rounders on Nantucket is around $55,500.
With vacationers pulling back on discretionary spending this year, however, an increase in foreclosures on Nantucket has created an even tougher housing market for Nantucket natives, many of whom have family connections stretching back generations.
CNN recently painted the housing picture for Nantucket residents: Nearly two-thirds of distressed properties on the island are listed for less than $1 million. In the first half of 2010, foreclosures accounted for 20 of 163 sales (twice the 2009 rate), and banks have turned their backs on small borrowers.
According to Nantucket's Green Point Properties, the average sold property was on the market for 290 days.
Part of the problem for island residents is that Wall Streeters have pulled back from vacationing, which means less income for them. Last year, new building permits stalled at 43, the lowest number since the town started recording them in 1972. A recent story from the island's newspaper describes a slow June for the island, but bustling Memorial Day and July Fourth weekends. When the number of vacationers declines, the island's residents suffer, so the busy holiday weekends offer a ray of hope.
Green Point Properties says that year-to-date sales through June were up 60 percent over last year and transaction volume is up 79 percent over last year. And although 64 of the 89 houses sold went for below $1.5 million, it's the uptick in activity this summer that is the good news.
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