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Nantucket, Massachusetts, a historic summer vacation destination, became a year-round refuge last year, thanks to the coronavirus pandemic. The run on real estate on the tiny, tony island is now causing a shortage of both homes for sale and rentals, and prices for both are going through the roof.
The dollar volume of sales on the island last year totaled a record $1.86 billion, nearly twice that of the year before, according to the local multiple listing service.
“It was the busiest sales market I’ve ever seen on Nantucket in my 30-plus years of selling real estate,” said Edward Sanford, a principal and broker with Great Point Properties.
Sanford said buyers went big, setting records at high price points across the board, in the $2 million to $10 million range. This year the competition is even more fierce.
“A property that was worth $1.7 million last year is going to go on the market for $2.5 million this summer because we’re in that amazing seller’s market,” he said.
Rentals are just as fierce. Finding a home to rent for a week or a month this summer is increasingly difficult.
“We’re finding it to be a big challenge this year because of how busy the real estate market was last year,” said Sam Parsons, an agent specializing in rentals with Great Point Properties. “A lot of our rental inventory sold, and those buyers are choosing not to rent, because they plan to be here this upcoming summer.”
For example, a home in the Surfside Beach area of the island, renting in July and August for $21,000 per week, is fully booked. While there is no official rental data available, several agents say anecdotally that summer rents are up about 15% compared with pre-pandemic levels.
And it’s not just Nantucket. Summer homes from the Hamptons on Long Island, New York, all the way to the Outer Banks of North Carolina are seeing big demand for both rentals and sales.
January is usually a slow month, but not this year. Mortgage applications to buy second homes in January were up over 80% from a year ago, according to Redfin.
“The fact that nearly twice as many second-home buyers submitted applications in January as the year before means the popularity of vacation towns is not a fad,” said Redfin economist Taylor Marr. “Many Americans have realized remote work is here to stay, allowing some fortunate people to work from a lakefront cabin or ski condo indefinitely.”