Whereas national housing markets tend to move in cyclical stages, local housing markets tend to be seasonal. A perfect example in this regard is the island resort of Nantucket in Massachusetts, where a high real estate season has taken place for about a decade.
Located about 30 miles due south from Cape Cod in Barnstable County, Nantucket used to be the whaling capital of New England. Once the whaling industry subsided, tourism and real estate became the predominant economic activities. It so happens that a certain dynamic has emerged between real estate and tourism in Nantucket: business-minded vacationers who spent many summers in this island are now turning into homeowners and property investors.
The Recent History of Nantucket’s High Real Estate Season
It all seems to have started in 2003, right in the midst of the housing bubble in the United States. Back then, the Wall Street Journal reported that real estate transactions during the fall in Nantucket had more than doubled on a year-over-year basis. The traditional peak sales months for the island are September and October, but suddenly there were sales taking place even in the dead of the winter in 20014.
Sellers in Nantucket were certainly motivated ten years ago, but it is important to note that the buyers who were interested at that time became crucial in adding value to the local housing market. For example, a pioneering home buyer around this time was Louis Ceruzz, a real estate developer from nearby Connecticut who had been vacationing at Nantucket for nearly 20 years; one of his business partners also decided to purchase a home in Nantucket, and these two transactions together injected more than $15 million to the local economy.
In the past, the Nantucket residential market mostly attracted buyers who hoped that their real estate acquisitions would put them closer to the high society spheres that include the likes of the Heinz and Hillman clans. Over the last ten years, the home buyer demographic at Nantucket has switched, and now long-time vacationers whose careers have brought them success would like to own second homes here.
Second Home Owners as Property Investors in Nantucket
Before the dawn of the Nantucket high season, the second home market was dominated by hotspots in California and Florida. Palm Springs, Sarasota, San Diego, Palm Beach, and Orlando were the some of the hottest markets for vacation homes in the early 21st century; however, it seems as if house hunters got tired of the Mediterranean revival style of residential architecture and became interested in Cape Cod homes instead.
Quite a few Nantucket home buyers in recent years have come from the aforementioned Florida and California markets, and they were attracted by the marketing efforts of those who arrived earlier. The idea is to attract smart real estate investors who see the rental income potential in Nantucket, where there is not too much room for expansion. As a result, the housing market of this island managed to withstand the real estate downturn that affected several other regions of the United States from about 2007 until recently.
In the end, it interesting to learn how a few smart real estate investments brought positive change to the Nantucket housing market and its local economy.