Island Ways | Can we work our way out of the housing crisis?

||| FROM NANTUCKET INQUIRER AND MIRROR |||

 Finding an affordable house has become a waiting game for Lorna Dollery, one that she doesn’t know will end.

“I have no idea how long it may be, if ever. When I first moved here, I was really optimistic about buying a market-rate house. It seemed very difficult but not impossible with hard work and savings. But that was nine years ago,” Dollery said.

Since moving to Nantucket from Ireland, she has worked countless jobs, and started her own small business that has seen success. But that hasn’t been enough to offset the dramatic rise in real estate prices. She now finds herself on waitlists for upcoming affordable units, because buying a market-rate home that will easily cost close to $2 million is unrealistic.

“Unfortunately, gone are the days of ‘just work harder’ if you want to own a home on this island,” Dollery said.

That day has been gone for decades on Nantucket. The average price of a home on the island hasn’t been below $1 million since the turn of the century, when it was $920,000.

Values have risen steadily since 1993, when the average price of an island home was $235,000. But around 1995 is when the “boom” really started.

Nantucket properties started getting snatched up by mega-wealthy financiers and entrepreneurs at premium prices. Real-estate agents at the time attributed it to the success of the stock market. Those that made out well on stocks started investing in luxury, and they found it in the form of island getaways.

Demand was extremely high and sales turned over quickly without much need for negotiation. Homes were often sold just a month or two after entering the market and sellers were often getting a staggering 90 percent or more of their original asking price, often in cash.

Eventually, million-dollar deals at the top of the market started pulling up prices at the bottom. By the end of 1995, the average home price shot to over $400,000. The next two years it was over $500,000, and then $673,000 in 1998 before reaching $920,000 in 1999. It’s gone up almost every year since, and skyrocketed since the COVID-19 pandemic, when affluent buyers looking to escape congested urban and suburban communities began buying island homes at or above the asking price.

Cheapest homes over $1 million

Last year’s average sale price was $4.2 million, well above what year-round islanders like Dollery can afford. The cheapest homeownership opportunity on the island as of publication is a five-bedroom, three-bathroom single-family home on Cynthia Drive, listed for $1.6 million.

“It’s not only unaffordable for people who are trying to get housing, it’s unaffordable for people who are trying to stay in their housing,” said Brian Sullivan, chair of the Nantucket Affordable Housing Trust.

“We know that there are entire families living in a bedroom. It’s real. I hear these stories all the time, and it breaks my heart, because I know we could be doing better,” said Select Board member Brooke Mohr, also a member of the trust.

For an islander making at or below 80 percent of the area median income, $65,950 per year for a one-person household, or $94,150 for a four-person household, an affordable home price would be $306,500. At 150 percent of the area median income, $142,950 for a one-person household, $204,150 for a four-person household, affordable would be $702,465. Even those making up to 240 percent of the area median income on the island fall short of competing for or maintaining a $3 million home.

“Everyone’s looking for housing,” town housing director Kristie Ferrantella said.

READ FULL ARTICLE