Here on Billionaires’ Isle: Nantucket is attracting the uber-wealthy
A string of recent home sales and listings is throttling this island’s wealth connotation to new heights. Continue reading on realestate.boston.com.
Manhattan may be home to Billionaires’ Row — a set of ultra-tall (and ultra-expensive) residential skyscrapers dotting the southern end of Central Park — but Massachusetts as of late can easily lay claim to Billionaires’ Isle.
Where is this tony-sounding place? Hint: This island is known for its certain hue of red.
It may have its roots in whaling, but Nantucket’s more recent reputation is that of a summer retreat for the wealthy. And a string of recent home sales and listings is throttling this island’s wealth connotation to new heights.
Sorry, The Hamptons. There’s a new one-percenter beachy paradise stepping into your spotlight. However, locals insist their island, located about 30 miles off the coast of Massachusetts, isn’t a flashy spectacle like the Hamptons.
This is still an enclave in reserved Massachusetts, after all.
“Despite the explosion of wealth on the island, it still remains a remarkably civil and grounded place to be,’’ said Bruce Percelay, a longtime summer resident, publisher of Nantucket Magazine, and founder of the Boston-based real estate development firm Mount Vernon Co. “Pretense does not go very far here, and the culture of the island still remains very much intact despite its growing affluence.’’
Without naming names, Percelay said he has seen people come and go with the idea that their flashy cars and brimming bank accounts would somehow give them a leg up in making a name for themselves on the island.
Nantucket is much more about making genuine connections with the community, Percelay said. That often means coming together to raise money for a new hospital or helping out with those affected by the Veranda House hotel fire.
“There is just an intangible part of life on Nantucket where people who come here recognize that the size of their checkbook has absolutely nothing to do with their position on the island,’’ Percelay said. “In the Hamptons, if you drive an expensive car, people are impressed. On Nantucket, if you drive an expensive car, people are turned off. It’s just an entirely different ethos.’’
Keep in mind: Becoming a landowner on this island of reported lack of pretense and civility still comes at a hefty cost.
Four of the 16 most expensive homes for sale in Massachusetts in early July were on the island.
John Henry, owner of the Red Sox and The Boston Globe, closed earlier this spring on a $25 million Nantucket estate and later bought an adjoining property. The two properties’ combined $37 million sale price is the current record holder for the most expensive home sale on the island.
Stephen Schwarzman, Blackstone CEO, was reportedly the buyer last fall of a $32.5 million waterfront mansion overlooking Nantucket Harbor, according to the Nantucket Current. That had been the most expensive home sale on the island until Henry’s. Another waterfront estate hit the market earlier this summer, for $56 million. If it goes for its asking price, the home would eclipse Henry’s as the most expensive home ever sold on the island.
“We’ve seen probably 17 or 18 deals over $15 million in the last 12 months, and I think the market in general is still pretty healthy here as opposed to some other areas where you’re seeing more and more supply,’’ said Michael Passaro, a Douglas Elliman broker. “Obviously, it’s an island, and you’re not building out more. There’s a finite number of properties that can be built.’’
“Despite the explosion of wealth on the island, it still remains a remarkably civil and grounded place to be.’’
BRUCE PERCELAY, longtime summer resident and local publisher
Land on the island becomes even harder to come by when you factor in the Nantucket Land Bank, which levies a 2 percent transfer fee on most property transactions on the island. That funding then goes to acquire land for open space, agricultural, or recreational uses. To date, nearly half the island is preserved as open space.
But it likely isn’t the open space and small-town-at-sea charm that are making this island a magnet for some of the world’s wealthiest families.
Given its location, privacy is a natural feature for anyone living on the island. Sure, estates behind gates and set back from the road will always come with privacy, but the fact that it takes legwork — and securing a spot on crowded ferries — to get to the island means there is even some degree of isolation walking around downtown.
“It’s not like you can get in a car, and you’re going to run by big-box stores. You’re very secluded. People aren’t going to be bothering you,’’ said Craig Brody, a Boston-based real estate agent with Douglas Elliman. “That’s a big lure to the islands, for sure.’’
Property taxes on Nantucket are also significantly lower than in the Hamptons. Nantucket property taxes amount to $3.74 for every $1,000 of assessed value — meaning the property tax on a $1 million home on Nantucket amounts to $3,740. By comparison, property taxes for a home at the same value in certain parts of the Hamptons comes to an eye-popping $273.25 for every $1,000 of assessed value, according to Town of East Hampton tabular statement for 2021 and 2022.
Additionally, the Nantucket airport has a longer runway and fewer noise restrictions than the one in East Hampton.
Yes, readers. Not only is Nantucket easier to access by private jet — its waterfront estates are a value play of sorts for the uber-wealthy.
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“The Hamptons, I think, had a very good run. Nantucket is obviously a little bit different. It’s a little bit more relaxed. It’s a smaller area. It’s easier to get around,’’ Passaro said. “I also think once a few wealthy people come or the billionaires’ club comes, wealth definitely attracts wealth.’’
Some folks may be scratching their head at the idea that Nantucket’s surge in home prices is recent history. The typical home value on Nantucket is just over $2 million, according to Zillow. That’s nearly a 12 percent jump from last year. Believe it or not, it hasn’t always been that way.
Before billionaires came a-buying, Nantucket was the setting for Herman Melville’s “Moby-Dick,’’ a nod to the island’s roots as a whaling hub. The author depicted the island not as one packed with billionaires and their estates, but one of “all beach, without a background.’’
The island’s magnetic pull on those with a blue-blood background began roughly in the 1980s, when fortunes ballooned off Wall Street, locals say. It has accelerated further in the past two years.
“It’s always been super expensive, and I think the prices just went up through COVID. Rich people made a lot of money in the last few years before COVID and even more during COVID, especially in tech and some other things,’’ said Gary Winn, a Nantucket-based real estate broker with Maury People Sotheby’s International Realty. “It’s just a continuation of what’s been going on, but it’s just stepped it up to another level.’’
But the continued influx of new blood onto the island doesn’t mean everyone is living together in harmony.
Displacement of longtime residents and a severe shortage of workers (driven off the island by soaring home prices and rent) mean it is increasingly difficult to staff up and operate a business here. Finding a way to accommodate individuals of all economic backgrounds is key to keeping the charm of the island alive and not turning this slice of paradise into just another version of the Hamptons.
“The biggest, negative repercussion of all of this is the cost of living for the working and middle class here, because it is very high,’’ Percelay said. “Without a working class and a middle class, this island cannot function.’’
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