Nantucket and Martha's Vineyard have long been coveted summer retreats for the elite, drawing in celebrities and high-net-worth individuals seeking luxury and tranquility by the sea. However, recent trends in the real estate market reveal another side to this picturesque lifestyle—one fraught with the risks of coastal erosion and significant financial losses.
The Case of Billionaires Isle
Nantucket's prestigious "Billionaires Isle" has historically been a symbol of opulence, where homes fetch sky-high prices. Yet, the current market is showing signs of instability. A prime example is a six-bedroom property on Red Barn Road. Initially listed in October 2020 for $2.995 million, its price has plummeted to $1.7 million after four reductions. Despite the lower price, the home remains unsold for seven months, highlighting the growing wariness among buyers.
Real estate agent John Arena attributes the delay to foreclosure complications, yet Shelly Lockwood of Advisors Living offers a graver perspective: the very beach the house stands on is eroding. She warns potential buyers that the home may not last a decade, and only those who can afford to lose their investment should consider purchasing such properties.
Coastal Erosion: A Growing Threat
This issue isn't unique to Nantucket. Coastal erosion is impacting beachfront properties across the United States. From the Outer Banks in North Carolina to Dana Point in California and Dauphin Island in Alabama, oceanfront homes are increasingly at risk of being claimed by the sea.
On Nantucket, list prices have dropped by 5.8% year over year, with a median price now at $4.595 million. Rising inventory and hesitant buyers indicate a shifting market. As Hannah Jones, an economist at Realtor.com, notes, properties in areas prone to climate-related risks are spending more time on the market and often sell for lower prices. This trend suggests that buyers are becoming more cautious and expect prices to reflect the potential hazards.
Real-Life Examples
Recent sales on Nantucket underscore these risks. A waterfront home on Sheep Pond Road listed for $2.3 million in late 2023 sold for just $600,000 in early 2024 after a storm eroded 90 feet of frontage. The buyer, Brendan Maddigan, accepted the erosion as a "losing battle" but decided the short-term enjoyment was worth the gamble.
Lockwood believes this mindset—accepting the inevitable loss but valuing the immediate pleasure—may become more common among buyers of at-risk properties. However, she cautions that such investments should only be made by those who can financially withstand the potential losses.
The State of the Coast Report
The Trustees of Reservations recently released a comprehensive report on the state of the coast for Martha's Vineyard and Nantucket, revealing stark projections for the future. By 2050, more than 3,500 structures on these islands may be impacted by storm flooding, and up to 3,000 acres of coastline are at risk of eroding. This report highlights the severe implications of climate change-driven sea level rise and storm flooding.
Key findings from the report include:
- Since the late 1800s, Martha's Vineyard and Nantucket have lost almost 3,300 acres of coastal areas due to erosion.
- FEMA modeling predicts that nearly 800 structures are at risk of being lost to erosion by 2050, with a total parcel value exceeding $4.6 billion.
- Over 3,500 structures on the islands may be flooded during a 10-year storm in 2050.
- Norton Point, a 2.5-mile barrier beach on Martha's Vineyard, may be open ocean by 2070, having already migrated more than 1,500 feet since 1897.
These projections underscore the urgency for comprehensive climate resiliency plans and collaborative efforts to mitigate these risks.
A Grim Example: The Wacks' Home on Chappaquiddick
The outcome of Jerry and Sue Wacks' home on Chappaquiddick illustrates the rapid and relentless nature of coastal erosion. Their home, built in 1984, was demolished in February of 2023. Despite their efforts to save the property, including attempts to install sandbags and seek permission for seawall construction, the home didn't make it and had to be taken down to prevent environmental hazards.
This case exemplifies the harsh reality faced by many coastal homeowners: no matter the measures taken, nature often prevails. The Wacks' situation is a poignant reminder of the potential financial and emotional toll of owning oceanfront property in erosion-prone areas.
Moving Forward: Adaptation and Resilience
The Trustees' report emphasizes the need for bold, collaborative actions to address the challenges of coastal erosion and climate change. Proposed measures include elevating structures, building resilient connections, optimizing harbor planning, and investing in ecological preservation and restoration. These efforts require cooperation among local, state, and federal agencies and significant financial investment.
As U.S. Senator Edward Markey notes, addressing climate change is crucial for protecting public health, safety, and the economy, as well as preserving the unique coastal habitats of Nantucket and Martha's Vineyard. The report's findings call for immediate and decisive action to avoid the worst impacts of climate change and safeguard these irreplaceable natural treasures.
A Smart Purchase: 8 Snail Road, Chilmark
Not all real estate investments on these islands come with such high risks. 8 Snail Road in Chilmark stands out as an example of a smart purchase. This property boasts stunning water views from a commanding location well away from flood zones and areas in danger of erosion. Buyers can enjoy the beauty and tranquility of island living by choosing properties like this without the looming threat of losing their investment in the sea.
Conclusion
Buying a home on Nantucket or Martha's Vineyard near the ocean offers undeniable charm but also comes with significant risks. Coastal erosion is a constant and unpredictable threat, potentially leading to financial losses and challenging market conditions. Prospective buyers must weigh the pleasures of oceanfront living against the possibility of losing their investment. As the real estate market adjusts to these realities, a cautious and informed approach is essential for those considering a slice of these idyllic, yet impermanent, shorelines. Properties like 8 Snail Road in Chilmark demonstrate that with careful selection, it is possible to find a balance between enjoying ocean views and ensuring long-term security.
If you're seeking a buyer's agent with years of experience selling properties across Martha's Vineyard, reach out to the O'Hanlon Group today. We are always available for consultations and are happy to educate our clients about the various areas of the Island, including the benefits and drawbacks each may present. For those interested in Nantucket, we have a Compass real estate referral partner on the Island with years of experience there and would be happy to connect you.
