Bailing out Nantucket one estate at a time: a first person tale

This could have been mine.

This could have been mine.

On a winding road, down a white shell driveway, sits a rambling gray-shingled home with a view of the harbor, where beige lounge chairs ring an amoeba-shaped swimming pool and the living room is filled with pristinely white sofas, plumped, pillowed — ready for the next owners.

via New York Times, “Living with Less”

For a brief moment, I thought that one of those owners could end up being me and a consortium of family members I assembled to bid in an auction unusual not just by Nantucket standards — but by almost any standards: the seller must accept any bid, no matter how low.

But before I share my personal adventure in high-end vacation real estate I would like you to meet the owner of the property, a man the New York Times deemed exemplary of  its high-end recession era series “Living with Less:” Paul C. Steinfurth.

Steinfurth is a rather private Miami real estate executive with properties aplenty in Nantucket and the southeast: rental units, storage places, a beauty salon — nothing the NYTimes would typically bother writing about. But it’s a living. According to the Times account of hard times in Nantucket, Steinfurth bought the unwanted 5-bedroom home, known as The Second Glance, for $5.4 million in 2004, just as the real estate market was bubbling up.

But cyberspace reveals very little else about the well-tanned man staring back at you from the Times photo gallery. In fact, that’s what’s so striking: Steinfurth is pretty low key. He is not emblazoning his name on self-storage warehouses or any of the numerous real estate companies he owns. He travels below the gossip radar warranting nary a mention in the Times 2005 feature “Old Nantucket Warily Meets the New,” an exhaustive piece detailing the fault lines between New England blue bloods and the brash, much better-heeled newcomers like Google CEO Eric Schmidt and former Goldman Sachs investment banker Rick Sherlund.

Living With Less brings us back to the ocean-sprayed playground of the rich and hyper-rich, as the Times called its residents in 2005, and to the marketing genius of Grand Estates Auction, which is running the current sale of The Second Glance.

Once practically invisible, Steinfurth has suddenly become a selective publicity hound. In interviews with both the Times and Nantucket Independent, he maintains that he’s not suffering as such despite owning a property that has sat on the market for a year. No sweat marks on the white couches. He’s simply not all that interested in carrying costs for two homes on Nantucket and auction is the most expedient form of disposing of the property. In other words, the Steinfurths will not be spending the dog days of summer in Florida, a fact that doesn’t become clear until the very end of the Living With Less story when we learn that  they have bought a home for $7.8 million on Nantucket. The Second Glance, Steinfurth says, wasn’t big enough for him, his children and grandchildren.

Aha! I think. It is probably big enough for our clan; we don’t mind doubling up.

“Honey, our ship has come in!”

I run into the kitchen. My husband looks up, ready for something really wacky or really funny. In our household, “honey” is strictly ironic.

I explain that either I have found the property we have never dreamed of or the NYT is fish wrap. After 15 years of marriage my long-suffering husband nods along as I explain how we could possibly afford a property that had just been on the market for $6.9 million.

I say: The Times says nothing is moving on Nantucket. After a little further digging, I discover that 10% of sales come from foreclosures, up from 1% a year earlier. Both sales and rentals are down by about 25%  And then there’s this question, why would a real estate investor give away property? Generosity? I can think of only one four-letter word to explain it: C-A-S-H. Or more explicitly, not enough of it. From the Nantucket Independent, Mr. Cool philosophizes: “If it sells for a million, somebody will be getting a hell of a buy. I only need one large house on Nantucket.”

In Yiddish, the great language of all practical philosophers,  there’s an expression that says when  one door closes, another opens. Who better to walk through the door of the Second Glance than my family?  Today at 2 p.m., it goes up for auction.  I can get a round-trip ticket to the island for about $400.

I begin dialing for dollars like a hedge-fund start up manager. First my brother.

I start rambling: Nantucket will get much worse before it gets better. It has a hideous blend of old money and hot money — think New York Times execs versus new media start-ups. One is simply dying and the other is dying for cash.(Actually, NYTimes honchos are on Martha’s Vineyard. If Nantucket doesn’t work out, maybe we’ll look there.)

I call my mother and joke: Treasury has run out of money. Let’s do the patriotic thing and bail out the Second Glance.

I call my cousin Bill, the real estate cousin maven. He asks: How much cash does the auction company expect you to have in hand at the auction?

$75,000.

Hmm. Usually that means the auctioneer is expecting a price of $750,000.

My heart sinks. More than our consortium was counting on (I viewed Steinfurth’s million-dollar comment as a wish), and far less than Stacy Kirk, president of Grand Estates Auction, had stated when I called for the details on how to bid. She said it wouldn’t go for less than $3 million or $3.5 million. Local investors would certainly snap it up at those bargain prices.

How could you know that, I think to myself. The front page of The Nantucket Independent is dominated by bankruptcy stories. The Times draws a picture of a market that is dead, dead, dead. Honey, I think to myself,  if there’s no bid I can tell you we will establish a new floor and Nantucket real estate is about to lose a zero — and not from its zip code.

A house nearby recently sold for $10.2 million, she informs me in an explanation clearly designed to save me the $400 airfare to 6 Juniper Hill Lane. She sends me to trulia.com, which confirms the sale.

I study the auction brochure:

The Living Room is a wonderful place for family and friends to gather. This large space, with the elevated ceiling height of almost 10 feet, has a wonderful open feel with multiple seating areas making this an ideal place for many people to be doing various activities: reading, playing games, watching TV on the built in 42” plasma, or just to sit by the fire and tell stories of the most recent sailing adventure.

via Grand Estates Auction

Cousin Bill warns me: Family vacation homes don’t always work out so well. And we are now contending with a house that may well benefit from auction fever.

Auction fever is a form of brain death suffered by buyers who don’t know when to walk away. It often follows publicity such as stories in the national dying media that have been picked up in scores of other newspapers and blogs (just Google it). In Baltimore, my home town, auction fever has even infected buyers during the current real estate downturn. Cousin Bill recently accompanied a buyer to a house that was in such a state of disrepair that anyone who entered had to sign a waiver. The roof was about to cave in. He warned his client not to bid more than $10,000. The house went for $92,000.

Alas, Cousin Bill is worth listening to. You and your husband are not house people, he adds. Cousin Bill is being nice. If a roof springs a leak or a mouse threatens our serenity we might call 911 if we can’t call a superintendent. How about a nice condo?

I begin to see the flaws in the house, which I had already re-named in my mind’s eye The Compound Interest.

Take that amoeba-shaped pool. My husband and I are lap swimmers: we’d end up head-butting one another while putting in our morning strokes.

And those 42″ plasma TVs (more than one in the house) have got to go. I want my boys catching fireflies at night not videogame demons.

Then there are the custom fitted rugs and designer drapes: One drop of chocolate ice cream on those wool fibers and I lose all the relaxation a vacation home should bring.

And finally I begin to wonder: Can a mix of Democrats and Republicans, gluten-free priests and wheat wallowers really relax all together? What about my kids who begin chirping with summer sunrise and the empty-nesters and teen-agers who prefer to swing their feet over the edge of their beds around lunchtime?

In the end, I reluctantly decide to abandon the Second Glance and join the ranks of those opting to Live With Less. In a recession, we must all make sacrifices — and sometimes it’s better to take a second glance than to own one.

Photo courtesy Grand Estates Auction

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2 thoughts on “Bailing out Nantucket one estate at a time: a first person tale

  1. If you have to ask how much, you shouldn’t bid…. And to think there are no bargains in Nantucket realty.

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