Last year, after reading a story about the depressed vacation home market in Nantucket, I considered bidding on a mega-property up for absolute auction — no minimum bid. Little did I know that the Colgan family in New Jersey would also respond as I did too the New York Times piece. The tale of their purchase of a distressed property is a telling anecdote for Nantucket real estate, which I write about more deeply in a lead story for Fortune.com today and in a brief item last week for Barron’s.
Everyone likes to write about the hot properties. And my stories touch on some trophy properties — like the recent contract for the estate of ex-Goldman Sachs honcho Jon Winkelried. (The property was reportedly signed for close to $29 million, an island record.) But the Fortune.com feature focuses on the year-round residents, who are still picking up the pieces from Wall Street real estate’s binge in the first part of the decade.
The family consortium I assembled to bid on the Second Glance never even got to first base last year; the auctioneer convinced us that the bargains I envisioned were illusory. And in the case of that one property, she was right. It went for more than $5 million. (You can read those stories here and here). But the Colgans were much shrewder and dogged bargain hunters than we were. To think, we could have been neighbors.
This item on the backstory to Nantucket home sales wouldn’t be complete without a shout out to former T/S contributor Paul Smalera, now a senior editor at Fortune.com. He was a pleasure to work with.
Here’s the story of two worlds on Nantucket — Wall Street, where fortunes are turning around fast, and everyone else.
FORTUNE — In the past decade, Nantucket Island has served as a barometer for the fortunes of Wall Street. The glass cracked after years of unsustainable pressures. But almost by magic, the barometer is rising once more even as something new and unexpected has come to the summer paradise: foreclosures, short sales, failed auctions, and a skinnier municipal budget. And while financiers can cut and run, it’s the locals who are being hardest hit.
“It’s two different markets,” says Brian Sullivan, a broker for Maury People Sothebys. There’s Wall Street, and everyone else. You can see that on Yahoo’s;s real estate listing for distressed properties on Nantucket: nearly two-thirds are listed for under $1 million, the price sector dominated by the island’s 12,000 year-round residents. But the banks have basically turned their backs on small borrowers, so anyone who does want to buy will have a hard time getting a loan. “They want to lend to people borrowing $1.5 million and up,” says Sullivan.