FICRY

It is clear from the plethora of bad news about the real estate situation across the United States that no place and no island, is safe from the effects of our recession.  The latest tale of riches to rags comes from The New York Times online front page, reporting on the New England luxury island, Nantucket.  No matter hot beautiful, serene, and isolated from everything poor or low-brow, Nantucket is facing a serious downturn in the real estate market. There are 600 properties for sale on the island, approximately 6% of all the properties on the island, but nothing is selling.

The island serves as a vacation destination for many of the country’s wealthiest families including Eric E. Schmidt, chief executive of Google, and his wife, Wendy; General Electric’s former chief executive, Jack Welch; David M. Rubinstein, of the Carlyle Group, a private equity firm; along with hundreds of lesser-known money players at other prominent investment and private equity firms.

Nantucket recently built a new golf club for those left out of the prestigious Sankaty Head Golf Club, yet at the opening this year, the roster was only 78% full.

Some stories include “…Mark Smith, a yacht delivery captain who sailed into Nantucket from Annapolis, Md., last week, and who had visited the island before, said, “The marina looks like a ghost town this year and even the moorings are light.”

“As Leah Bayer, her blond hair tucked under a baseball cap, pulled tins laden with fudge from the oven at her store, Aunt Leah’s Fudge Shop, on the edge of the marina, she worried about business. “This has been the worst June I have ever seen and I have been here since the 1960s,” she said. “We used to open at 6 a.m. because the marina was busy, but we didn’t open so early this year. It has been completely empty. I just want to pay my rent and my payroll.” If business does not start improving soon, she added, “Everybody will hit the panic button.”

One real estate broker on the island stated, “The market value of the real estate on the island was about $20 billion in 2008. Now it is about $14 billion. This is much worse than 1987. That decline came from the savings and loan crisis and it was more contained. This is the stock market and it affects everybody’s wealth.”