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Old 10-19-2005, 09:54 AM   #7
Mink Islander
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Default Island Property Values

Interesting to note that the property next to mine has been on the market for about a year and during that time has seen its price reduced from a whopping $619,900 originally down to a more realistic (but still high IMHO) $510,000. While the property has nice views and technically a lot of frontage (albeit on a curve), it's nonetheless on a very heavily trafficked spot in the summer and the house is a 40ish year old kit house built on one side of the lot (and close to an adjacent home) and in need of more than a little TLC. Not quite a tear-down, but not something you'd easily shell out a lot of $$ for either. Hard to see how the value of the land, the state approved septic, the marginal docks and the 40 yr old poorly sited kit house add up to a value north of $500,000. I'll be surprised if it sells above the low $400's but hey, I'm no realtor! The current owner paid something under $200K for the property back in 1999 or 2000 and has done little to nothing in terms of maintenance/improvements in the meantime....

I've long believed we'd reach something of a ceiling for island property values at some point. Seasonal use, challenges of island living including maintenance, etc. limit the population that will buy it. You simply can't set its value at some discount to where mainland property values are selling, which is what it seems some sellers/realtors try to do.

Island property owners used to be mostly traditional working folks who bought island property because it was affordable. Nowadays, unless you've have a family property that's been owned for a long time, it's hard to imagine an average joe owning even a shack on an island, what with the acquisition cost and the property taxes. Most folks that have the money to spend north of $500M on a 2nd home, probably want to be able to use it more than 5 months out of the year. Very narrow market for island dwellers at higher prices indeed! And that's a GOOD THING!
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