Nantucket’s housing crisis is often framed around people trying to move onto the island. Workers struggle to find rentals. Employers scramble to secure housing for staff. Home prices remain among the highest in the United States.

 

But, pressure is building inside the island’s existing neighborhoods. Some longtime residents say the rising value of their homes — while appearing beneficial on paper — is making it increasingly difficult to afford the costs of remaining in those homes.

 

The issue is not just the price of buying property on Nantucket. It is the growing cost of holding onto property already owned.

 

Rising Values, Rising Carrying Costs

Home values on Nantucket have increased dramatically over the past two decades. Census data for the 2020–2024 period places the median value of owner-occupied homes at approximately $1.59 million. 

 

More recent market analysis suggests the typical sale price has climbed far beyond that level. A 2025 housing assessment estimated the median home sale price reached roughly $3.73 million in 2024. Those valuations have created significant household wealth for many property owners. But they also carry financial consequences.

 

Property taxes in Massachusetts are calculated by multiplying the assessed value of a property by the municipal tax rate per $1,000 of value. Nantucket’s residential tax rate remains relatively low compared with most Massachusetts communities — about $3.12 per $1,000 of assessed value for fiscal year 2026.

 

Yet, because home values have increased so dramatically, tax bills have climbed even while the tax rate itself has remained modest.

 

A property assessed at $3 million, for example, would produce an annual property tax bill of roughly $9,300 under the current rate. Homes assessed above $4 million could face annual tax obligations exceeding $12,000 to $15,000, depending on exemptions.

 

For families who purchased their homes decades ago — when island property values were far lower — those increases can arrive much faster than household incomes rise.

 

Asset Rich, Cash Poor

Economists describe this dynamic as “asset rich, cash poor.” Homeowners may technically hold substantial wealth through their property value, but their ability to pay ongoing expenses depends on income rather than asset appreciation.

 

For year-round Nantucket residents working in local industries — construction, municipal services, healthcare, fishing, retail, hospitality — incomes often reflect the island’s labor market rather than the global demand driving Nantucket real estate.

 

The result is a growing disconnect between housing wealth and household income. For some residents, the value of their home now far exceeds what their income could support if they were trying to purchase the same property today.

 

Insurance Costs Rising Alongside Property Values

Property taxes are only one part of the equation. Insurance premiums have also risen across many coastal communities, including Nantucket. Policies covering wind damage, flood exposure, and full replacement costs have become significantly more expensive as insurers reassess coastal risk and construction costs increase.

 

Replacement cost estimates for Nantucket homes have risen sharply due to the island’s high construction costs, labor shortages, and supply chain issues. That means homeowners can face higher insurance premiums even if they have no intention of selling their property.

 

In many cases, taxes, insurance, and maintenance costs rise simultaneously.

 

The Residential Tax Exemption

Nantucket does provide a policy designed to ease some of the pressure on year-round residents. The town currently offers a Residential Tax Exemption, which allows qualifying year-round homeowners to reduce the taxable value of their primary residence by approximately 25 percent.

 

The exemption shifts a portion of the tax burden toward second-home properties and seasonal residents. For qualifying homeowners, the exemption can reduce annual tax bills by several thousand dollars. But it does not fully offset the impact of rapidly increasing property valuations.

 

And it does not apply to all property owners.

 

A Generational Question

The rising cost of holding property has created a question that increasingly surfaces in local housing discussions: Can families who already own homes on Nantucket continue to afford to keep them?

 

For many longtime residents, selling a property may produce substantial financial gain. But selling also means leaving the island housing market entirely, since buying another home locally is often impossible at current prices.

 

That creates a difficult choice.

 

Rising valuations make Nantucket property more valuable than ever. But for some residents, those same valuations increase the cost of staying in place.

 

A Different Kind of Housing Pressure

Much of the public conversation around Nantucket housing focuses on new construction, rental supply, and workforce housing. Those issues remain central.

 

But the observation raised by many residents points to another dimension of the housing challenge — the financial pressure on people who already live here.

 

If housing costs continue to rise faster than local incomes, the island’s housing pressures may increasingly affect not only those trying to move in, but also some of the families who have lived here for generations.

 

In that sense, Nantucket’s housing story may be evolving from a question of who can come to the island to a question of who can remain.

See complimentary story,  "Plenty of Work, But at What Cost?"

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- Carlos Mendoza

Contributor

3/14/26