"John has been at his house over New Year's running along the street for exercise and sitting out by his pool," a resident on the island tells PEOPLE. "But he was all alone."
Located between Savannah, Ga., and Hilton Head, SC, Daufuskie Island has become a favorite vacation spot for the singer and his wife Elaine, who own other property in the area as well. The beautiful white, gated home has a grand backyard and infinity pool. The front of the home looks like a church with a minimalist, modern decor.
"John and Elaine spent a great deal of time in the house over the summer and they looked to be very happy," the resident tells PEOPLE. "They both love the area, especially Savannah. We were surprised to hear of the split as Elaine has taken good care of John since he had his heart attack [in 1994]."
While Mellencamp, 59, has been touring with a new album, Elaine has devoted quite a bit of time to local charity work in Bloomington, Ind., near their main home on Lake Monroe. In addition to work with Indiana's historic society, she is also involved with a school for dyslexic kids in Bloomington.
"Everyone is impressed with the amount of work Elaine does for others," a source in Indiana tells PEOPLE. "She shares John's interest in his Midwestern roots and tries to improve the lives of others. They seemed like such a great couple."