Cape Cod Market conditions for late 2011

Our Cape Cod market continues to show strength in the last 2 quarters, as Buyers overcame concerns about economy and snapped up the best available properties. Cape Cod sales volume in 2011 is down about 10% compared to 2010 and median price dropped 2% for the same period. This is reasonable for the current situation, and is good considering 2010 sales were buoyed by the government tax incentives. 2011 has had no artificial buying stimuli, so the sales this year have been truly free market.

Many Buyers and Sellers recognize that the ‘bottom’ is here-especially when calculating the cost to purchase-with interest rates at historic lows. The Second home/vacation buyers seem to be aware of this and have made a significant contribution to real estate sales this year. We have seen significant interest in beach properties, village properties in Cotuit, Osterville Centerville, and Marstons Mills

Pricing and preparing a home for sale has never been more crucial-Buyers will buy the ‘good’ properties-priced well and prepped for showing. Sellers realize that condition sells and pricing to the market is key to success.

Consumer confidence appears to be growing slowly, and this will likely increase the desire to make the investments that have been postponed due to uncertainty and negative news.

2012 should be a year of gradual improvement in the Cape Cod real estate market, as interest rates should remain low and prices for properties will have hit bottom and may start to rise by Mid Year as demand reduces the inventory backlog. We don’t expect prices to rise much in the next year, but more desirable locations and appropriately marketed properties could exceed this modest expectation.z

Until you can return to the Cape (or even better buy your vacation home here) enjoy this scene overlooking Nauset Marsh from Fort Hill area of Cape Cod National Seashore on a glorious November day

I was asked to comment on the ‘holiday homes’ market for a Boston newspaper article to be published. I assembled statistics and snapshots of the market for that interview and here are my thoughts.

The short report is that the Cape Cod real estate market has been active in the First 3 months of 2011. First time buyers are still competing with second home ‘holiday’ home buyers for the properties under $300,000-which is the fastest moving segment, with only a 5 month ‘supply’ at this point-almost a balanced market on Cape Cod!

Sellers are listing homes, and they need to be ‘prettied up’ to sell successfully. We see that there is a significant difference in the success of selling a mint condition home vs. one that shows even a little ‘tired’. Price is of course a critical factor, but buyers are strongly gravitating toward homes that are most updated, clean and well maintained.

Buyers are buying on Cape Cod, but the pace slowed since last year at this time, when the Tax Credits were stimulating buying activity for First Time and ‘move up’ (or down) buyers. Our sales volume for Cape Cod is off by 40% from first quarter of 2010, BUT median prices are up by 5.7%. Because pending sales are up so significantly, I am confident that this volume deficit will be greatly reduced when May and June sales are reported.

Are prices going up? Not at this time-the median price increase is attributable, I believe, to the huge percentage of sales in the lower tier of pricing (below $200,000) in 2010. Simply said, not much in the more expensive price range (over $500,000) was selling at all on Cape Cod in early 2010! In 2011, we have fewer homes under $200,00 to sell.

What happens from here? Mint condition, well priced homes will continue to sell; homes needing maintenance and price adjustments will be shown and shown-to the frustration of Sellers and their agents. Higher interest rates are pressing at the gate, and I am very concerned about the impact that a point or more interest rate jump will have on Buyers’ ability and willingness to buy. A double dip is a strong possibility if this happens, as the Cape Cod housing recovery is fragile and spotty.

Where are the ‘hot spots?’ From ‘pending sales’ perspective, Towns with large second home opportunities seem to be leading. This doesn’t mean all pending sales are second homes, but it is an indicator to support the observation that second home (holiday home) buyers are heavily participating in our market.

Winter still has a grip here-although we only received about 4-6 inches of snow, I like to think that by mid-February, the worst of Winter is behind us. The snow is melting fast this time, and with it I hope that buyers realize their opportunities to take of advantage of the Federal Tax Credit for both First Time Buyers and qualified Repeat Buyers are running out soon.

In Cotuit and Marstons Mills, we have a good selection of properties for sale in many price ranges. Last year at this time I had several listings in Cotuit, 3 of which sold in 2009, and right now I have only 1. Cotuit seems to be 'hot' right now-there are still options, but the well priced listings and attractive opportunities to live in this delightful seaside village are in short supply. A quick visit to my website www.onestophomes.com (click onto 'Express Search') will show you what is currently for sale in our Cape Cod Multiple Listing Service.

I have 4 listings of Marstons Mills real estate for sale right now-wide price ranges, and 3 are Waterfront properties. Living on the water seems to be everyone's dream of the perfect piece of Cape Cod real estate. What is special about Marstons Mills waterfront properties is that there are beautiful clean freshwater ponds to enjoy both the view and the water activities (swimming, paddling in canoes or kayaks, small craft boating and sailing, and this year ice fishing or skating). There is also Saltwater front property available, too. On inlets, estuaries, deepwater coves and bays-again with pricing to suit everyone's budget for Cape Cod real estate investment.

If you are not aware of the soon to expire Tax Credit opportunity, please view my earlier post with a link to a quick explanation to determine if you might qualify.

With mortgage interests rates likely to rise soon, and buying opportunities galore, Sellers are anxious to see their Cape Cod real estate sell this Spring. For Cape Cod Real Estate Buyers, if you buy now, you will be a homeowner in time for the daffodils and other Spring things here on Cape Cod-and particularly my own personal favorite places-Marstons Mills and Cotuit.

 If you would like to know more about this hidden secrets here on Cape Cod, visit my website at www.onestophomes.com and view information about these villages, and get to know the Mid Cape area, the Town of Barnstable and the activities we enjoy most living here.

Deb

 Spring daffodils on Cape Cod

 Kayaking on Cotuit Bay