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.
Subscribe
