Ned Chatelain

April 3 COVID-19 Update

Here at Chatelain Real Estate we are taking the current social distancing guidelines very seriously. We've put the following services in place to make sure we are able to keep everyone safe while also providing essential services to our clients.

If you have a transaction in progress, we have the capability of disclosing all documents for electronic signature - all from the comfort of your home.  All closing functions (lending, attorney services, etc...) are designated as essential by the governor, so there should not be any major disruption to your closing.

If you are a buyer, please don't hesitate to call and ask for a remote viewing of any properties you may be interested in.  We'll be happy to set up a video conference link and conduct a live 'virtual showing' at your convenience.  

For short-term renters, we have revised our refund policy to allow for a full refund of any booking up to 30 days before occupancy.  So book now - we're all going to need a vacation when this is over.

And the office may be closed, but we aren't letting the cobwebs grow - during the shut down we are expanding into an adjacent suite to more than double our current office space - when things get back to normal, we'll look forward to seeing you at our new and improved digs!

As always, if you have questions about how COVID-19 is affecting the market, your search for a home, or the timeline for selling your current home, please don't hesitate to ask.  We are here to help however we can.

Until then, stay safe.

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    Cape Cod Affordable Housing Update | Feb 2020

    We get a lot of questions from folks interested in the issue of housing affordability here on the Cape, so we thought we’d give a quick overview of the issue and some of the potential solutions being discussed.  

    What exactly is meant by “affordable”?  The benchmark for housing affordability is 30% of a family’s income.  Here on Cape, the Area Median income (AMI) from 2014-2018 (per census) was $70,621 (see here for census data).  During the same interval the median home sale price was $367,700.  The total monthly payment on a median priced home comes to approximately 28% of median income if the buyer has a traditional 20% down payment (jump to our math below).

    So with a good-sized down payment, the median priced home can be purchased by the median-earning household.  Good news so far.  Now let’s break down housing affordability for households earning below median income.  Take a look at the graph of residential price distribution in 2019.  Here we matched home prices to the income brackets in the next graph to determine how many homes are available to homes in their income price range.  Notice the steep decline in available homes below median income affordability of $367k.  Now compare that to the graph of income distribution.  Notice the mis-match.  If your household earns 68% AMI you may be only 32% away from median in terms of income, but 32% less than median home value equates to $250k, and there are almost no homes available in that price bracket.  

    In addition, these graphs don’t account for the quality of the housing at each price point.  A good-quality ‘move in’ condition home can be found around the median price point of $367,000.  However, once you get down to about the $300,000 mark it is extremely challenging to find a home that is not in need of significant repairs or upgrades before it is ready for occupancy.  (If we could graph housing quality against price point, it would show an even sharper peak than the price graph).  On the one hand, this presents an opportunity to a buyer who is willing to buy a fixer upper for a low purchase price, bang nails after work and build equity.  However, it also means that same buyer must budget for repairs in addition to down payment, which further reduces the price of the home they can afford.  And for the less hands-on households, it means a home purchase is a nonstarter.

    Ok, so it is a challenge for a household earning less than AMI to buy a home, so they decide to rent and save up to buy down the line.  Good plan – but let’s take a look at rental market first. Per HUD guidelines, fair market rent for a 3 bedroom house in Barnstable county is $1,919/month (reference here).  This is $264/month more than the same household would be paying for a median priced home of their own.  Why the mis-match? Barnstable County has a 1% vacancy rate for rentals, which represents a huge shortage – a healthy rate would be 7%.  This shortage translates to high demand, which translates to – you guessed it, high prices. 

    So let’s circle back to the median home value calculation above, which assumed that our median earning family had a 20% downpayment to apply to their median-priced home.  If a renting household is paying close to $300 (16%) per month more to rent than to own, it can be a real challenge to save enough money to put towards a downpayment.  They are stuck in a loop of paying too much for rent, while also pricing themselves out of the possibility of homeownership.

    So what is the solution?  There is no silver bullet, but bringing more rental units online is a big part of the answer.  One tool that has gained a lot of traction on the Cape is easing prohibitions on accessory apartments.  This is a minor change which can go a long way to bringing more small, organically affordable, market rate units into the market place.  Other initiatives include property tax incentives for landlords of long-term rentals, form-based code zoning reform to encourage multi-use and multi-family development, and raising density in areas where the infrastructure already exists to service a higher density of homes.  A lot of innovative work is being done to help restore a healthy, balanced real estate market to the Cape (and the nation).  It’s a topic that is near and dear to our hearts – if you ever have questions, please don’t hesitate to reach out.  We’d be happy to discuss in greater detail.


    Calculations

    Area Median income 2014-2018 (per census): $70,621
        • Average Median home price 2014-2018 (per CCI board of realtors): $367,700

    At today's conforming interest rate of 3.375% (CC5 2.06.2020) a mortgage on a $367,700 home looks like this:

        • 20% Down payment = $73,540
        • Loan Amount = $294,160
        • Principal/Interest monthly payment = $1,300.47
        • Taxes = $245 (assuming an imaginary town with 8/1000 mil rate and assessed value equal to purchase price {market value is typically actually 120%-124% of assessment for most towns in the mid-Cape})
        • Insurance = ~$110

    -----------------------------------------------------------------------

    Total Monthly Payment Estimate = $1,655.47

    Sounds of Summer

    Summer is in full swing here on the Cape.  And along with the gorgeous weather and crowds of happy beachgoers, the lively outdoor music scene is at its height!  

    Nearly every public outdoor space in the mid-Cape area hosts its own Summer concert series - the Dennis Port village green alone has twice-weekly free concerts, and Drummer Boy Park, Brooks Park, and the Dennis Village Green on 6A all host their own series. 

    So when you get off the beach, don't head right back to the cottage - swing by a park or green somewhere, pull up a beach chair, and enjoy the sounds of summer!

     

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      CHANGE COMING TO REAL ESTATE CLOSINGS

      Changes are coming on October 3, 2015 to real estate closing procedures and to the closing forms. These changes will impact buyers and sellers.  Extra time may be necessary between a deal being struck and the closing date in order to meet the new regulations.  Both buyers and sellers will be required to present documents requested in a very timely fashion. Otherwise, closings will be delayed. 

      In the past, estimates were given to buyers for their closing costs. Some wiggle room was allowed on those estimates.  Beginning in October, lenders will be accountable to the exact charges listed on the forms presented to buyers in the initial mortgage process and to come within 10% on many of the other charges.  Additionally, there will be no changes allowed to closing documents at the closing table. 

      So, everyone involved with closings will have to provide accurate documentation in a timely manner from the get-go in order for closing delays to be avoided.

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        Tough weather makes for a tough market

        Whether you are buying or selling a home this winter, you are no doubt frustrated by the slow market.  February usually marks the beginning of the Cape's busy spring market, but because of record snowfalls throughout the region (and more coming all the time), we have yet to see the usual uptick.

        The effects of the snows are shot through the entire market: sellers are delaying putting their homes on the market because of the difficulty of keeping their homes clean and ready to show; buyers are unable to make appointments to see homes because of the unpredicable weather; those buyers who do have the desire to see homes are struggling to actually make appointments because many homes here on the Cape are not plowed or shovelled out; if you already have a transaction in the works it can be difficult or impossible to inspect basements, crawl spaces, septic systems, and more because of the snow.

        All these factors have conspired to make February a very challenging month for the real estate industry.  However, with spring right around the corner, don't despair!  With interest rates still very low, a balanced market, and a predicted surge of inventory, we expect March and April to be great months to buy or sell a home.  

         

         

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          Things to do on Cape This Snowy Weekend

          With another 8-10 inches of snow coming this weekend, Cape Codders are buckling up and sharpening their snowshovels. But let's not forget that the Cape knows how to recreate in the winter as well as in the summer!  Below are a few ideas from the Cape Cod Times for activities to keep you out of the cold on this stormy February weekend.  Enjoy!

          February 14, 2015 - Happy Valentine's Day!

          Turtle love times two over Valentine weekend Saturday, 

          The Wellfleet Bay Wildlife Sanctuary will offer two distinct programs this weekend. On Saturday, children can become turtle researchers for a day and find out how stranded turtles are rescued, how to collect data, and how rehabilitated turtles are readied for a return to the water. On Sunday, sanctuary director Bob Prescott will present "Shellshocked: Reflections on the 2014 Sea Turtle Stranding Season," a review of the season's highlights and possible reasons for the huge increase in turtle strandings.

          When:  10 a.m. to noon Saturday; 1 to 2:30 p.m. Sunday
          Where:  Wellfleet Bay Wildlife Sanctuary, 291 State Highway (Route 6), South Wellfleet
          Admission:  Saturday: $9; $7 for members; Sunday: $12; $10 for members
          Information:  www.massaudubon.org or 508-349-2615

          Rhapsody in Bluegrass concert

          The Cape Symphony and the Annie Moses Band will join together for a musical tour of American music, featuring songs associated with each region of the country. Including music from New England, jazz from the Deep South, bluegrass from Kentucky and then music of Wild West, the concert will feature such well-known songs as "Summertime," "Shenandoah" and "Simple Gifts."

          When:  3 and 7:30 p.m. Saturday; 3 p.m. Sunday
          Where:  Barnstable High School Performing Arts Center, 744 West Main St.
          Tickets:  $30 to $69 (shows are nearly sold out)
          Information:  www.capesymphony.org or 508-362-1111

          Sunday, February 15

          Astronomy talk covers past, present and future

          The Cape Cod Museum of Natural History will host speaker Chuck Kunesh's presentation called "Planet Quest: The Search for Another Earth." His talk will cover our own solar system; what people from ancient times through the 20th century thought about the possibility of other solar systems; and astronomers' plans to find Earth-like planets and to look for evidence of life on those planets.

          When:  1 p.m. Sunday
          Where:  Cape Cod Museum of Natural History, 869 Main St. (Route 6A), Brewster
          Admission:  Free with museum admission (adults: $10; seniors: $7; children ages 3 to 12: $5; free for museum members, children under 3, Massachusetts Teachers Assoc. members and active duty military and families with current military I.D.)
          Information:  www.ccmnh.org or 508-896-3867, ext.133

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            Winter home ownership hazards

            This week's powerful Nor'easter has caused many second homeowners to bite their nails wondering if their Cape house survived the storm unscathed.  If you are in this category, don't forget that here at the Cape Cod Chatelains we provide a full-service realty firm, including property management.  Our weekly and post-storm inspections routinely help our clients to mitigate potentially disastrous circumstances.  Just yesterday we discovered that the furnace vent at one of the homes we manage had been covered by snow during the storm.  Sensing the blockage, the furnace had gone into emergency shutdown mode.  The temperature in the home was 42 degrees upon our arrival.  If we had not been there to check the house, unblock the vent, and allow the furnace to cycle back on, the home (which was built last year) could have sustained catastrophic damage due to a broken pipe.  Instead, a disaster was converted to a minor irritation.

            If you own a second home or investment property on the Cape which is vacant for long periods, we strongly recommend engaging a property manager to help manage the risk of leaving your home unattended.  We would be happy to answer your questions at any time.

             

            In the meantime, be safe and enjoy the sledding!

             

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              Home ownership rates down, but don't be discouraged

              According to the US Census bureau's third quarter housing report released this week, home ownership rates in America are down to their lowest point in 19 years.  Sounds like bad news for buyers and sellers alike, right?  Not so fast...a closer look reveals that buyer behavior has more to do with it than strict market conditions. 

              Mortgage rates have been stable over the last 18 months, and are still at near-historic lows -- yesterday's advertised rate for a 30-year fixed mortgage at one local bank was 4% - exactly what it was in June of last year.  In addition, lending standards have loosened considerably over the last year.  We are seeing bridge loans, asset-based underwriting, and first-time homebuyer products hitting the market for the first time since 2008.  In fact, USDA, FHA and MA Housing all now offer low-to-no down payment products with little or no PMI.  The bar for first time homeownership has not been lower in many, many years.

              So why are ownership rates so low?  According to industry analysts, it is the changing life choices of millenials that are driving market conditions.  Young people are getting married later, having children later, and consequently waiting longer and longer to buy a home.  Sam Zell of Equity Residential was quoted in Bloomberg as saying that "the deferral of marriage has...a staggering impact on real estate."

              There hasn't been a better time to buy a home in recent memory - near-historically low interest rates, continually loosening lending and underwriting standards, and a balanced local inventory ensure that you can find a home at a good price, finance it at a great rate, and put very little money down.

              As always, if you are thinking of buying, give us a call - we would be delighted to answer your questions, and help you take advantage of this excellent market.  We look forward to hearing from you!

               

               

              Investing in a weekly rental cottage? Not so fast...

              If you are looking for a vacation rental, look no further than Olde Cape Cod. However, if you are looking for a year-round rental, you are in for a long search. County-wide, almost 40% of homes are used asseasonal or second homes, and in some towns (like Dennis), the number is over 50%. Of these, nearly all are rented out on a weekly basis to the droves of vacationers that visit the Cape every year. This emphasis on weekly rentals leaves a huge market open for year-round rentals. Tight lending practices and low home inventory have characterized the Real Estate market over the last few years, leaving many homebuyers (especially first-time homebuyuers) in the rental market for longer than they would like. These are often highly qualified renters who are able to pay premium rates for a good quality home.

              If you are considering buying an investment property here on the Cape, don't immediately assume it has to be a weekly rental. Weekly rentals are part of a highly competitive market with high overhead in the form of cleaning fees, brokerage costs, advertising, and utilities. Year-round rentals can prove an extremely wise investment both in the short- and long-term.

              As always, if you are interested in buying an investment property on the Cape, give us a call any time to discuss your options. Whether it's a vacationor long-term rental investment, we are here to answer your questions and help you decide on a course of action that will maximize your investment and help you to meet your long-term goals.

              We look forward to hearing from you!

              Village Highlight - Dennis Port

              The village of Dennis Port has been experiencing a renaissance over the last few years that is not to be missed! No fewer than three new restaurants have opened just this spring, in addition to the many established merchants. These include two music studios, various art galleries, an antique shop, the town library, a large and inviting park with pavilion and playground, and much more.

              Dennis Port also offers a large park that frequently hosts public events. Every Tuesday night of the summer (and every Friday in July) there are free concerts on the green. This year's national Night Out is being held in Dennis Port. And this year brought the first annual Dennis Port block party to town, with all the merchants opening their doors and hosting the town to an old-fashioned good time.

              All in all, Dennis Port has more to offer than ever before! Whether this is your first time to the mid-Cape area or you are a seasoned veteran of Dennis summers, make sure to swing into the 'Port to check out what's happening.