Blog :: 02-2021

After more than 25 years of living, working and playing on Cape Cod we have a lot to share about the area.  Our blog topics run the gamut from fun things to do, working with contractors, and homeownership tips and tricks, so check back frequently to see what's new.  If you have questions or would like to learn more about Cape Cod or owning property on this beautiful peninsula please contact us for more information and to set up a showing for any listing. 

Cape Cod Market Update February 2021

January Review: Jan Market update

While the January market was still exceptional, it gave us the first opportunity to breath since May of 2020; however this was not a typical "seasonal slow-down".  Median price was up 33% from this time last year but held steady compared to the previous month, December 2020. Additionally closed sales declined significantly in January, to 297, which is more standard for this time of year. However the abysmal inventory (almost exactly 1000 fewer units than this time last year!) means that, what appears to be a slow down in the market is largely driven by the frenetic pace at which homes are being put under agreement, and therefore taken off the market. In other words, of course the industry saw a slowdown in house sales in January, there were only 453 homes in all of Barnstable County available to sell!

These numbers favor sellers greatly and the best advice we can give a potential seller is -- sell! The desperately market needs an infusion of inventory to start rebalancing and, since construction isn't keeping pace, the existing housing stock has to make up some of this ground.  With a prolonged dearth of inventory we see home affordability continuing to decrease on Cape Cod which will have larger ramifications for both the local economy and the shape of the real estate market on Cape Cod.

Whichever seat you are in, whether buying or selling, the professionals at Chatelain Real Estate are here to give you the expert advice you will need to make your transaction a success. For more market data check out our blog category Real Estate Trends.  You can also give us a call any time - we look forward to hearing from you.

 

 

 

Recent Market Summary

    Nov     Dec     Jan  
    Closed Sales    457     491     297  
   Inventory     724     542     453  
   Median Sales Price   $585k     $570K     $570k  
   Avg Days on Market    63     57     67  
   Avg % of Original Price    98%     98%     98%  

2020 Cape Cod Real Estate Market Recap Part 2

FOR PART 1 IN THIS SERIES CLICK HERE

The big question is “what about 2021?” Will the strong market hold?  Will prices continue to climb?  Or are we in a bubble whose collapse is imminent?  The short answer is, as always: “we have no idea.”  But for a long answer, here are some factors we see swimming around in the crystal ball on Agnes’ desk:

1) COVID generated an incredible demand for properties on Cape Cod, driven largely by out-of-area buyers.  Many of these were shopping for second homes to escape the pandemic shutdowns in urban areas and retained their off-Cape home as their primary residence.  But many made the move to Cape Cod permanently, attracted to the high quality public schools, phenomenal outdoor recreation, arts and culture scene, and of course, fried fish.  The extent to which either group will remain in the marketplace is the single greatest X-factor in predicting 2021 market performance.

2) Regardless of what happens with COVID demand, we are not generating enough new units on Cape, so we expect continued inventory problems.  This has been the story for 25 years across MA, and lack of new production has been driving median home prices to exceed median income by incrementally greater and greater margins every year.

3) The Fed's buying has contributed to massive amounts of cash in the marketplace, which even apart from COVID has been putting significant upward pressure on assets like real estate, bonds, gold, art, wine, etc... Everything we are reading suggests that this stimulus will continue.

4) Likewise, the Fed is signaling that they will keep the benchmark rate near 0% for the short-medium term, which favorably impacts mortgage rates and again puts upward pressure on real estate prices.

So what’s the roundup?  Items #2, 3 and 4 combine to suggest a continued strong market in the short term.  #1 is a wild card.  If things return to 'normal' and folks suddenly decide they no longer need or want that second home, or that they can no longer rationalize the expense, we may be in for a buyer’s market in the near future.  Only time will tell how things will play out.

2020 was a crazy year.  2021 is starting off on the same foot.  We have no idea what the future will bring.  But we do know this with 100% certainty: whatever the market brings, your Realtor will be a vital resource and ally ushering you through the buying, selling, or renting process, and there are no better agents out there than those at Chatelain Real Estate.  So pick up the phone, drop us an email, or stop by the office any time to discuss your needs -we’re here to help!
 

2020 Cape Cod Real Estate Market Recap Part 1

There are no two ways about it.  2020 was a remarkable year for the Cape Real Estate market.  We started off the year in familiar territory with January and February showing roughly the same level of market activity as in recent years.  But when the COVID pandemic took hold in March we saw a sudden slump in both pending sales and new listings – by the end of April new listings for single family homes were less than half of what they were in April 2019.  Things started to turn around in May, and by the end of July first quarter losses had already been erased and year-to-date median sale price and closed sales were up.  This trend continued until the end of the year, with record-setting monthly numbers in Q3 and Q4 eventually leading to a full 17.9% increase in median home sale price, and 19.8% increase in closed sales.

 

This 19.8% increase in closed sales happened in spite of inventory continuing to lag behind demand (see graphic above).  For example, buyers came back to the market in force in May. However, new listings of single family homes continued to drop until June, and by the end of the year never reached up to 2019 levels.  The most obvious effect of this low inventory is higher prices (a whopping 17.9% higher).  But it also leads to a faster and more aggressive market.  Total days on market was down this year, and homes are fetching closer and closer to asking price as time goes by.  A seller in today’s market can expect to receive 98.2% of asking price for their home, which is a significant increase over past years. 

What does this mean for buyers in today’s market?  Low inventory and high list/sale price ratios mean buyers should expect multiple offer situations with many homes selling for over asking price.  And the ever shortening days on market means buyers have to be ready to strike when the right home comes on the market.  Buyers should be pre-approved by a reputable local bank, and have a crack Realtor (like those from Chatelain Real Estate) on their side to help them move quickly and decisively.

For sellers, the takeaway is: sell!  Please!  We need more inventory in the marketplace in order to balance out surging demand.  Continued low inventory will only keep pushing prices higher, further exacerbating our already crisis-level affordability issues.  And with so many buyers out there, you are sure to get top dollar for your home.

The big question is “what about 2021?”  Will the strong market hold?  Will prices continue to climb?  Or are we in a bubble whose collapse is imminent?  The short answer is, as always: “we have no idea.”  But for a long answer see part 2 --HERE-- with the most significant factors we see swimming around in the crystal ball on Agnes’ desk:

Vacation Rentals on Cape Cod - 2020 Year in Review

2020 was an unusual year to say the least and the vacation rental market on Cape Cod was no exception. Local hotels and motels suffered as many vacationers were either unable to travel or reluctant to be in shared spaces. However, when comparing our experience as short-term vacation rental brokers to the hotel industry, we found the comfort of a clean private vacation rental home to be an incredible draw during the pandemic. Let's unpack a couple points of interest from last season and determine if that may influence 2021 and beyond.

1. Renters were not discouraged from weekly home rentals

Let's review here briefly since March 2020 seems like it was a lifetime ago.  Once significant lock-downs were put in place by the Commonwealth in late March of 2020, short-term vacation rentals were put on hold. This shutdown prevented new leases from being written and left a looming question mark over the entire season. However, in early June when the restrictions on vacation rentals were lifted, the floodgates opened and boy did they ever. Most of June was spent furiously making up for the past 6 months of lost booking time and, as a result, our 2020 summer season was unmatched in recent memory for occupancy. Vacationers, after spending months cooped up in apartments and cities, wanted to get away and felt safer doing it in a professionally cleaned private home, like the ones we manage, than in a hotel, resort or other accommodation where more people congregate and comingle.

Vacationers were suddenly reminded that Cape Cod is a delightful getaway merely a day's drive from anywhere in New England, New York, and even down as far as Washington DC and farther west. The appeal of a sunny beach or private yard where you can spread out and remain socially distant from strangers - while also enjoying a cooling dip every now and again - is something that makes Cape Cod both unique and delightful in the vacation market. 

2. Peak Season and Off-season each got a little longer

In our experience the most popular "peak" weeks for vacation rentals on Cape Cod are the last two weeks in July and the first two weeks in August. Bookings usually are less competitive for the end of August (kids back in school) and earlier in July but last year saw our waiting lists extend to double digits, even for some of these off-peak weeks. 

In addition to the unprecedented summer season, off-season interest was also exceptional in 2020.  In a typical year, before mid June as well as after Labor Day are challenging to fill due to school schedules; yet both of these times saw far higher occupancy rates than usual. With students and parents working virtually,  many were able to either extend vacation time or come to the Cape to escape even during the school year or normal work weeks.  Additionally, we had a number of retirees and remote workers just looking for a change in scenery that filled many of these vacancies.

3. What can we expect in 2021?

Based on how much booking interest we are already seeing so far we expect that Cape Cod will remain top of list for summer vacations for this year at least, and hopefully for quite some time. After 2020's jarring nature of shutdowns, ever changing regulations, and palpable uncertainty, we also expect local businesses to be able to better cope with the nature of operating during a pandemic. Many local shops, restaurants, retailers etc... have spent the past 11 months honing their operations during a pandemic and will be able to manage the summer crowds without the uncertainty of last year. We see Cape Cod continue to be a delightful summer vacation destination and hope you can come and experience it for yourself this year or in the near future.

For more information on a summer vacation rental, see our available homes --HERE--

Donation Opportunities on Cape Cod

What a year it’s been since I sat down to write for our last annual newsletter! Then, I was just settling into my new position here at Chatelain Real Estate and was looking forward to a wonderful year. What’s that they say about ‘the best laid plans’?  While the Cape has been experiencing a record-breaking real estate market, many people and businesses are living with the uncertainty of whether they’ll be able to support themselves through the coming year. One thing I love about living on Cape Cod is the spirit of community, so if you’d like to donate to support our local individuals, businesses, or non-profits -- or if you’re in need of resources yourself! -- check out the following funds:

Housing Assistance Corporation created a workforce housing relief fund to provide some financial relief for individuals and families struggling to stay afloat. Keeping people stably housed is always important, and doubly so during a pandemic! HAC has a long history of helping local residents find and maintain housing, and connecting them with appropriate financial and social services. 

The Cape Cod Resilience Fund is the brainchild of Love Live Local, an amazing nonprofit that spotlights and supports local businesses and vendors. The fund provides grant money to small business owners who have been impacted by Covid, whether from lockdown or a reduced ability to do business. Love Live Local has a store on Main Street in Hyannis and hosts a number of markets throughout the year for local makers to showcase their wares!

The Cape & Islands United Way’s Covid-19 Community Response Fund is channeling money to their existing and new non-profit partners. As lockdown went into effect just after the 2020 grant review process, the United Way decided to prioritize initiatives supporting housing and financial stability. The Community Response Fund continues this work by giving money to organizations that help with food, shelter, and emergency assistance. 

Hopefully, by the end of this year, things will be a bit more ‘normal’ -- but until then, give if you can, be kind to each other, and wear your mask!