Real Estate Trends

September 2018 Market Update

August Review:  The big news here is that inventory continues to grow.  We currently have 6.4 months of single family home inventory in Barnstable County as well as increasing number of homes for sale (labeled as inventory in the table below).  Generally a market with around 5 and 6 months of inventory is considered healthy so we are relieved to see these numbers up again.  We also tend to see a spike in listings this time of year simply because people are done using their summer homes, but we'll have to wait and see if the trend continues.

 

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Recent Market Summary

  June July August
Closed Sales 413 330 358
Inventory 1,992 2,071 2,182
Median Sales Price $438K $440K $420K
Avg Days on Market 95 83 90
Avg % of Original Price 95% 96% 95%

 

Market Update July 2018

June Review: The numbers for June continue the ongoing trends... compared to last year, median sales price of single family homes is up 10%, days on market is down 20% but inventory is even for the first time since 2009.  Additionally, when we look at the first 6 months of 2018, months supply of inventory is up 40% from January, which may indicate gains in inventory coming over the next few months.  Sellers were still favored in the June market but with months supply of inventory at 5.9, we could be at an inflection point.

 

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Recent Market Summary

  April May June
Closed Sales 329 399 413
Inventory 1,755 1,924 1,992
Median Sales Price $399,000 $429,000 $438,320
Avg Days on Market 108 114 95
Avg % of Original Price 96% 95% 95%

 

 

Market Update June 2018

May Review: Last month was characterized by the Spring market frenzy.  While 399 closed single family homes may not seem like much of a frenzy, compared to the January-April dearth, it was.  Overall though, sales and inventory are down compared to this time last year, which we believe says more about the unusually busy 2017 market leaving us with lower inventory to start 2018.  Conditions still favor sellers and buyers are encouraged to have strong offers (excellent financing and few contingencies) placed early to be considered.  We are encouraged to see an increase in new listings which is helping to rebuild the inventory here in Barnstable County.  Experts are also considering the idea that the current market conditions (higher prices and fewer days on market) are more sustainable than originally expected due to improved lending practices to more qualified borrowers.

Featured Search: Cute Mid-Cape Cottages for less than $350,000 What's New in Barnstable County?  Find out here

Recent Market Summary

  March April May
Closed Sales 255 329 399
Inventory 1,584 1,755 1,924
Median Sales Price $415,000 $399,000 $429,000
Avg Days on Market 137 108 114
Avg % of Original Price 95% 96% 95%

 

Ask Agnes: Buying and Selling on Cape Cod - Part 4

After examining the process of selling on Cape Cod, it is now time for a buyer's perspective.  For more information on selling your home, start at Part 1 of the series here.

"OK Agnes, I am ready to buy a home on the Cape...uummmm...help?"

"That's wonderful news!  Owning a home is a dream many people want to realize and we take great pride in helping them do it.  I'll approach from the perspective of first-time homebuyers and hit relevant points for all buyers along the way."

"Got it."

"The first thing you should do is learn how much you can spend on a home.  Most people finance (get a mortgage) for real estate transactions and even if you will be buying in cash you still need to set your limits.  In the case of financing, talk to a local bank or mortgage broker who will lead you through the process of getting pre-qualified.  In short a bank evaluates your total income, liabilities and assets to help you decide how much home you can afford.  You should always do this before you even think about looking for houses for two reasons (really the same reason but with two points).  First, don't waste your time dreaming of gold-plated faucets and kids playing on the dock by looking at $900,000 waterfront homes if you won't be able to afford one.  And, just as crucially, don't waste your time looking at $200,000 homes thinking that is all you can afford when, in reality, you could qualify for a $350,000 purchase price.  Over the years we have seen both situations and with rates as low as they are these days, people are often surprised at how much they can actually afford.  When you have an idea of a reasonable price range you and your realtor can move to the next steps."

"OK.  I talked to a bank and qualify for a $350,000 purchase price. How do we get started?"

Luxury Harwich Screen Grab"Well this is an exciting point in your search for a home.  And we proceed in a lot of different ways depending on the client.  Some people are very engaged in the search and spend a lot of time driving around to find appealing neighborhoods, as well as looking online for homes of interest.  A great place to start is on our website. By signing up you can save searches and your favorite homes (check out the screen grab at left) as well as get in touch with us for an in-person viewing of listings you find interesting.  Other clients are very hands off and prefer a more curated approach in which we, as agents, present properties we think are a good match.  It is important to have a good conversation with your agent early in the process so that you are both clear on which style you prefer. We love working with both types of clients (and everything in between) and take pride in that 88% of our business comes from repeat customers or referrals from past clients."

"I've started looking, but holy cow there is a lot out there."

"First, start with locations.  If you currently live and work in Brewster why not start by searching for homes there?  Then you can narrow price range and refine the search (i.e. including garages or minimum number of bedrooms) to suit your needs.  Also you can use our 'What's New' search to keep an eye out for anything that pops up on the market that you may like but otherwise doesn't match your criteria (like a house on the Dennis and Harwich line that is two minutes from Brewster, but is otherwise exactly what you want).

Well thanks Agnes, you have given us a lot to think about and hope that some of these suggestions for buyers are useful to our readers too.  Feel free to contact us with questions about buying (or selling) on the Cape and stay tuned as our next installment will go into finding your dream home and getting an offer accepted.

Ask Agnes: Selling and Buying on Cape Cod - Part 1

    We're back for another installment of 'Ask Agnes'.  Recently we have had a lot of interest regarding the process of selling your home on Cape Cod.  We'll start this series with the process of selling and be sure to hit relevant points to consider when listing your property including when, with whom, and why.

"Hey Agnes, should I sell my home and when should I put it on the market?"

    "'Should I sell' is probably the most important question to consider for any potential seller.  Before considering a move, research the time and cost for changing your current home into one more suited to your needs.  If you love your current location but need an extra 200 sq ft then an addition or reconfiguration may be a better idea than a move.  For more information on choosing a contractor check out our blog - 5 Things to Consider When Hiring a Contractor.  However a job relocation, undesirable location, or already maximized space in your current home are all reasons that necessitate a sale.  

   "Once you have made the decision to sell, timing can be critical.  Luckily a lot of the Cape Cod market has such low inventory right now that a home priced correctly for its condition and features can sell quickly regardless of the listing start date. Additionally we ran some numbers for the previous few years and there is no significant correlation between how close you get to your original asking price and when you list your house.  However, houses that list in the early spring and late summer spend less time on the market.  And the less time your home spends on the market leads to fewer mortgage payments, electric bills, insurance (etc...) so ultimately, more money in your pocket."  

"What can I do to prepare my home (and myself) for listing?"

    "Make a plan for the future: The most important question is where will you go once your home sells?  If your home is not a primary residence then this question may already be answered, but if your home is rented it is important to make sure tenants have somewhere to go as well.  Another thing to consider is your financial situation and how long you can afford to wait for your house to sell.  The reality is that some properties take longer to sell than others but be sure you have enough money to pay all mortgages, taxes and repair bills that may come up.  Just because you are selling doesn't mean you are not responsible for putting on a new roof or repairing damage due to flooding. Working with a local agent on a pricing strategy to meet your timeline is critical.

    "Prepare the property:  While squeaky hinges and jiggly doorknobs are things we all deal with in our own homes, now is the time to address each item on the punch list (a great example of a well prepared and kept property is 9 Osborn Snow Dr, East Dennis).  You would laugh at how often some of these items are on the original inspection report from years (sometimes decades) ago when the owner bought the house.  But don't feel bad, this is the reality of owning a home (and I have a few of these items still on the list too...Ed...).  Also cleaning and appropriately staging your home highlights its best qualities.  A pile of folded clothes on the bed during a showing is not as detrimental as a three foot stack of newspaper clippings on a cluttered and dusty desk.  Unique furniture, expensive menageries, and unfinished projects don't sell houses.  Let the best of your home shine through (and finish that 10 year old jigsaw puzzle in your new house).  The same goes for landscaping.  Trim the hedges, cut the grass, weed the garden, mulch the roses.  Check out some suggestions in an older blog on exterior improvements.  Curb appeal is the second impression of your home (the first is the photos!) and cannot be underestimated in importance."

Thanks Agnes, as always we appreciate your years (but not too many) of insight into the local market.  For the next installment we'll be examining how to choose a real estate agent and what having your house listed is actually like.  As always don't hesitate to contact us with questions about all of your real estate needs.

Market Trends and Analysis - Part 4

    Our goal in this series is it to help you understand how we interpret markets on the Cape and how this informs our recommendations when developing pricing strategies.  For our final installment we will evaluate the Cape Cod market for the past 3 years (starting in October 2014).  

    First the inventory of single family homes has been dropping over the past few years.  This factor coupled with rising median sales prices and fewer days on market indicate an accelerating market in Barnstable County.  Another interesting factor to note is the significant decrease in homes for sale over the past year and that 2017 did not show as stark a seasonal bump in inventory as is typical.  Additionally the affordability index is trending towards less affordability on Cape Cod.  

    What's our take? If you are thinking of buying, our advice is not to wait.  Interest rates are at historic lows and, if the current market trend continues, homes will continue to become gradually more expensive.  The long-term news isn't all bad, though - there are numerous local, state, and federal initiatives in the works which plan to ease the affordability pinch here on the Cape.  For more information, check out this local housing forum featuring none other than our own Ned Chatelain.  But you don't have to wait for new programs to buy something - give us a call and we can put you in touch with the top-notch mortgage brokers we work with who can walk you through low-downpayment and no-downpayment mortgages, first time home-buyer programs, or local lending incentives that can make the difference between buying this year or buying in three years.

     On the other hand, If you are thinking of selling, this is good news for you.  The Spring is an excellent time to get your house on the market and winter is the best time to get it ready.  Give us a call today if you are interested in a home valuation and comparative market analysis.

Market Trends and Analysis - Part 3

    Our goal in this series is it to help you understand how we interpret markets on the Cape and how this informs our recommendations when developing pricing strategies.  In this installment we will be evaluating a specific market - single family homes on the water, Barnstable to Orleans (Homes on Water Bodies & Homes on Beaches). Immediately we notice some relevant trends.

    First the median sales price for these homes is much higher than the Barnstable County median at $1,200,000, yet take far longer to sell with a median days on market of 95 (and an average of 231).  To be fair these are expensive waterfront homes, occupy a smaller market niche, and ultimately take longer to sell.  We also see, based on the bar graph at left, that the group of fastest selling homes (43 days or less) sell for 94% of the asking price - as compared to Brewster in Part 2, those fastest selling homes did so in 25 days or less with 99% of the asking price. 

    Getting back to the waterfront case study, the homes that take longest to sell require price reductions on the order of 12% off the original asking price and only sell for 79% of the original asking price.  What we see here is that people tend to price waterfront homes very aggressively (high) and require significant reductions before they sell.  Furthermore these homes are sold for far less than the original asking price as well as the current asking price - something to think about if you are in the market for a $1,000,000 home on the water.  Consider also that many of these sellers have a price in mind and are willing, can afford, and believe that waiting will get their asking price; however, as is evident in the data, waiting longer does not return a higher sale price.

    We discovered one more interesting thing here.  When analyzing certain markets it is useful to know how square footage affects sale price - and it may not be what you think.  In this market (and this is not always the case) the larger the home the fewer dollars per square foot ($/sqft) it returns.  Using the trend line on the graph we would predict that a 9000sqft home would sell for about $500/sqft whereas a 1000sqft home would sell for closer to $600/sqft.  Mind this is a loose relationship but it is a trend that reappears in many markets.  The takeaway?  Larger waterfront homes are having a harder time selling than smaller ones - price reductions may be warranted earlier in developing a sales strategy.

  Check back next time for our final part in the series: some long term analyses.

Market Trends and Analysis - Part 2

    Our goal in this series it to help you understand how we interpret markets on the Cape and how this informs our recommendations when developing pricing strategies.  In this installment we will be evaluating a specific market - homes in Brewster between $300k and $500k.  We chose this market because it includes the current median sales price in Barnstable County of $380,000. 

    From August 1, 2017 until October 26th (when we ran the numbers) only 25 homes have sold in this price range in Brewster.  Remarkably, the median sales price is ...$380,000, and the average days on market is 66.  As a result we note that in the past three months houses in Brewster sell more quickly than the average in Barnstable County.  Furthermore Brewster shows signs favoring sellers.  We see this in the fact that homes sell relatively quickly and return a higher % of original list price than Barnstable County overall (please see Part 1 for this graph and explanation).  When looking at the last 3 weeks we also note that fewer price reductions are needed before homes are selling.  Other points of interest that we consider - though don't have time to discuss fully - include absorption rate, total listings and withdrawn listings.

    We look forward to introducing part 3 of this series when we compare markets with specific features (water!).  If you are curious about how your home will compete in your local market please contact us today or click here to get a home valuation.

Market Trends and Analysis - Part 1

    We always try to understand the real estate market on Cape Cod in a variety of ways and to explain our understanding to our clients.  For the first installment of this series we will be looking at Barnstable County as a whole and explaining an interesting trend that carries over into many markets on Cape Cod.  Our goal is to help you understand how we interpret the market here on the Cape and how it informs our decisions when developing pricing strategies.

    To begin we found residential property sales from $100,000 to $2,000,000 for the past 365 days and calculated the median days on market and sales price.  In this case median days on market is 55, median sales price is $380,000.  Why median and not average? When describing a set of data that is not normally distributed (a bell curve), average is not necessarily the best way to describe the central tendency of the data.  The median says that 50% of homes that sold were equal to or greater than that price, and the other 50% were less than or equal to that price.  This helps us get a better picture than the average for what a typical house sells for on Cape Cod (since only a few expensive homes will pull this average up).  Also for the days on market the same discrepancy is apparent: median is 55 days, average 100 days.  The average in this case is skewed above what is typical because some houses take a very long time to sell.  So we stick with median for these cases.

    The other thing we find is that the longer a house stays on the market, the less money it makes...in two ways.  Notice the graph at right.  The pairs of bars represent the fastest selling homes (selling in less than 26 days), the middle (26-118 days) and the slowest selling homes (more than 118 days).  The red bars are the current price as a percent of the original list price.  The blue bars are the sale price as a percent of the original list price. What we see is that the fastest selling houses don't reduce in price (red = 100%) and sell for very near the original asking price (98%).  The next set of homes reduce their current price to 97% of original and sell for only 94% of the original.  The last group reduce the price yet again and sell for even less than the original asking price.  The trend is towards weaker offers generating lower sales prices.

    The lesson is three fold.  First, by pricing your home well from the start you are increasing your chances of getting a better offer.  Second, leaving your home at a high price for too long tends to return lower offers - a principle which is more pronounced the longer your house spends on the market. Finally, by using qualified local real estate agents who understand the local markets you are maximizing your chances of pricing your home correctly from day one.  One final point, agents do not determine the price of your home, the market does.  

    If you are curious about how your home will compete in the local market please contact us today or click here to get a home valuation.

 

Airbnb, Mountain Towns and Cape Cod

    We think this article by Tom Vanderbilt at Outsideonline is particularly poignant.  While it characterizes a mountain town in Colorado the parallels to Cape Cod are astounding.  Vanderbilt describes how the growing trend in short term rentals through companies like Airbnb is slowly eliminating potential housing for residents.  The problem is one of economics: if you can own a home in a desirable area, why would you rent it on a long term basis - yearly for example - when you can rent it on a short-term basis, through a company like Airbnb, and generate more income?  Vanderbilt follows a local father struggling to make ends meet, working multiple jobs, and worrying about where he will live when the tourist season starts...sound familiar?  What makes the Cape such a great place to live also makes it a great place to vacation and it is difficult to dissuade a homeowner from the extra income potential.

    On Cape Cod we are finding that more and more homes are being rented just for the summer, making them unavailable for long term lease seekers.  In fact, in response to the decreasing supply of affordable housing on Cape Cod, CCYP is holding a design competition for architects (see the brochure here).  The contest encourages a repeatable homes design balancing 'affordability, utility, adaptability, durability and suitability for the target demographic (young professionals, working families, year round residents).'  Other initiatives on Cape Cod seek to remove restrictions on building and renting accessory dwelling units (more commonly known as in-law apartments) to increase the amount of available housing.  This link comes from the local MLS on Cape Cod and describes the problem well.

    While the economy plays a large roll in housing trends on Cape Cod we are curious to see where the future will lead.  On one side of the coin locals will be increasingly priced out of the market and the Cape will be a resort where service personnel commute from less expensive housing elsewhere.  On the other side of the coin the development of Cape Cod will find a balance between the tourist economy that sustains the region and more permanent solutions.

If you are interested in learning more about housing on Cape Cod and buying or selling property please contact us today with your questions.