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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!