The Cape Cod Real Estate market closed out 2022 continuing the trend of higher prices and lower inventory that has played out over the last decade. In fact, we closed 2022 with the lowest number of homes for sale (~580) and the highest prices (~$639,000) ever for the Cape market. For comparison, the last market peak in 2006-2008 saw ~5,700 units selling for a median price of ~$375,000, a 90% decrease and 170% increase, respectively.
However, these sales data conceal an underlying shift in the tenor of the marketplace. Although we saw a record low number of homes selling for a record high price, those sales were taking longer and attracting fewer offers per sale than they did in 2021. We take these as signs that buyer demand is weakening after the explosion of interest in homes on Cape Cod during COVID.
Some of this shift in demand can be explained by the evolving macro picture. In January 2022 the national average interest rate for a 30 year conforming loan was near historic lows at 3.22%. Rates peaked in November at 7.08%, the highest they had been in two decades, and closed the year in the mid-6% range. The rapid spike in rates in conjunction with skyrocketing home prices over the last two years quickly priced many homebuyers out of the market, particularly first time and lower-income borrowers. However, the cooling demand can be felt at all price points as even activity from more well-heeled second homeowners seems to be softening.
Prices are up. Inventory is down. Rates are up. demand is down. So what does it all mean? Should I wait to sell? Is it the right time to buy? At Chatelain Real Estate we offer almost 130 years of combined experience in the Cape Real Estate market. We may not have a crystal ball, but we’re standing by to help you, your family and your friends to get the information they need to wisely navigate a changing and complex market. We hope to hear from you in 2023!