Posts Tagged ‘market update cape cod’

2020 Retrospective on Cape Cod Real Estate

Wednesday, February 10th, 2021

2020 was a year that will go down in history.  We experienced a worldwide pandemic that took thousands of lives and affected Life As We Know It. It hasn’t ended yet but now there’s a light at the end of the tunnel.  2020 also saw the busiest real estate market in the history of real estate, at least on Cape Cod. After a very busy start to our normal spring market, that came crashing to a halt with the Coronavirus.  For many weeks nothing happened in real estate. Then, out of nowhere people started seeing a different big picture than they had before Covid 19. They realized they were going to be working from home for a long time and things possibly would never be the same again. Students of all ages suddenly were home attending class online.  Families were living together again and needed separate spaces, ‘Zoom Rooms’ as one client calls it.

Real estate started to pick up in May of 2020 with buyers streaming out of cities and over the Cape Cod Canal.  If this could become the New Normal, why should they wait until retirement age to live where they love and love where they live? If a home office can be anywhere, why not one in a charming village with sandy beaches to walk the dog on your lunchbreak? Where kids play outside and ride bikes and do the things they can’t in a city? Where the air is fresh and you can actually see the stars at night? So, for the rest of 2020 the real estate community worked relentlessly finding homes for all of the buyers trying to relocate here. Each month the reports from our local Association of Realtors smashed previous records. The level of activity was astounding and did not slow down straight through December. An unbelievable end result.

In Barnstable County which covers all the towns on the Cape (excluding Martha’s Vineyard and Nantucket), Pending sales were up 21.7 percent, Closed sales up 19.3, and the Median sale price up 17.9 percent in 2020 versus 2019. The inventory of homes decreased 56.5 percent.  Now for the four towns I primarily focus on:

In Chatham, Closings of single family homes (SFH) rose 53.5 percent from 185 homes sold in 2019 to 284 sold in 2020. Year over year however, the Median sale price increased just 4.6 percent to $862,750.

Harwich saw 328 SFH Closed in 2020, or a 10.4 percent increase over the 297 SFH sold in 2019. The Median sale price was up 11.5 percent year over year, landing at $514,000.

Orleans had 198 Closed SFH in 2020 versus 106 in 2019; a huge increase of 86.8 percent. The Median sale price rose 13.4 percent to $827,500.

Brewster SFH Closed sales clocked in at a 42.4 percent increase; with 225 Sold versus 158 the prior year. The Median sale price was up 12 percent to $540,000.

Keep in mind that these sales took place over roughly 8 months instead of 12 and you will understand how frenzied the market really was. And still is. Thank goodness for our sandy beaches and lunchbreaks walking my dog!

Assessment Versus List Price – What’s the Deal?

Tuesday, February 25th, 2014

Assessment versus the list price. Because I am finding that Buyers are placing such importance on this, I think it should be talked about. Here is my take on this for the town of Chatham.

As everything in real estate, the assessment vs sale price varies per town. Most of the time it seems like there is no rhyme or reason to setting the assessed value, either. In Chatham, tax assessors often don’t even get inside many homes because the owners are only here part time. So the assessors sit in their car parked in the driveway or  walk around the house taking notes and trying to figure out what they can without actually SEEING the house. They don’t know the kitchen and baths have been updated, the basement finished, a new room over the garage added, and there were two bathrooms added! They SHOULD know this (in cases where a building permit would have been taken out) but sometimes these improvements are missed. As a result, the living space square footage is not correct and the assessment is going to be much lower than it would be/should be.  That’s great – you pay lower taxes, and all Sellers love that!  Until they go to sell. Then they want their assessment to be as high as possible, because they know that Buyers pay attention to it.

A huge factor in figuring the assessments is the LOCATION. Waterfront and water view is always assessed  higher, that goes without saying. And, certain neighborhoods are just more valuable than others. The Town even has a rating system of neighborhoods, a big map showing how Chatham is broken up into different neighborhoods each numbered as to their value.  (Don’t look at this map if you are going to be shattered to find out you don’t live in the top rated neighborhood like you thought!)   As for what homes sell for versus the assessment, here is what I have found in my experience.

If a home is new construction, or walk to the beach, or walk to Town, it sells over assessment. If a home is new construction or renovated PLUS in a walk to Town or beach location, you’ve hit the jackpot! That usually will sell significantly over. It’s supply and demand, and most Buyers are looking for these types of homes, and new or renovated at that.  Waterfront and water view houses also sell over the assessment, oftentimes WAY over.  On the contrary though, a home with water views or frontage but located on a very busy road (Route 28 for example), will probably go UNDER assessment. The negative of the busy road may outweigh the water views or the new construction aspect.

Properties that are not located in investment-type areas (near beach or Town, waterfront water view) have been selling in Chatham just over the assessment UNLESS they need major renovation. If they need major renovation or A LOT of cosmetic updates – e.g., every bathroom and the kitchen needs to be gutted, there are harvest gold rugs throughout the house, and wallpaper from the 1970’s – this house will sell under the assessment unless it’s on the water!  One more exception here. Waterfront is king; even tear-downs sell higher than the assessed value.

Further on the sale price versus assessment, there is also the ‘days on market’ to factor in.  If a listing has lingered on the market for a long time, Buyers think something is wrong with it as it gets bounced around from one realtor to the next. Ultimately when this house finally does sell, it is under the assessed value. Even if it is new or renovated or in a great location. That’s another reason you don’t want to overprice new listings!

Last, it comes down to supply and demand. Many Chatham Buyers are looking for a rental investment property. If a lot of Buyers are looking for a walk to beach or Town location and there is a limited supply, they are going to pay well over the assessed value. That’s just the way it goes. These are the most desirable locations and there are not many homes for sale in these areas. So there is less room for negotiation on the price for Buyers.

According to the Warren Group, at the height of the market in 2006 the median single family home in Chatham sold for $690,000. In 2020 that number is $862,750. So even if you ‘bought high’, it should still turn out to be a good investment!