Posted: January 9, 2008

2008, The year of the rebound?

Here are some articles from various local resources to help you gain some insight on the year ahead. Locally, the real estate market wasn't as bad as some of the doom and gloom predictions made out to be. The main reason being simple economics of supply and demand. Since there isn't much new construction happening on Cape Cod, the inventory is a bit limited as compared to Florida, Las Vegas, and other areas with plenty of land to build on.

Courtesy of Capebusiness.net

The housing market: 2008

It is easy to get discouraged reading national headlines about the housing downturn and severe credit crisis in the subprime market. Keep in mind, however, that Cape Cod is different. It usually enters a downturn late and emerges early. Builders and some real estate experts suspect that will be the case this time as well. High-end builders continue to report that their business has withstood the downturn. Other mid-priced builders who have felt the sting in 2007 say advance orders for next year are on the upswing. Cape Business will dedicate its March-April edition to Real Estate 2008 – including indoor and outdoor living trends, home security, insurance, mortgages, home entertainment and more.

Courtesy of Capebusiness.net

One theory about the latest home prices

Since the housing downturn began nearly three years ago, the median price of a single-family home on Cape Cod has dropped 20 percent, from nearly $400,000 to $330,000. But that snapshot number should be approached with a proverbial grain of salt.

This median number – the midpoint of all sales – is influenced by several factors:

• Many Cape Codders with expensive homes either choose not to sell during a downturn or watch their houses remain on the market sometimes for two or more years because they are harder to sell.

• Meanwhile, residents who must sell are more often than not those with lower-priced homes. Their homes sell faster and usually owners must accept lower prices.

• At the same time, other lower-priced homes tend to be the ones in foreclosure, which are selling at discounted prices.

One result of these factors: The median price drops lower compared with three years ago because there are more lower-priced homes on the market now.

Cape Business studied homes valued currently above $800,000. While many of these did peak at about $900,000 two years ago, they currently are valued at about the same price as they were about three years ago.

Here’s a potential silver lining from November’s housing report from the county Registry of Deeds: For the first time in three years, year-to-year sales volume has stabilized. Only about 30 fewer homes sold last month than a year earlier.

In comparison, 1,800 homes fewer were sold in November 2006 than in November 2005. And 500 fewer homes were sold in November 2004 compared with November 2005.

Could this signal a bottoming to the market?

Courtesy of Cape Cod & Islands December 2007 Newsletter

The Cape Cod Market Statistics and Analysis Our current 2007 Cape Cod Real Estate market is a ‘Market of a different kind’. We all know our market has always been a bit different because of the resort nature of our market area, however Cape Cod is not following the trends being set by the rest of the country this year .

We have all heard and seen the media stories about how bad the real estate market has been, and we have heard quotes of sales being down 20-30% from last year nationwide. The National Association of REALTORS reported in November that as of October 31st, 2007, the Total Existing Home sales including Condo’s, nationwide fell eased by 1.2% from the decrease of Octobers 19.1 % in comparison to the same time period in 2006. Even worse is the report that in the Western United States the Existing Single Family home sales have decreased 33.1% from a year ago. Single Family home sales in the South 19.4%, The Midwest 16.9%, and the Northeast is down 12.6% from the same time period in 2006. What we have not heard is that the Cape Cod Real Estate Market is not following this trend, and in fact for the last 3 months has been relatively stable in comparison to 2006. For a full copy of the NAR report you can go to http://www.realtor.org/press_room/news_releases/2007/ ehs_oct07_mixed_results.html.

Although we are currently in a ‘Buyers Market’, our year to date Single Family sales through November show that our transactions are down only 1.9% from 2006 sales. Our average sales price is up 2.8% from 2006’s average price, reflecting that perhaps the Sales prices have stabilized. Below are some of the details you can find online in our monthly statistical reports posted online at http://cciaor.com/Stats-MLS/Nov07.htm. These numbers are a total of Sales from January through September for each year.

November 2006
Average Sales Price Single Family home - $552,622

November 2007
Average Sales Price Single Family home - $567,968

November 2006
Total Sales Dollar Single Family homes - $1,700,496,964

November 2007
Total Sales Dollar Single Family homes - $1,687,156,202

A difference of $13,340,762 or 0.78% decrease.

Also consider the following Median Sales Prices for sales between January 1st and November 30th of each year.

Single Family 2006 - Median $393,000
Single Family 2007 - Median $390,000
Decrease 0.78%

Condo 2006 - Median $274,000
Condo 2007 - Median $265,000
Decrease 0.32%

Land 2006 - Median $313,000
Land 2007 - Median $300,000
Decrease 4.1%

So what does this mean? I’ll leave the analysis to the economists and our Real Estate Professionals who clearly know the Cape market the best, but in this writers opinion, it looks like our current market may be stabilizing, and the era of buyers waiting for prices to fall may be coming to an end; on Cape Cod that is.