From their investment potential, to the high cost of renovations to an influx of out-of-state, climate-driven buyers, lots of factors are supporting demand this year. iStock photo

As we move into the heart of 2025, Cape Cod’s high-end real estate market is showing impressive strength amidst widespread economic uncertainty.

While financial markets largely face increased volatility in response to tariffs and mixed messaging from policymakers, the Cape Cod luxury real estate market, often defined as $2 million and above, has had its strongest start since the height of the pandemic-driven real estate boom in 2022.

That’s not to say that we can expect a similar buying frenzy to unfold over the course of this year, but the market is sending a clear message: It believes in the value of blue-chip property on Cape Cod.

An Investment You Can Enjoy

In the first quarter, residential sales of $2 million and above were up 47 percent year-over-year and 38 percent from 2023, per data from the Cape Cod & Islands Multiple Listing Service.

One of the key factors behind this strong start may very well be the current economic climate. After all, it is not uncommon for capital to seek safety in tangible assets, like real estate, when other markets show signs of instability.

The fact that property on Cape Cod offers both a proven track record of long-term value appreciation and immediate personal enjoyment makes it all the more appealing.

This concept of receiving personal enjoyment through an investment, which is not typically true of equities or other financial instruments, may be playing a more significant role than one would think.

Perhaps it’s a post-pandemic shift or fatigue from the ever-divisive political climate, but in my experience of selling luxury real estate for over 30 years, I am observing clients value their property here more than ever before.

To them, it often represents the best use of their time: a place to be with family and friends where they can pursue their favorite activities and, even if just for a little while, find respite from the outside world. The fact that their money is working for them while providing all of this makes it a compelling place to put it.

Renovation Costs Encourage Buying

Of course, there are other trends dictating the current market and one of the most pronounced is that buyers have maintained a strong preference for turn-key properties, perhaps another permanent shift in our post-pandemic world.

Many buyers no longer have the appetite for construction and renovation projects that they once did. In my experience, this is not unique to Cape Cod, but is also true of other markets we serve, including Greater Boston and the South Coast.

This is likely in part because, despite the significant appreciation in values that seem to be holding from the pandemic real estate boom, the market has not yet caught up to replacement costs, which are being driven by the cost of construction labor and materials.

With the newly implemented tariffs, this disparity is likely to continue to grow, at least in the short term. But more important than cost, construction takes time.

Understandably, buyers who can afford to do so are willing to pay a premium for a home that they can enjoy with their family now, not two or three years from now.

More Climate-Driven Buyers

An equally interesting trend that we are seeing emerge on Cape Cod is the influx of affluent buyers from other parts of the country that are prone to extreme weather events.

Wildfires, hurricanes and prolonged heat waves have prompted the beginning of what could become a more pronounced climate-driven migration.

What adds to Cape Cod’s appeal is that the real estate looks like a good deal compared to the premier markets in places that are being most impacted, including Florida, Texas and California.

Paul Grover

While it’s true that Massachusetts’ tax policy has prevented many high-net-worth individuals from having their primary residence here, there are no rules against hedging their bets with a second home in a comparatively temperate and predictable environment such as this.

As we look ahead to the summer season, Cape Cod’s luxury market is well-positioned for all of these reasons, and high-end properties are likely to remain in strong demand. Further, as airlines continue to expand their service to Cape Cod Gateway Airport, it is more accessible from around the country than ever before.

While external factors such as inflation, the stock market, construction costs, and tax policies will continue to influence the market, the core appeal of Cape Cod real estate – a timeless retreat offering both financial security and personal enrichment –remains unchanged.

For buyers and investors alike, owning a piece of this sought-after coastal destination is as desirable as ever.

Paul E. Grover is the founder and principal broker of BHHS Robert Paul Properties.