Jamie Regan – Inventory low

Buyers searching for a single-family home on Cape Cod during the last two years faced steeper prices, but a smaller selection of for-sale homes to choose from.

Prices for single-family homes in all of Barnstable County surged during the last two years, as overall unit sales dropped.

The median price for a single-family home in Barnstable County jumped more than 20 percent to $219,850 in 2001 from $183,000 the prior year, according to statistics compiled by The Warren Group, Banker & Tradesman’s parent company, which collects transaction information from registries of deeds throughout the state.

In contrast, sales of single-family homes dropped about 7 percent from 5,133 sold in 2000 to 4,756 sold last year, according to The Warren Group. Last year’s 7 percent drop was preceded by a similar dip in 2000, when single-family home sales had fallen more than 13 percent from the 5,933 units sold in 1999.

According to area Realtors, a simple explanation for the price increase and sales decrease is the economic principle of supply and demand.

We’re running out of inventory, said Jamie Regan, broker/owner of Century 21 Regan Realtors in Mashpee. That’s forcing the prices up.

With many communities enacting building caps, and towns purchasing land to preserve it, buildable land is becoming scarce and fewer new homes were constructed over the last two years.

There are some towns that have taken a proactive role in slowing down what they consider the over-development of the town, said Christopher E. Coy, president of the Cape Cod & Islands Association of Realtors and principal of the Hyannis-based Realty Executives of Cape Cod.

Barnstable, for example, took aggressive steps to halt all development, and last year was granted a District of Critical Planning Concern designation for the entire town. The designation temporarily stopped all home construction so the town could consider affordable housing and growth issues.

Additionally, more than 1,300 acres have been protected on Cape Cod because of a property tax increase passed three years ago by the region’s voters that provides communities with additional funds, along with matching state money, to buy and preserve land.

Condo Option
In Mashpee, which has a building cap of 90 permits a year, only about 75 new permits were issued last year, said Regan.

Mashpee’s median single-family home price rose to $220,000 last year, a 10 percent increase from the median price of $199,950 in 2000. However, single-family home sales fell 16 percent, to 297 homes from 354 the year before.

Bourne, on the other hand, experienced a steeper rise in single-family home prices last year. The median single-family home price ballooned nearly 20 percent to $207,250 in 2001 from $170,000. Sales fell slightly to 264 single-family homes from 266 in 2000.

Falmouth also saw a double-digit increase in single-family home prices last year. The median sales price for a single-family home jumped 18 percent to $224,950, compared to $190,000 in 2000. Sales of single-family homes in Falmouth fell almost 4 percent from 686 units sold in 2000 to 660 last year.

At one point, people thought that the Cape had an infinite supply of land, said Regan. But according to Regan, Cape Cod is a lot closer to build-out [reaching full housing capacity] than a lot of people realize.

That scarcity of land is driving prices up.

There was a day when you could buy [a third- or half-acre] lot for $40,000, he said. Today, the same lot is about $120,000.

With land prices so high, the homes that are being built are much bigger and more expensive – in the $400,000 to $500,000 price range – than existing homes, according to Coy.

That, coupled with the fact that there are thousands of willing buyers stretching from Washington, D.C., and states north of the nation’s capital who want property on the Cape, is pushing prices up, he said.

Despite that, Coy said there are still condominiums that are available in the low- to mid-$100,000 price range in many parts of Barnstable County and lower interest rates have made homeownership in the region attainable.

In Bourne, for example, the median sales price for a condominium last year was $133,000. Condominiums weren’t so affordable, however, in towns like Falmouth and Mashpee, where the median price for a condominium last year exceeded $210,000.