This waterfront home in Orleans, which features four bedrooms and four-and-a-half bathrooms, is on sale for $2.95 million. The National Association of Realtors has set up a committee to analyze issues and trends affecting resort and vacation markets throughout the country, including the Cape Cod market.
Vacation home sales in the Bay State, particularly on Cape Cod, have been going strong for several years now, and that trend is likely to continue for the next decade or so.
That is the prediction of Peter Francese, founder of American Demographics Magazine, who recently shared some demographic information he collected with Bay State real estate agents.
“The important message that [Francese] had was that the second-home boom on the Cape is going to continue throughout the next decade and that will sustain the real estate market and the high price of real estate on the Cape,” said Dan Hurley, editor of Cape Cod 2nd Home Journal. The journal, along with the Cape Cod & Islands Association of Realtors and Home Builders Association of Cape Cod, sponsored a talk featuring Francese earlier this month at Cape Cod Community College.
While Francese said second-home sales will continue at a brisk pace on the Cape, he also predicted that the annual price appreciation will ease somewhat from previous years. Demand for second homes or vacation properties on the Cape has been growing, according to local Realtors, and because the supply has been limited due to land preservation efforts and building restrictions, prices have soared over the years.
“It’s [the vacation home market] become more desirable just because there’s so little of it to go around,” said Keith W. Bradley, president of the Cape Cod & Islands Association of Realtors.
‘Great Opportunity’
Realtors on the Cape have gotten used to seeing prices increase by double-digit percentages annually. In Hyannis, for example, the median price for single-family homes sold last year was 25 percent more than the median single-family home price posted in 2001, according to statistics compiled by The Warren Group, parent company of Banker & Tradesman.
The Cape has about 50 percent of all vacation homes in Massachusetts, with second homes representing about one out of every three dwellings on Cape Cod. Unlike other resort communities, high-rise developments and resort communities do not dot the shores of Cape Cod. Instead, about 92 percent of all the vacation homes on the Cape are single-family homes, with some of them offering resort-like amenities, and therefore have much higher values.
In fact, prices in some Cape communities have jumped by more than 100 percent over the last four years. In the popular destination of Hyannis, for example, the median price for single-family homes sold last was $205,000, 105 percent higher than the $100,000 median price of 1998, according to The Warren Group.
Single-family median prices escalated even more in Barnstable, where last year’s median price was almost 118 percent higher than four years ago. The median selling price for single-family homes in Barnstable was $359,550 last year, up from $165,250 in 1998.
Single-family home prices in Orleans also experienced impressive gains during that timeframe. The median price for single-family homes sold last year was $410,000, nearly 91 percent more than the $215,000 median price of 1998.
Chatham’s single-family median home price was $345,000 last year, up 88 percent from the $183,000 median four years ago.
In the future, prices on the Cape will continue to rise by at least 10 percent annually, according to Francese and Bradley. The Cape will continue to attract buyers if efforts to preserve the region’s beaches and land are kept up, according to local Realtors.
The second-home market on the Cape and other regions of the country also will be boosted by the baby boomers who are nearing retirement age and are looking for a home to escape to, real estate experts predict. Bradley pointed out that the Cape in particular also has started to benefit from wealthy buyers from other countries who are seeking to invest in a second home.
According to a recent study by the National Association of Realtors, low interest rates, high baby-boomer demand and an unsteady stock market all have helped to push an increasing number of people into buying second homes on the Cape and elsewhere. While most second-home owners bought their property for recreation, an increasing number also are viewing the investment aspects of the home purchase much more seriously, according to the NAR study.
Recognizing the importance of the vacation home market, NAR recently established the Resort Real Estate Committee. The committee will review, monitor and analyze issues and trends affecting resort and vacation markets. The committee will also recommend policies to NAR.
Bradley, a Realtor with Coldwell Banker Atlantic Realty in Chatham, was one of 40 Realtors across the country appointed to serve on the committee.
“Obviously, I’m very excited to be part of the committee. It’s a great opportunity to be a spokesperson for the Cape and resort communities throughout New England. We have some of the oldest resorts in the country, and some of the best,” said Bradley.
Bradley said the Resort Real Estate Committee will work on increasing awareness of national and international resort real estate sales, even possibly developing an education program and Realtor designation for resort specialists. Currently, there are special designations for Realtors who specialize in helping a variety of clients – including senior citizens and buyers from other countries.
Next month, Bradley will be attending a New England regional convention in Rhode Island, where he plans to meet with colleagues from the Berkshires and other vacation hot spots in New England to hear about their concerns and trends.
