Paper Economy - A US Real Estate Bubble Blog: The State of the Cape

Saturday, September 02, 2006

The State of the Cape

Having just spent a week on Cape Cod, it seemed fairly apparent that the reports of the housing busts effects on the vacation spot were not exaggerated.

It had been noted earlier this summer that home sales on Cape Cod were off some 20.1% year to date and a whopping 30.7% in July as compared to July of 2005.

Additionally, inventories have been steadily rising and currently stand at over a 10 month supply with homes spending an average of 120 “days on market”.

The result is that sellers, although still holding firm to their prices, are facing an increasingly deteriorating market that’s getting worse by the day.

It had been reported recently that prices in the Cape Cod rental market, even the seasonal rental market, have been coming down as home sellers resort to renting to bide their time.

By the way, the collage of home sale lawn signs above were taken while driving a short stretch of Orleans. Left out of the picture were the equally numerous new construction “contractor” signs which in many cases were the builders attempt to sell direct to the buyer.

8 Comments:

After Labor Day (tomorrow), families with school children won't be looking for a new home. That's when prices tumble.

By Anonymous, at 9:37 AM
yes.. the season of selling is over and it will be a cold winter for many who held the high prices of last year. The ones who have to sell will drop their prices. The news and numbers point to the simple fact: Only a person who needs to buy a house will be in the market... for a long time to come. I expect a fast and brutal drop over the next two years... what goes up.. must come down!

By Anonymous, at 2:42 PM
I agree.

I also think that if we have a mild winter here in the northeast, it will really exacerbate things.

I think winter, particularly a harsh winter, can act as a natural means of moderating housing inventory.

Last year, inventories seemed to remain fairly constant throught the winter allowing new and existing sellers to continue selling.

If there is a harsh winter, I think it will act like a natural pause as sellers pull (and hold off on) thier listings wait out for the spring.

By SoldAtTheTop, at 4:42 PM
We may see the advertisements for discount of 10% to 20% off sooner

By Anonymous, at 6:27 PM
Some properties have already SOLD for 10% to 20% below assessed value on the Cape, see 140 properties added earlier today:

Real Estate Bubble Map: Cape Cod
http://www.platial.com/realestatecafe/map/9522

Three times that many sales below assessed value are already documented on a twin map for Greater Boston:

Real Estate Bubble Map: Boston
http://www.platial.com/realestatecafe/map/6343

Click on some of the tags on either map to see how far prices have fallen, and feel free to add your own "bubble comps."

By RealEstateCafe, at 10:21 PM
I've invested in Real Estate from the cape down to the Bahamas and up to Nova Scotia. Peronally, the cape has a style that can not be replicated. I can think of no other place where even in heavy traffic your neighbors take the time to give way and follow the golden rule. The true wealth of the cape seems to me to still be very much in tact and probably better off for having the investment buzz become silent.

Like any investment, you got to know when to buy and when to sell, things don't just keep going up or everyone would be a great investor. It is the skill of finding the next high return investment that sets investors apart. Cape Cod will still fill my soul with that special flavor it's got here as I look at it for what it does for my whole being, not just my pocketbook.

There are high returns each year just starting in the Bahamas for example and things are just getting underway. I've got a little development you can check out at www.bahamaheights.com. also a place that is good for the pocketbook and good for the soul.

By Anonymous, at 12:30 PM
Can there be another place like the cape? I saw this last post said something about the Bahamas. I checked out the virtual tour on the website he posted www.bahamaheights.com looks amazing. I can still get an equity line on my Cape home and maybe that is the only way I am going to see my home make me money for the next 5 years.

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