The condo market on Cape Cod has been very slow, but there is clear evidence that if a unit is in good condition and is priced right, it will sell.
A case in point is a closing that took place yesterday. When I was meeting with the seller about listing her beautiful condo, the seller had a price in mind that was considerably above the fair market value that I had determined. I suggested that she have an appraisal done so that we would have an independent third party’s view of the property value. Another good reason to have an appraisal done is that there will be a day of reckoning when the bank appraisal is conducted after the home is under contract. No matter how much the prospective buyer loves the home, if the home does not “appraise,” there is no sale.
After the appraisal came in, the seller listed the home and priced it accordingly. The condo sold in 63 days at the appraised value to a couple who had been scouting the market for over two years. They knew that the home was priced right and was a good value in this market.
Living in New England (what we consider to be the Cradle of American Civilization), we Cape Cod residents often take for granted the various historic places and events that are within an hour or two of home. Patriots’ Day for many of us is a holiday from work, a chance to participate in or root on our friends up Heartbreak Hill in the Boston Marathon, or perhaps an opportunity to take in an afternoon Red Sox game.
This year my wife and I decided to re-live that portion of history that we celebrate today. Fortunately for us, we were introduced to the idea by some neighbors who have made reenactment scenarios a part of their lives, and we were inspired by their enthusiasm. While we have not donned colonial garb as yet, we were intrigued at their suggestion that we attend the Lexington Green reenactment this morning.
History 101 at 6 AM?
Mary Beth and I were out of bed at 3:15 this morning so that we could arrive at the Lexington Green by 4:45 AM to see the reenactment of the Battle of Lexington. As we drove into Lexington under the cloak of darkness, we began to think that 4:45 AM may have been a bit too late. Thousands of people of all ages had arrived before us, and thousands more were on their way. Some were carrying step ladders to ensure their view of the Green.
Fortunately we did get a front row standing spot (albeit an obstructed view thanks to a very old pine tree that obviously had arrived before us). We stood with folks from around the nation. Volunteers dressed in colonial clothes worked as “pickets” and made sure that everyone stayed behind the ropes, but several also came by and delivered mini-history lessons. They wanted to make sure that everyone knew the story behind what we were about to witness.
At 5:45 AM, the loudspeakers that surrounded the Green came to life, and the crowd went silent. The speaker once again made sure that everyone knew the background of what they were about to see. He also introduced some visitors from Lexington’s sister city in France and reminded those present that the Revolution might not have been won without the help of the French.
More Grateful Than Ever
Check out www.battleroad.org and click on “What Happened That Day” to get a brief summary of the events that then unfolded before us. It was surprising how apprehensive we became as the British soldiers approached the Green (and the somewhat disheveled colonial militia men) with their full regalia, fife and drums, and muskets with bayonets.
A very solemn morning for me. I’m glad that my clients and former neighbors Klaus and Sherry Schneller encouraged us to go. The VIP passes, map and directions were very much appreciated.
Happy Patriots’ Day!
The number of months it takes a seller to sell a condo decreased 33% from October 2009 to February 2010. In October, the absorption rate stood at 20 months and it is now at 13.5.
The most dramatic drop is in Wellfleet where the rate dropped from 39 months to 7.8, followed by Provincetown with a drop from 35.1 months to 12.2.
What does this all mean? It is a positive indication that the sale of condos has picked up significantly. The absorption rate of single family homes is now only 2% better at 11.3 months, the closest the two have been in over two years.
We received news on Friday that at least one local Cape Cod lender, Cape Cod Five, is reinstituting 90% loans for second home buyers. (NOTE: Contact Meryl Watson for details: firstname.lastname@example.org). This was made possible because no title insurance companies would insure more than 80% loans but now at least one company is willing to offer the coverage.
95% Financing is Available for Cape Cod Condos
What does this mean?
Since the absorption rate for condo sales in a balanced market is usually around 5 months, a 20 month absorption rate means that the number of condos available exceeds the number of potential buyers. This would indicate that buyers still have the advantage in negotiating sales prices and conditions.
Now that the summer is winding down, it’s time to do those things that you wanted to do all summer but somehow never got to do.
Lobster on the Lawn Mondays
Every Monday night during July and August from 5:30 to 7:30 pm, Saint Barnabas Episcopal Church in Falmouth Village serves all meat lobster rolls with all the trimmings for just $15 per person. My wife Mary Beth and I finally made it this past Monday. Hundreds of locals and visitors gather on the church’s expansive lawn. Tables and chairs are provided, but many people bring blankets and sit right on the grass. They also offer free PB & J with juice, chips and a cookie for kids under age 10. Finally, you get a choice of lemon meringue or blueberry pie…of course mine was blueberry!
Part of the attraction is the casual community atmosphere that permeates the evening. Frisbees, flying footballs, and even a life-sized lobster are part of the fun, and you can end the evening with a stroll down Main Street.
There’s Still Time
The program wraps up for the summer on August 31.
Until next time, Steve
|2009 Falmouth Condo Market Overview|
|Dec. 31, 2008||May 15, 2009||July 31, 2009|
|Units on the Market||56||76||68|
|Average Sales Per Month||4.5||3||4|
|Absorption Rate*||12.4 Months||25.3 Months||17 Months|
*Absorption Rate: The number of months that it would take for all Falmouth condos presently on the market to be sold. A balanced market is around 5 months.
|Dec. 31, 2008||May 15, 2009||July 31, 2009|
|Sales % of Original List Price||85.3%||85.2%||89.5%|
|Sales % Of List Price||92.7%||94.57%||94.1%|
Here are some Falmouth Real Estate statistics by price range:
|$0-$299,000||$300,000- $399,000||$400,000- $499,000||$500,000 and up|
|Sold (6 Months)||9||6||4||5|
|Average Days On Market||188||257||92||267|
Cape Cod Real Estate Positives:
- The fact that the number of Cape Cod condos listed for sale is down 11% is a good sign.
- The absorption rate is also down.
Cape Cod Real Estate Negatives:
- The average sales price is down 10% from the same period a year ago (2008: $407, 812; 2009: 367, 576).
- In the past six months, 53 Cape Cod Area condos have come on the market while 22 have been sold.
Conclusion: The continued downward pressure on sales prices means that the Cape Cod home buyers market continues.
Until next time,
The downward pressure on the sales prices of Cape Condos continues as the challenges of getting financing continue.
The very same condo that I mentioned in May had a new buyer and a new lender and fell apart again at the last minute. This time it was about the buyer’s income. Needless to say, the bank (in this case Citizens Bank) had preapproved the buyer, received all the information requested in a timely manner, and gave no indication of a problem until the day of the final commitment when they issued a “declination letter.”
Another condo in a very well managed, well funded complex that has never had a special assessment, is under agreement with a strong buyer. The buyer is putting 20% down. Yesterday, the date of the final commitment, the lender (Provident) could not meet the original commitment date because their underwriters are backed up. The commitment is now due next week. Stay tuned.
You Can Buy A Cape Cod Condo At A Great Price
Needless to say, this continues the downward pressure on condo prices because buyers are reluctant to get involved.
On the bright side, however, I do have a closing today on a very nice Cape Cod condo. Bank of America is providing the financing for this one.
Until next time,