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Cape Cod recently concluded its third March in a row where the spring homebuying season opened with fewer than 400 single-family homes on the market. 

And with March’s tally of new single-family listings off almost 20 percent year-over-year, according to the Cape Cod & Islands Association of Realtors, buyers and sellers are looking at another spring of tight market conditions. 

“Sellers are still getting strong numbers” when bids come in on their homes, said Coldwell Banker agent Shana Lundell, with multiple offers and waived contingencies common, even if the total number of offers might be lower than during the peak of pandemic homebuying frenzy. 

The latest data from The Warren Group, publisher of Banker & Tradesman, shows Barnstable County’s median single-family sale price hit $640,000 last month, up 12.18 percent from March 2022 and a new high for the month of March. 

Pandemic Buyers Stay Put 

It’s clear the hoped-for supply of homes coming onto the market from pandemic-era buyers getting called back to the office full-time isn’t materializing, agents say. 

Many corporations’ decisions to retain remote work-friendly policies appear to be letting some people who bought a second home on the Cape over the pandemic, or who want to buy one this year, decamp there for most of the summer with their families, said Sandi Lacasse, a Realtor in Jack Conway’s Sandwich office, even if they have to spend a few days a week at their main home in order to visit the office in person.  

This same trend is letting people in their 50s who might have wanted to retire to the Cape move despite having plenty of years left in their working lives. 

“It feels like a change in our culture,” she said. “They’re pulling the trigger much earlier [in life] than they used to.” 

In other cases, said Paul McCormick, a Realtor with Gibson Sotheby’s International Realty’s Chatham office, these homeowners have realized their purchase has turned into a useful income-producing vacation rental.  

The average daily rate for a short-term rental hit $424.16 a night in February, according to industry analytics firm AirDNA, a 32.1 percent increase year-over-year as occupancy rates jumped. 

Mortgage rate-locks for second homes have fallen to half of pre-pandemic levels nationwide, according to Optimal Blue data reported last week by brokerage and listings portal Redfin amid economic uncertainty and stock market weakness that traditionally has discouraged wealthy buyers from spending on big assets. 

“They have the financial means to wait it out,” said Redfin Chief Economist Daryl Fairweather. 

Many downsizers face the choice of staying put or moving off-Cape, an option many longtime residents are reluctant to pursue, agents say. iStock photo

No Cavalry to the Rescue 

If buyer’s remorse isn’t going to fuel inventory recovery on the Cape, agents and other market-watchers interviewed for this story said other prime sources of homes for sale aren’t likely to ride to the rescue, either.  

Some sellers are still worried about potential for economic turmoil more than a month after the high-profile failure of Silicon Valley Bank, but for many others, it’s simply a matter of logistics. 

“If they have to sell [their current home] to buy, there’s not a lot of inventory so they’re reluctant to put it on the market,” Coldwell Banker’s Lundell said.  

Many downsizers, in particular, feel stuck, said McCormick, with little housing that meets their needs for properties like townhomes with less upkeep, or a desire to spend retirement in a well-amenitized development.  

“Their only option is moving to Florida full-time or some kind of condominium setup off Cape Cod,” he said. “We’re in a holding pattern with a lot of people.” 

And, if a seller can’t afford to float a second mortgage, or doesn’t want to risk moving into a winter rental in order to be ready to bid on homes as they hit the market in spring, they’re in a tough spot. 

“Another family I was working with, they knew they had outgrown the house, they wanted to trade up. They could make the numbers work but only if the house was under agreement,” Lundell said. “You have to be creative.” 

Her clients chose a buyer from multiple offers who was willing to waive a home inspection and lease the property back to them, even though the price they offered was less than competing bids. Luckily, they were able to get an offer accepted on a new home quickly, but having the flexibility of a leaseback clause “was absolutely a wonderful opportunity,” she said.  

“The second-home buyer and the remote worker have more available income to beat them out on that house,” said Ryan Castle, CEO of the Cape Cod & Islands Association of Realtors. “And the wages just aren’t there to support what our housing prices are on the ground, because we’ve limited supply for generations, artificially. It makes it really tough for the year-round resident.” 

Cape single-family inventory rose 8.8 percent on a year-over-year basis in March to 360, CCIAOR reported, but with only 282 houses hitting the market in the same month, the market is a long distance from the 1,500 to 2,000 homes on the market in Marches before the pandemic. 

Buyers Still at Disadvantage 

Even with inventory this low and financing conditions much tougher than last spring, plenty of buyers are still eager to outbid each other on homes, just with perhaps less fervor than in the last three years.  

“That sweet spot of $550,000 to $850,000 is still achievable for a lot of buyers. If it’s priced well, looks good and is in a good location, we’re seeing it go over asking,” said Gibson Sotheby’s McCormick. 

James Sanna

One thing that is a sure-fire deal-killer, Lundell and other agents interviewed said: making an offer contingent on the sale of the buyer’s current home. 

“I am seeing home inspections again – although not always,” Lundell said. “[In 2020-2021] we were seeing escalation clauses, appraisal gap waivers, but I’m not seeing them that much today.”  

Still, sellers who have visions of enormous price jumps in their heads are having to be reeled in by their agents, Jack Conway’s Lacasse said, lest a too-high list price generate price reductions that will encourage buyers to lowball their offers.  

“You definitely have to bring your A-game. When you go on a listing appointment, you have to be prepared to show them the market, show them different price points and what share of the market they’ll capture at each one,” she said. “My methodology is always price it really reasonably. Don’t try to have the 2021 list price – the consumers will drive it up [instead].”