If you want to buy a home in Falmouth, be prepared to act quickly and be willing to pay over market price. If you live far away, you might need to make an offer sight unseen.
The normally strong housing market in Falmouth and Cape-wide is booming as people are looking relocate to the area from the urban and suburban areas of the Northeast.
“To say the market is hot would be an understatement,” Jack Driscoll, Falmouth branch executive at Kinlin Grover Real Estate said. Typically, houses in Falmouth had been selling for about 95 percent of asking price, but now buyers from Boston suburbs, New York, Connecticut and New Jersey are gravitating to Falmouth, pushing home sale prices to an all-time high.
“Homes are on average $15,000 higher than median active prices, which means they are being sold over market price,” he said.
According to Barnstable County Registrar of Deeds John F. Meade, the volume of real estate sales across the Cape in July was up 42.6 percent from July 2019 volume, and the total value of sales was up 68.4 percent from the previous year. The median individual property sale value was up 18.2 percent from the previous year. The Cape Cod and Islands Association of Realtors just reported the median price of a single-family home was $498,950, compared with $435,000 a year ago.
Mr. Driscoll said houses in Falmouth fetch higher prices, as it is one of the Cape’s more affluent towns and estimated the average sale price in Falmouth now is well over $500,000. Admittedly skewed by a handful of seven-figure home sales, Kinlin Grover’s median sales price for single=family homes in Falmouth for July and August combined was $650,000, he said. Starter homes, mid-sized Capes in manicured neighborhoods and luxury waterfront property are all selling at a fast clip.
“It is not unusual for a house to be listed on a Thursday or Friday and be under contract by Monday. We have inventory, the same amount we typically have, but it’s just the demand is outpacing it,” he said.
Real estate agent Kerrie Marzot reports similar situation in her company, Sotheby’s International Realty.
“Homes in the $300,000 to $600,000 range are only on the market a day or two, with five to seven offers,” she said.
Not surprising, oceanfront homes fetch multiple bids, since there is strong interest in homes with ocean views.
After the COVID-19 crisis stymied real estate transactions in mid-March, with pens dropped and contracts left unsigned, the realization soon set in that the pandemic was not ending quickly. The result was people working from home offices and homes becoming the place to live, work and play. And Cape Cod offered a respite away from cities for people looking for beautiful surroundings.
The combination of low interest rates, coronavirus and low inventory is driving the surge, Ms. Marzot said.
“It’s the perfect storm of cheap money and people rethinking what work means to them. If they can work outside the office, they’d rather be on Cape Cod,” she said.
Mr. Driscoll has heard similar stories from clients.
“I know a lot of people only go to their office in Boston once a week or a few times a month. So people decided they wanted to leave the city’s suburbs, deciding if they could work from home, they wanted to do so where it is safer and offers nicer surroundings,” he said.
He estimated 60 percent of people buying Falmouth properties are from other parts of the commonwealth, with the rest from Connecticut, Rhode Island and New York. Younger buyers are purchasing primary homes here, and the homes sold to couples as a second home are being used as the primary residence.
With such a competitive market, clients are getting creative with bids, both Ms. Marzot and Mr. Driscoll said.
“Cash sales are up, and people are placing full-price bids or over asking price, often with no inspection,” Ms. Marzot said.
A typical sale would include an initial visit, and prospective buyers would come back about a week later with an inspector.
“Now, I tell them, ‘If you like it, you better move quickly,’” Mr. Driscoll said.
Clients have put offers in without laying eyes on it and relying on a virtual tour or a description provided by the agent, contingent on visiting the property.
“They are aware if they don’t lock it in, they will most likely miss out,” Mr. Driscoll said, noting an uptick in cash sales as people are nervous about the stock market, the state of the world and the upcoming election in November.
“People are taking money out of other investment vehicles to pay cash, instead of taking advantage of the 2.5 percent interest rate. They are looking at real estate as a more stable investment and want to secure property now,” he said.
While the market is a boon for those selling their homes, it is putting a squeeze on the rental market.
“It’s twofold,” Mr. Driscoll said. “If people can’t find a home to buy right away, they’re turning to the rental market. And people who may typically rent their homes in the off-season are choosing to stay on Cape longer.”
This is exacerbating an already tight housing rental market in Falmouth.
“The last two or three years there’s been a decrease in rental inventory, but it’s even worse this year,” Erika Capobianco of Foley Real Estate said.
On average, the company rents about a quarter of its 120-rental-home inventory for the nine slow off-season months from September to the end of May. This year alone she saw a doubling of winter rental reservations and has rented all the home leases beginning in September. She is halfway through the October stock.
The winter renters are coming from as far away as Florida.
“It’s a different demographic than in past years. A retired couple just sold their Florida home and wanted to be near her 90-year-old mother who is in Falmouth. Another couple both lost their jobs due to COVID but have plenty of savings and decided to come to the Cape. It’s not necessarily just people working here, but people with good credit and money in the bank looking to winter here,” she said.
Predictions are the housing market will begin to slow late fall, as long as there is not a resurgence in COVID-19 cases. Mr. Driscoll said by the first quarter of next year it could stabilize as long as “COVID is under control.”