Cape Cod Home Prices Struggle To Reach Pre-Recession Highs

When a prospective home seller contacts me about a market value for their property, I check the tax rolls to see when they purchased the house.  If they bought during the height of the market in 2006, they won't like what I have to say.  By 2016 their home is still not worth what they paid for it.  

In general the economy has recovered from the Great Recession.  Unemployment is down, incomes and the stock market are up.  But housing values on the Cape remain lower than they were at the start of the recession.  Condos are an exception.  They have shown an increase in value since 2006.  

The chart below illustrates the the arc in home pricing in Barnstable County-- Cape Cod excluding Martha's Vineyard and Nantucket. 

In 2006 the median price of a single-family home reached $400,000.  By the end of 2016 that same home was worth $375,000. 

​Now check condo prices.

At the height of the housing market in 2006 the median price of a condominium on Cape Cod was $263,000.  By the end of 2016, that condo was worth$277,000.

Inventory on Cape Cod and Massachusetts as a whole is historically low.  Right now there is a 4.5 month supply of homes for sale, meaning that at the current sales pace (demand), it would take 4.5 months to buy up everything on the market right now (supply).  

Part of the inventory problem is all the homeowners who would like to sell, but who purchased in the heady years of 2004, 2005 and 2006 and who cannot afford to take a loss. A spike in mortgage interest rates will continue to pressure home sales in the coming year as well.