It’s A Buyer’s Market On The Cape

Correction appended — Bill Silver is trying to sell a one-story, weathered shingle home that he calls cute. “Now I don’t have any taste, so I don’t know what cute is,” says Silver, a real-estate agent with Kinlin Grover in Harwichport, “but I know that the buyers think it’s cute.”

The two-bedroom house is decorated with eclectic art and painted furniture. It’s on the market for $425,000, which is $25,000 less than the owners were asking a few months ago. And if there are no offers in the next few months, Silver says they’ll have to go lower still.

This two-bedroom home in Harwichport is on the market for $425,000, which is $25,000 less than the owners were asking a few months ago. (Courtesy of Kinlin Grover GMAC Real Estate)

“The market talks to you. It says hello or it doesn’t talk to you at all,” Silver says. “So if you’ve done everything you can do to market the house, then in the end it’s the prices.”

Prices for property on Cape Cod went up 138 percent between 1999 to 2005. Since then, they’ve been falling. Last year, in total, prices fell 13 percent compared to the year before. In the first half of this year, they have taken a 12 percent nosedive.

But the ups and downs of the Cape market are different than the rest of the state because it’s a vacation home market.

“We’re not forced to sell because it’s not our primary residence, but we would like to sell,” says Gail Hickey, who owns the “cute” Harwichport cottage. Her sentiment is shared by most of the sellers on Cape Cod: second-home owners are not under the gun.

Hickey’s vacation home has been on the market for six months. “We haven’t gotten frustrated yet because we put it on the market to see what would happen,” she says. “We’re not chomping at the bit because it’s not selling, we’re willing to wait until the market opens up.”

But so far the market continues to fall.

Aglaia Pikounis, with the real-estate data firm The Warren Group, says tumbling prices are affecting all towns on the Cape. “Take Truro,  it’s dipped 39 percent,” Pikounis says. “Another area with a steep decline in prices was Osterville. There were 18 single-family home sales in the first half of the year, and the median prices dipped about 37 percent.”

Real-estate trackers warn these numbers don’t mean all home values are down by this much, it most likely means only smaller, lower-priced homes are selling. And prices are being driven down by foreclosures and short sales. Hyannis is one of the 10 communities with the highest foreclosure rates in the state.

One buyer, Mark Andrade, was surprised when he went bargain hunting. “As we went into it, we thought the prices would be lower than they actually were,” Andrade says, “that part of the Cape — the Outer Cape, Eastham, Wellfleet and Truro — was holding their own as far as the market goes.”

Still, Andrade found what he thought was a good deal, a four-bedroom house in Eastham for $435,000, and bought the vacation home in June.

Andrade is the exception. What’s really distressing real-estate agents is the slow pace of sales.

“Lately, it’s pretty ugly,” says real-estate agent Bob Sheldon, who sells second homes in Eastham on the Outer Cape. “What’s happened is that the people who are in our traditional middle space, which is somewhere between $450,000 and $600,000, there’s nobody buying. Zero.”

In Eastham, 30 homes sold in the first half of this year, 33 percent fewer than the same time last year. Cape-wide, sales are down 21 percent, double the state’s rate.

Agent Bill Silver said the market abruptly changed last fall when the market plunged. “It sent a lot of buyers home,” he said. “It sent many of my buyers home, I know that because they were afraid of jobs.” Now buyers are waiting — waiting for the bottom or to see if their company will have layoffs or if the stock market will go up.

Real-estate agents always say now is the perfect time to buy. But agents on Cape Cod say now really is a good time, because of the combination of a lot of homes languishing on the market and slumping prices.

Correction: The radio version of this report incorrectly stated the amount by which Silver reduced the asking price of his two-bedroom home in Harwichport. The correct amount is $25,000.