Cape Cod 2022 First Quarter Market Report
April 18, 2022 Research & Data CCIAOR Data and Research
1) Sales Decline, but Let’s Look Historically
We traditionally look at real estate numbers in comparison to the previous year, which gives you a good indicator of what to look at with adjustments for seasonally specific anomalies and by providing something for you to compare it to.
We knew the number of real estate sales in 2022 was going to be down, and we saw this play out in the 1st quarter. The total number of residential real estate sales fell by 22% for the first quarter compared to the 1st quarter of 2021 - and that was the same percentage drop for March 2021 to March 2022.
Looking further into the market history, the number of sales were still down in March compared to what we traditionally expect to see in that month. However, the volume of total sales in March 2022(the value of all residential sales combined), was the third highest March ever on record (only less than 2020 and 2021).
So, while the number of sales is lower, the higher median price is keeping the volume of real estate sales on Cape Cod at high levels.
Here is a look back at 1st quarter residential sales on Cape Cod over the last 5 years to put today’s market in perspective.
2) More Than Half the Market Closes for Above Asking Price
As inventory has shrunk, we’ve seen a lag in price between the comparables and new listings, which is creating pent up demand that is taking properties above list price.
More than 53% of the properties that closed in March went for above list price, making March 2022 one of the highest months we have seen throughout this historic run on Cape Cod real estate for homes closing above list price.
The other intriguing metric we have been tracking - the percentage of cash deals - looks like it has settled in for now. The amount of cash deals is holding steady at about ⅓ of the market. For comparison, pre-pandemic this metric was traditionally at about ¼ of the market being cash transactions.
What to Look for Coming Up
As interest rates rise in general and new Fannie Mae rules were implemented on April 1 on second home loans, will we see a rise in cash sales moving forward? Also, what impact will both the rising rates have on our marketplace?
Drop a line to Rcastle@CCIAOR.com to let me know what you are seeing about buyers and interest rates.
3.) 1st Quarter Stats are 'Year-to-Date' Stats on Market
Many ask us ‘Why do you not do 1st quarter statistics?’ The answer is - we do.
The ‘Year to Date’ stats on our Cape Cod Market Report handouts for March are a 1st quarter statistical report as it covers the year to date, January through March - aka the 1st quarter.
March Market Report: Market Activity Down as For Sale Inventory Continues to Decline in 1st Quarter
According to preliminary data released last week by the Cape Cod & Islands Association of REALTORS® (CCIAOR), 855 homes were sold in the 1st Quarter of 2022, 663 single-family homes, and 192 condominiums. The median sales price was $650,000 for single-family homes and $425,000 for condominiums. In the 1st Quarter of 2021, 1,093 homes (856 single-family homes and 237 condos) sold at a median price of $590,000 for single-family homes and $340,000 for condominiums.
Sales pending at the end of 1st Quarter 2022 were 718 for single-family homes and 221 for condominiums – a 24 percent decrease for single-family and a 22.5 percent decrease for condominiums, which will show up in closed home sales in the coming months. In the 1st Quarter of 2021, there were 945 pending single-family homes and 285 pending condominiums.
At the end of the 1st Quarter of 2022, there were 274 single-family homes for sale and 93 condominiums for sale in the Cape Cod & Islands Multiple Listing Service. At the end of the 1st Quarter of 2021, there were 378 single-family homes and 148 condos listed for sale, a 27.5 percent decrease, and a 37.2 percent decrease, respectively.
“We are seeing the expected decline in total sales brought on by the persistent levels of low inventory over the last two years.” notes CCIAOR CEO Ryan Castle. “What we are watching into the future is how consumers respond to rising interest rates and new rules governing second home loans by Fannie Mae, which might just give cash buyers even more of an upper hand moving forward."
Within the 1st Quarter of 2022, there were 209 single-family homes and 186 condominiums for sale with a list price of less than $500,000. Within the 1st Quarter of 2021, there were 407 single-family homes and 290 condominiums for sale with a list price of less than $500,000, a 48.6 percent decrease, and a 35.9 percent decrease, respectively.
Cumulative days on market for the 1st Quarter of 2022 decreased 52.1 percent for single-family homes compared to the 1st Quarter of 2021, dropping from 73 days to 35 days. Condominiums had a 46.3 percent decrease in cumulative days on market compared to the 1st Quarter of 2021, dropping from 82 days to 44 days.
Data released reflects all single-family homes and condominiums in the Cape Cod & Islands Multiple Listing Service for Barnstable County.