Housing Market Starts to Rebound; Inventory Shortage Squeezing the Market and Escalating Prices
June 15, 2020 Research & Data
Buyer activity in the Cape Cod market is greatly increasing as coronavirus restrictions ease, however, the lack of homes for sale creates uncertainty on further rebounding of the housing market. The month of May ended with an expected steep decline in homes sold, but an uptick toward the end of the month in homes going under contract – indicating a return of buyer activity. The median sales price is also increasing as the inventory shortage squeezes the supply in the market.
“Right around the middle of May we saw a shift in the market. Buyers went from being interested and looking online at homes, to getting out there and making offers to purchase. This led to two straight weeks of year over year increases in homes going under agreement to end the month of May and a trend that has continued in to the first half of June.” said Ryan Castle, CCIAOR CEO.
According to data released by the Cape Cod & Islands Association of REALTORS®, home sales were down significantly in May – a year over year drop from May 2019 of 47% decrease in single-family homes and a 45% decrease in condominiums. The decreases reflect previously reported drops in pending sales from both March and April due to the ongoing pandemic.
In May, 298 homes sold in Barnstable County through the Cape Cod & Islands Multiple Listing Service, 239 single-family homes and 59 condominiums. Median sales price was $454,500 for single-family homes and $270,000 for condominiums. Last May, 555 homes (448 single-family homes and 107 condos) sold at a median price of $427,000 for single-family homes and $286,500 for condominiums.
Sales pending at the end of May were 405 for single-family homes and 84 for condominiums – a 12.3 percent decrease for single-family and a 32.3 percent decrease for condominiums, which will show up in closed home sales in the coming months. Last May, there were 462 pending single-family homes and 124 pending condominiums. However, as previously noted – the last two weeks of May (May 17 through May 30) were the first two weeks since the first week of March that shows a year over year increase.
“Cape Cod has a real inventory shortage of available homes for sale. At the end of May, we have less homes for sale then we did on March 1. When you compare that to 2019 – where we saw a 18% increase in inventory – we have a housing availability crisis, which will escalate our housing affordability crisis. Buyers are more willing to buy in today’s environment than homeowners are willing to list their home for sale,” Castle said.
At the end of May, there were 1,479 single-family homes for sale and 449 condominiums for sale in the Cape Cod & Islands Multiple Listing Service. Last May, there were 2,050 single-family homes and 558 condos listed for sale, a 27.9 percent decrease, and a 19.5 percent decrease, respectively.
New listings in May for single-family homes were 458 and 103 for condominiums. This is a 27.9 percent decrease, and a 36 percent decrease respectively from last May, which had 635 new listings for single-family homes and 161 new listings for condominiums.
Cumulative days on market for May decreased 1 percent for single-family homes compared to last May, dropping from 103 days to 102 days. Condominiums had a 8 percent increase in cumulative days on market compared to last May, rising from 100 days to 108 days.
All data released reflects all single-family homes and condominiums in the Cape Cod & Islands Multiple Listing Service for Barnstable County.
View town-by-town market reports at CapeCodRealEstateStats.com.