Category Archives: Blog
January 2017 Real Estate Market Update
The traditionally slow first quarter on the year in the Cape real estate market looks to take a similar pace as years past while reviewing January activity. The small sample size after the first month of 2017 see similar trends to 2016. The main headline continues to be historically low inventory. At the end of 2016, there were 5975 homes for sale in the Cape’s 15 towns. We need to look back to the spring of 2004 to see a lower number of homes for sale. This low inventory environment has pushed prices up and demand has stayed more consistent. Across the Lower Cape towns of Brewster, Chatham, Harwich and Orleans, average prices are up modestly YTD.
We anticipate steady price appreciation going through 2017. The remarkably low inventory and steady sales volume seem to leave no other alternative. Interest rates are still at historic lows and the loan products in the market are becoming more diversified and readily available. Value in the market can still be found in properties that need updating. Most of the price appreciations are coming from recently renovated or constructed homes. Our access to construction resources is a strong asset in the current market and leads us to advise our clients: if you can’t find you the perfect Cape house, look to create it.
Category Archives: Blog
Proposed Occupancy Tax Targets Urban Areas, not Cape and Islands
Cape home owners and property managers have been waiting with baited breath as a proposed occupancy tax made it’s way through the state capitol for the past decade. Recent news suggests that the new occupancy tax targets only those properties that have short term rentals for 150 days or more of a calendar year. Most Cape properties rent for fewer than 150 days. The Cape’s prime season is usually 60-65 days, and with June and September added, the total day increases to about 120. Occupancy in June and September tends to average between 35-35% so this new tax will not affect the economics of most vacation rental properties. The details of the bill are forthcoming and we will pass those along when available. Good news to be sure.
Category Archives: Blog
2016 Construction Review
Construction and renovation activity on the Cape has been strong again in 2016. Compared to 2015 there has been an 8.2% increase in the number of building permits issued in Barnstable County. By contrast, the value of those permits actually decreased by about 7%. The decrease in the value of the permits is due to less new construction and more remodeling permits being issued. Still, 2016 ranks in the top three in permit value and permits issued in the past 10 years. *
On the Lower Cape, we have seen this busy trend continue as well. Chatham continues to be one of the most active with regards to construction and renovation. As mentioned in the sales market review, since there is historically low inventory, we are seeing buyers pay a hefty premium in many cases for a newly renovated or constructed home.
Beyond the numbers, we have had some valuable experience in 2016 with allowable uses of properties on or close to conservation resources, most notably water or wetlands. Many potential or current property owners assume that conservation by-laws are written in stone. When in actuality, there is room to work with town officials to accomplish a goal or most of a goal. Of course it takes more time and money to go through the process, but in most cases, not a prohibitive amount of either. And if planned properly, the project can significantly increase the value of a property for enjoyment and market value.
Over the past year, we have been fortunate to work with many current and potential buyers to find solutions to problems that the general market overlooks. Having a team with expertise in construction, zoning and conservation can help create a unique property that may not exist on the current low-inventory sales market.
*Source: Home Builders and Remodelers Association of Cape Cod
Category Archives: Blog
2016 Cape Cod Real Estate Review
2016 was a very interesting year for the Cape Cod region with historically low inventory of available homes leading the headlines. The 14% year over year decrease in actively marketed homes on the Cape and Islands MLS resulted in 2016 ending with the lowest recorded inventory level since that statistic had been tracked. This is an astounding 48% drop from the 10 year high. Interestingly, despite this clear lack of supply, pricing has only posted a modest gain (2.7% over 2015) while sales volume showed a more impressive jump (up 13%). The takeaway: the lower end of the market (<$500,000) has been most active. By contrast, we have seen record setting purchases in many towns:
Brewster: $3,450,000 96 Winterhoff Trail
Chatham: $10,800,000 132 Shore Rd
Dennis: $3,050,000 9 Mark Rd
Harwich: $8,150,000 6-10 Neel Rd
Orleans: $7,000,000 47 Nauset Rd
Looking forward, it seems inevitable that interest rate increases will continue at a modest clip. These increases will be tempered by expanded lending products and increased loan-to-value ratios so we do not anticipate the increasing rate environment to significantly impact price appreciation.
Anecdotal feedback from existing customers/clients suggest there are two distinct groups of prospective buyers in the current market: those looking for a “deal” or those looking for something that is new or newly renovated to call their own. The deal seekers hunt for near term equity opportunities and are willing to deploy minor improvement efforts to achieve their goal. Inventory, or lack thereof, has been particularly frustrating to these buyers as sellers simply are not overly motivated to provide the value they seek. By comparison, turn-key buyers are willing to stretch to have the home in move-in condition and, in some cases, overlook the near-term asset value for convenience. This prioritization of one’s personal enjoyment over the asset value has been the primary driver of the region’s speculative development business at all price points.
Looking into the crystal ball, we anticipate a solid improvement in pricing in 2017. The relative affordability of financing, demographic patterns and scarcity of inventory should lead to positive appreciation gains in 2017 for Cape Cod Real Estate.
Category Archives: Blog
Vacation Rental Market Growing Rapidly
On Cape Cod, the vacation rental market has been strong for decades, but continues to see an increase in inventory each year. This trend can be seen far beyond New England. Here’s an excerpt from one industry specialist from Parakeet home automation:
“Everyone in the vacation rental world is aware that the industry is growing quickly. With massive travel companies like Priceline and TripAdvisor getting into the mix, and tons of startups popping up on the periphery to help VR managers run their rentals, business is booming. As more travelers become aware of the option of renting vacation homes thanks to the success of companies like Airbnb and HomeAway, it seems that rentals will continue to grow well into the future.
A recent study estimated that the industry will grow at a rate of 7.59% every year until 2019, putting the market value at $169.7 billion by 2019, just three years away. Much of the growth is coming from North America and Europe, particularly in Europe, which held the largest market share in 2014 and continues to do so.
Another factor is increased awareness of the option of renting a vacation home. According to an internal study at Airbnb, 47% of people surveyed weren’t even aware that vacation rentals existed. As the popularity of affordable travel accommodations grow, awareness of the option will grow as well through word-of-mouth and marketing, which is a great sign for the industry at large.”
Category Archives: Blog
New Bridge in Chatham May Impact Real Estate Values
The second major culvert and bridge redesign on the Cape in the past few years looks to significantly improve the aptly named Muddy Creek on the Chatham town line. This will likely has some promising effects on real estate values, especially on the Chatham side.
One of the most scenic drives on the Cape is along Route 28 on Pleasant Bay between Chatham and Orleans. Rarely on the Cape do you find so many water views and waterfront roadsides. Harwich has a section of road along this route and this is where you find Muddy Creek that serves as the town line between Chatham and Harwich. The new bridge is close to completion and it should significantly impact the tidal flow and make Muddy Creek potentially less muddy and certainly more navigable for kayaks and SUP boards. This may have a very positive impact in real estate values abutting the creek most notably in the Riverbay neighborhood in Chatham.
Category Archives: Blog
Fido Fills Weeks
“No smoking, no pets” is a common mantra for many rental property owners.
Not renting to the Marlboro Man probably won’t cost you many bookings, but you might want to rethink barring those four-legged family members categorically.
Less than 10 per cent of Pretty Picky Properties accept pets and almost never have a problem booking all summer weeks, often earlier than “No Pets” properties. That’s because probably 20 or even 25 per cent of our inquiries have a Muffy in their vacation plan.
Of course, every dog owner says his dog never barks, never sheds and will never get up on the furniture. We had one dog’s master confide to us that his dog is so smart that he actually talks. The pup was indisposed, however, when we asked the guy to put him on the phone for a brief interview.
Not only does leaving the dog at a kennel during the family vacation cause separation anxiety, it costs some serious shekels. So families are motivated to find a rental home that accepts pets. Sometimes, they’ll pay extra for the privilege.
First, understand that pets are not a protected class under the Fair Housing Act. You can advertise “Pets Considered,” then decide case by case, yea or nay. You can rent one week to a family with a six-pound, well trained Pomeranian, then just say “No” to the group with the twin Palominos. This is totally your call.
Pet owners frequently will pay a higher security deposit to give you greater peace of mind. Fine, and let’s remember, every Pretty Picky guest signs up for damage protection insurance that pays up to $1,500 for accidental damage that might be caused by you-know-who.
We have even had cases where a desperate pet-owner offered additional rent if his pet were allowed.
And we have to admit that in our experience, the impact of a pet, including any damage or even extra dog hair for the turnover day cleaning, has been next to nothing. Pet owners are almost universally good about picking up after the pooch, and they understand that most beaches do not allow dogs at all in the peak summer season.
“Pets Considered” might be something for you to consider. It could mean booking weeks sooner, filling stubborn week periods, or even increasing your rental revenue.
Category Archives: Blog
No new natural gas hook ups until 2019
There will be no new natural gas connections on the Lower Cape for quite a while. A recent inspection of National Grid’s main transmission line revealed some deficiencies requiring upgrades that will take up to five years to complete. Meanwhile, the company has to reduce the pressure in the line. And that means no new demands from new customers. Existing customers and gas supplies are not affected.
The new hookup moratorium also impacts new construction and renovation projects in which a natural gas connection was part of the plan. Towns affected are Dennis, Yarmouth, Brewster, Harwich, Chatham, Orleans, Eastham and parts of Barnstable.
But wait – National Grid is making some exceptions, especially for existing customers who want to add a natural gas, emergency back-up generator or outdoor barbecue grill. These pieces of equipment are used mostly when overall demand for natural gas is low, so they will not increase the total demand on the system.
And there’s more good news. If you want to build or renovate on the Cape, there’s almost always a way to work around problems and get what you want without the wait.
Propane is a smart alternative to natural gas, at least as an interim solution. You can convert to natural gas later, after the moratorium expires, and use many of the same mechanical components. So your added cost for the conversion is not that much at all.
Bottom line: the moratorium on new natural gas hookups does not have to derail your construction or renovation plans or blacklist that house you love with oil or electric heat. Just be sure your first hookup is with a can-do problem solver vs. a builder with stock responses and off-the-shelf plans.
Category Archives: Blog
New Tax on Vacation Rentals?
Currently, a short term vacation rental on the Cape is not subject to the hotel/motel tax. But it could be soon, if some Massachusetts lawmakers have their way. Check out the story at this link:
http://boston.cbslocal.com/2015/07/21/cape-cod-lawmaker-proposes-bill-to-tax-vacation-rentals/
Seems to us that this proposed tax raises some significant issues. For example, the argument for the tax maintains that towns need the extra revenue because of the all the extra services they must provide during the summer, such as extra police and fire personnel. But the other side of that argument is that second home owners on the Cape pay plenty in property taxes already, and use far less of their town’s services than year-round residents with children in schools, etc. So isn’t a tax on vacation rentals penalizing the taxpayers who already pay more than their fair share?
Adding a healthy tax on top of an already robust rental rate will decrease rental appeal for many vacationers to be sure. And if such a tax were implemented in some Cape towns and not others, imagine the impact on the unlucky owners whose town elected to apply the tax. Would those owners have to absorb the tax themselves in order to keep their rental rates competitive?
Passing any such tax feels like a slippery slope to us. We’ll keep watching as things develop on this important issue.
Category Archives: Blog
Thought about keyless door locks?
We sure have. Keys can be a problem. They get lost a lot. Or just never get returned by rental guests and contractors. For the purpose of security, we never indicate a property’s street address on our key tags. We also charge guests $25 for a lost key to motivate more careful key handling. And when, on departure day, we don’t find the two keys we provided, we aggressively pursue the missing key. Truth is, we have only mixed success. We have heard more than one owner darkly joke that “By now, most of the Lower Cape must have a key to my house.”
Many owners stash a key at the property to facilitate the situation when a rental manager or authorized contractor needs access and doesn’t happen to be carrying a key. We are very thankful to owners who stash a key, as it can be a huge convenience for us and others. But we must admit there is certainly some security risk in the practice.
Keyless entry may be something to consider. We are seeing it more and more these days, especially as part of new construction or renovations, although almost any door, including a slider, can be converted to keyless entry.
Instead of a key, you use a code, set by you and changed or even customized by individual user. Electronic keyless systems can report who’s coming and going and when at your property, giving you unprecedented security, control and peace of mind.
Even a power outage isn’t a problem if your keyless system has battery back-up or operates mechanically.
Of course, no locking approach is foolproof. If you or we or a guest can lose a key, we can certainly forget a code. Or forget to tell those who need to know that the code has been updated. But wait – how about a keyless lock with a fingerprint reader? Ahh, new technology at work for you!
If you’re interested in exploring keyless door locks for your Cape property, here are a couple of links to check out:
https://www.biggerpockets.com/forums/84/topics/118284-keyless-combination-entry-locks-a-good-idea