Cape Cod Market Report & Forecast Q2 2017

Cape Cod Market Report & Forecast: Q2 2017

Market still Strong — but Slowing down!

The Cape Cod real estate market is still Strong — but is showing signs of Slowing Down. The median sold price continued to go UP, but Dollar Volume was Down in Q2 due to lower sales.

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 Complete text for this report:

Intro:

The Q2 market cooled a bit, but remained strong.

The data for this report is for: Single Family Homes – in Barnstable County – listed on Cape Cod and Islands MLS.

Dollar Volume:

Dollar Volume is the Total Sold Dollars for the quarter.

The Dollar Volume in Q2 was: $666 million – 368 thousand – and 008 dollars. As expected, Quarter-to-Quarter, this is UP a lot (63%) from the $409 million in Q1. More important is that, Year-to-Year – Dollar Volume was DOWN a bit (3%) from the $678 million in Q2 2016.

Dollar Volume History:

Like # of Sales and Median Sold Price, Dollar Volume also has the seasonal Q1 DiP. In this time frame only Q2 2016 had a higher Dollar Volume.

Median Sold Price:

The median sold price in Q2 was $400 thousand dollars.  Quarter-to-Quarter, the median price was UP 7% from Q1. More interesting and more important is that, Year-to-Year, the median price was UP again – an amazing 8% from Q2 2016.

Five-Year Price History:

Year-to-Year, the median sold price continued to go UP. It’s gone UP in each of the last 5 quarters – and in 17 of the last 19 quarters. At $400K this Q2 has the highest median price since 2007. Note, it is still 5% lower than the highest quarter ever – $419K in Q3 2007.

Price Indicators:

I also follow three other price indicators:

1: The total number of listings Under Contract has gone Down for 2 quarters in a row. This is mostly likely the result of the seasonally high sales in Q1. This is a key indicator for both Price and Sales.

2: The median Price-Per-Square-Foot went UP again in Q2 – the 5th quarter in a row – and the 17th increase in the last 19 quarters.

3: Although the changes are subtle, Sold Price -to- Original List Price Ratio is a useful predictor of future prices. It has now gone UP 9 quarters in a row. The 96.3% it is the highest since the 96.7% in Q2 2005.

This ratio is also a good indicator of the accuracy of listing agent’s original price. A special report on how their accuracy compares to the accuracy of Zillow Zestimates is coming soon.

Number of Sales:

The number of single family homes sold in Barnstable County in Q2 was 1,228. As expected from the Q1 DiP, Q2 Sales were UP big – 53% from Q1. But, the more important Year – to – Year results were not GOOD NEWS. Q2 sales were Down 9% Five-Year History:

Five-Year Sales History:

Here are the Quarterly Sales numbers since 2013. Note, Sales always go UP from Q1 to Q2. This upside of the Q1 DiP has happened every year in this century. The 53% increase is the lowest in this decade. Year-to-Year, the 9% decrease in the Number of Sales breaks a 10-quarter streak of increased sales.

Sales Indicators:

It’s also interesting to look at three other market indicators that either affect the number of sales, or are affected by the number of sales.

1: Inventory represents the total number of active listings at the END of a quarter. At the end of Q2 Inventory was UP 11% from Q1 – but Down 25% from Q2 2016. This is the lowest inventory since Q2 2004. And, this is the 11th quarter in a row that, Year – to – Year, inventory has gone down.

2: Year -to-Year, the Absorption Rate went DOWN in each of the last 10 quarters. The Q2 rate of 4.7 months is also the lowest since Q2 2004.

This is all a good thing for sellers, but not a good thing for buyers.

3: The Downward trend in the Number of Listings Under Contract correlates with the Lower number of Sales.

Forecast Review:

Before I give you my forecast for the NEXT Quarter – let’s review my previous forecast for This Quarter. My goal for these forecasts is to be within + or – 5% of the actual result.

My forecast for the median sold price in Q2 was $403,000. The actual result was: $400,000 – one tenth of one % LESS than my forecast.

My forecast for number of sales in Q2 was 1,261. The actual number of sales was 1,2282.7% LOWER than my forecast.

Price Forecast:

I believe that the Median Sold Price will continue to go UP again in Q3 – but more slowly.

My forecast for the median sold price in Q3 is: $400,000 dollars. Quarter-to-Quarter, it will be Even with Q2. More importantly, Year-to-Year, the median sold price will be Up a modest 3.9% from Q3 2016.

This will mean that over the last 5 years the Median Sold Price will have gone Up in 18 of the last 20 quarters.

Sales Forecast:

Sales will be Down in Q3, but still at a relatively high level. My forecast for the number of sales in Q3 is: 1,055. Quarter-to-Quarter, this would be Down 14%. More importantly, Year-to-Year sales will be Down 7% from Q3 2016. High prices will continue to drive down sales.

 

Summary:

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Thanks for watching – and wishing you smooth sailing on the seas of life.