Cape Cod Reall Estate Market Report & Forecast: Q3 2017

Cape Cod Real Estate Market Report & Forecast: Q3 2017

Market continues Split Personality

The Cape Cod real estate market continues its split personality – with $Prices continuing to go UP and #Sales continuing to go DOWN. The forecasts for Q4 are quite surprising and continue this trend. BONUS: don’t miss the new slide on Sold Prices vs. Assessed Values.

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Note: Featured in this report is the bucolic North Street bridge over the Herring River in West Harwich  – and the amazing music of (then) 9-year old Anna Deutscher.

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Complete text for this report:

Cape Cod Real Estate Market  – Q3 2017

INTRO:

Hi, I’m Bill Silver. I’m a realtor with Cape Cod Associates in lovely downtown Harwich Port. Welcome to my Q3 Cape Cod Real Estate Market Report and Forecast.

Today I’m at the North Road bridge in West Harwich – which spans the bucolic Herring River.  It’s a sunny autumn day which blends the blues of the river with the yellows – reds – and greens of the trees and marsh.

Don’t miss the last slide. It features the most musically talented person on our planet, little Miss Alma Deutscher.

Dollar Volume

Dollar Volume is the Total Sold Dollars for the quarter.

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

The Dollar Volume in Q3 was: $629 million – 30 thousand – and 122 dollars. Quarter-to-Quarter, this is DOWN 6% from the $666 million in Q2. More important is that, Year-to-Year, Dollar Volume was UP – but less than 1% from the $626 million in Q3 last year.

Dollar Volume Chart

This chart shows the quarterly Dollar Volume for the last 4 years. It’s easy to see that Dollar Volume is always Lowest in Q1. At $629 million the Q3 Dollar Volume ranks 4th in the last 15 quarters.

Median Sold Price

The median sold price in Q3 was $400 thousand dollars. Quarter-to-Quarter, the median price was EVEN with Q2. More interesting and more important is that, Year-to-Year, the median price was UP again – a relatively modest 3.9% from Q3 2016.

Here are the Quarterly Median Sold Prices since 2013.  Year-to-Year, the median sold price continued to go UP. It’s gone UP in each of the last 6 quarters – and in 18 of the last 20 quarters. At $400K this Q3 result is virtually the same as the previous quarter. Yet, it really does represent an increase in sold price – since it’s 3.9% higher than the same quarter last year.

I also follow three other price indicators. The total number of listings Under Contract has now gone Down 3 quarters in a row. This is mostly likely the result of continuing higher prices outpacing the ability of buyers to buy the Cape house they want. This is a key indicator for both Price and Sales.

The median Price-Per-Square-Foot went UP again in Q3. Like Median Sold Price itself, this metric has gone up in 18 of the last 20 quarters.

Although the changes are subtle, Sold Price -to- Original List Price Ratio is a useful predictor of future prices. It has now gone UP 10 quarters in a row.

This data reminds us that listing agent price predictions are much more accurate than Zillow Zestimates.

Number of Sales

The number of single family homes sold in Barnstable County in Q3 was 1,109. Q3 Sales were DOWN 9.7% from Q2. More importantly, the Year – to – Year results were also Down 2.4% from Q3 last year.

Here are the Quarterly Sales numbers since 2013. Historically, the number of sales goes DOWN from Q2 to Q3 –80% of the time. You see here that it happened 4 out of the last 5 years. It also happened 12 out of the last 15 years. After going UP for 10 quarters in a row, Year-to-Year sales were down in each of the last 2 quarters.

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.

The Inventory indicator represents the total number of active listings at the END of a quarter. At the end of Q3 Inventory was UP 9% from Q2 – but more importantly Down 18% from Q3 a year ago. This is the lowest Q3 inventory since Q3 2004. And, this is the 12th quarter in a row that, Year – to – Year, inventory has gone down.

Year -to-Year, the Absorption Rate has gone DOWN 11 quarters in a row. The Q3 rate of 5.2 months is also the lowest Q3 rate since Q3 2004. This is all a good thing for sellers, but not such a good thing for buyers.

The Downward trend in the Number of Listings Under Contract continues – and correlates with the Lower number of Sales.

Assessment Ratio

For each sold property this RATIO is its SOLD PRICE divided by its Total Assessed Value.

The chart shows the yearly median Sold Price vs. Assessed Value Ratio for 14 years – starting in 2004. You can see that this ratio changes every year. It goes DOWN and UP as the market goes DOWN and UP. Typically, this ratio trails the market by a year or two.

Two caveats: (1) This chart shows this ratio for all of Barnstable County. If you are comparing multiple properties, you should use per-town data – and only compare properties in the same town. (2) Also, this chart shows the median results, but there is a very wide distribution of results – ranging from a ratio as low as 50% or as high as 150%.

Forecasts

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 accurate within 95% or more of the actual result.

My forecast for the median sold price in Q3 was $400,000. The actual result was: $400,000. Accuracy 100%. My forecast for number of sales in Q3 was 1,055. The actual number of sales was 1,109. Accuracy only 94.9%.

I believe that the Median Sold Price will continue to go UP in Q4 – and UP a lot. My forecast for the median sold price in Q4 is: $430,000 dollars. Quarter-to-Quarter, the median sold price will be UP 8% from Q3. More importantly, Year-to-Year, the median sold price will be Up an unusually high 10.3% from Q4 2016. Over the last 5+ years the Median Sold Price will have gone Up in 19 of the last 21 quarters.

Sales will be Down significantly in Q4. My forecast for the number of sales in Q4 is: 914. Quarter-to-Quarter, this would be Down 18%. More importantly, Year-to-Year sales will be Down a whopping 23% from Q4 2016. Higher and higher prices will continue to drive down sales.

Summary:

If you have any questions or comments about this report please call my cell or send an email:

  • 508-277-1000
  • Bill@BillSilver.com

You can see all my market reports at:

Cape Real Bill

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