A Softening Market Offers Solid Buying Opportunities for Careful Shoppers even on Cape Cod!

By  Julie   Bennett

For 17 summers, Boston stockbroker John Cleary rented vacation homes on Cape Cod . This summer, he bought one.

"My wife and I had been watching the market over time and didn't think we'd be buying just yet. But a house we'd looked at in Centerville a year and a half ago at a significantly higher price came down to where it became an attractive value," Mr. Cleary says.

The softening of the Cape Cod real estate market presents a good buying opportunity for careful shoppers. According to the Barnstable County Register of Deeds, sales in the first seven months of 2006 were down 21% from the same time last year and median prices were down 6.4%. For Mr. Cleary , it's a lot like the stock market. "I'm not bullish on Cape Cod realty," he says, "but I'm not bearish, because if I were, I wouldn't buy at all. We have five children and I see this house as a long-term investment."

Ann Quinlin , an associate broker at RE/ MAX Classic Realty in Marstons Mills , says this is the Cape 's first buyer's market in almost a decade. "Since the late 1990s, sellers have been seeing tremendous price increases, not yearly, but monthly. Now things are settling to the right level. In most cases, sellers start too high. Once they drop the price, we see a little burst of interest. Over the past month, in fact, we've seen multiple offers on a couple of properties," she says.

Longtime Cape Cod realtor Tom Cronin , president of American Heritage Realty in South Orleans , agrees that the present market reflects a "healthy reality." Last fall, he says, "we put a wonderful house in East Orleans on the market for $979,000 and nothing happened. This spring, the seller reduced the price to $899,000, and still nothing. By July, the seller went down to $799,000 and took an immediate offer for $779,000. Everyone's readjusting. The MLS (multiple listing service) hot sheet has a page of new price reductions every morning."

Pam Arena and her husband, Joseph , a retired pharmaceutical salesman, are among the buyers taking advantage of those reductions. In October, they'll move from Orange , Conn. , to a house in Marstons Mills with "a state-of-the-art kitchen, a lovely finished basement, a parlor, two family rooms and an above-ground pool in a landscaped back yard," Ms. Arena says. "When we first saw the house last November, its price was almost $300,000 higher. The day the price dropped; there was a line of people standing behind us, ready to make an offer." Unfortunately, people aren't lining up in Connecticut , where the market is also soft, and the Arenas' house there is still on the market.

Since so many buyers are waiting for deals, Cape Cod houses are staying on the market longer and inventories of homes for sale are at their highest levels in years. According to the Cape Cod and Islands Association of Realtors, on July 1 there were 4,418 active single-family listings, 42% more than a year ago. Last summer, there were 632 condominiums on the market; this year there are 1,100 and the total number of condos sold so far in 2006 is down almost 27% from 2005 sales.

Ms. Quinlin of RE/ MAX Classic Realty says the oversupply of condos can be pegged to the price reductions. "Until recently, it was hard for first-time home buyers to find anything under $300, 000," she says, "so they bought condos instead. Now we're seeing a lot of inventory of single- family homes in the $300,000 range." Condo prices, she adds, are dropping more than those for single-family homes.

Instead of reducing their prices, some sellers are simply taking their houses off the market. Jack Cotton , vice president of the Cape Cod region for Sotheby's International Realty, in Hyannis , says expired listings have gone up 90% from last year. " Cape Cod is a discretionary market," Mr. Cotton says, "and many vacation homeowners can afford to wait a year or two before testing the market again. The only people who have to sell are those who are scaling up or down, or those who are moving off the Cape altogether."

Prices are holding firm on upscale Nantucket , says Karen Gibbs , office manager and sales agent for Nantucket Real Estate. "We have as many $5 million-and-above houses under contract as any other year," she says. "People here are not in a situation where they have to sell."

If you, too, would like to negotiate your way into a Cape Cod house, realtors and recent buyers offer the following advice:

The Cape Cod peninsula is 100 miles long and contains 15 different towns. Begin by visiting, to decide just where you want to house hunt. Bob Poskitt , a retired chemical company executive, says he and his wife, Sue , had been vacationing on the Cape since their honeymoon in 1967. "We'd been talking about buying something for 40 years and the slowdown gave us the nudge we needed," he says. The couple drove to the Cape from their home in New Castle , Del. , every two to three weeks from January to May to look at historic houses. "We found a wonderful 1730 property in pristine condition in South Dennis," he says. "It has two front parlors and a keeping room (the living/ dining/cooking room and heart of the house) in the back, just like in Colonial days."

For the best deals, forget the bling. Mr. Bradley says that most buyers want houses in move-in condition, with granite counter tops, flashy appliances and spa baths, but new construction and updated older homes cost $1 million or more and often are far from the ocean. You can often get good value, and better location, he says, with a $500,000 to $750,000 house "that's a little tired."

Know the market. Paul Swanson , a structural engineer from Franklin , Mass. , says, "My wife and I looked at 15 houses in our price range that we could use for vacations now and a retirement home later. We found just the right one, a solidly built three-bedroom in Barnstable Village with over an acre of land." Because they knew what other houses were available, they felt comfortable about negotiating, Mr. Swanson says, and the seller took 4.5% off his price.

Be bold. Mr. Cleary , who after renting for 17 summers recently bought a home, says: "If you have one or two million dollars, you could literally go into five great homes and bid aggressively. It's quite possible you would get a 'yes' from one of the sellers."

Don't worry that the house you buy today will be worth less tomorrow. Demand is usually high on Cape Cod , says Sotheby's Mr. Cotton , and supply is tight. The Cape has little vacant land and tight zoning laws restrict future development. "Thirty-three million people live within a gas tank's drive of the Cape ," he says, "and many of them are Baby Boomers, who will soon be looking for a place to retire."

"If you go for it now," he adds, "you'll be patting yourself on the back in five years."