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THE PARTNER'S MARKET REPORT
FIRST HALF 2008 - CAPE COD $1M+ HOME SALES
The luxury market for the first half of 2008 across Cape Cod is only slightly off by 13% from 2007 despite reports fromthe media which suggest a dire economic outlook for real estate.
There is a more significant 20% reduction in homes sold in the $1,000,000 to $1,999,999 price range, while the $2,000,000 and up price range is either at the same level as 2007, or stronger. Year to date the $2,000,000 to $3,000,000 range has been particularly active.
Pending home sales (at 35 sales pending as of 6/6/08) are trending slightly downward from the first half of 2008 rate of 20 sales per month. In the luxury market, the normal time between an offer to purchase and a closing is 60 days. In 2007, 290 homes sold over $1,000,000, which would put monthly sales at 24.
A concern is the amount of inventory currently available. The national benchmark for a balanced luxury market is approximately 12 months of homes listed at any time. With an average inventory of 31 months, prices may be further depressed.
What continues to be clear is that the affluent buyer still has the desire and ability to purchase A+ waterfront and village properties as long as they see their purchase as a desirable long term investment as well as a lifestyle choice.
Despite an overall decline in the marketplace over the last 3 years across the Northeast, the luxury market has maintained vibrant activity and has grown over 10% in the upper luxury tier in the waterfront market. The affluent buyer understands that there are only a few opportunities to purchase the exclusive, private, “best of the best” properties they desire, and because the value of such properties remains and will continue to remain intact, the 2008 market and beyond will continue to prosper.
2008 first quarter results show that luxury sales are on track to potentially reach 2006 and 2007 levels. Market conditions at the beginning of the second quarter are impacted by the overall dynamics of the economy, and yet we continue to see that A+ waterfront and village properties remain sought after both as a desirable long term investment and a lifestyle choice.
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