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Regional Spotlight: Cape Cod, Mass., Housing Market Sees Another Price Dip in April
Posted By beth On May 3, 2007 @ 12:53 PM In Finance and Economy,Finance, Economy & Government Issues | Comments Disabled
RISMEDIA, May 4, 2007-(MCT)-Real estate prices on Cape Cod dropped again in April, but a growing number of sales could indicate that the worst is over for the Cape Cod housing market, said Barnstable County Register of Deeds John Meade this week.
"The fact that the market's more active is a good thing and outweighs the slight decrease in value," Meade said.
The registry recorded 540 property sales in April, a 3.7% increase over the same month last year, according to numbers released earlier this week.
The Barnstable County Registry of Deeds tracks commercial, residential and other property sales valued at more than $50,000.
The real estate sales volume for the first four months of the year is down just 0.4 percent when compared with the same period in 2006, sliding from 1,887 transactions to 1,879.
The median sales price in April was $340,000, meaning that half of the recorded transactions were valued below this price and half were valued above it.
This figure is 8% lower than at this time last year, marking the sixth consecutive month of declining prices.
"Prices are coming down a little bit and as a result we're seeing more activity," Meade said. "It's Economics 101."
Two factors are likely driving the decreasing sales prices, said Meade.
The past year has seen slowing sales volume, which has caused sellers to lower prices in order to attract buyers.
In addition, said Meade, the current growth in the number of transactions is being driven largely by sales of lower-priced homes.
Often, he explained, owners selling properties in the lower price range are less able to carry two mortgages if they have to move into a new home before selling their old one.
While the sales numbers showed signs of a turnaround, April's foreclosure figures were less positive.
Registry of Deeds record showed 14 completed foreclosures last month, a sevenfold increase over April 2006. This number brings the year's total to 51.
The last time the Cape saw such high numbers of foreclosures was 1998, when the first four months of the year brought 56 foreclosures.
The recent spike, said Meade, is partially because of the high number of people who used subprime loans to buy homes during the height of the recent real estate boom.
Subprime loans target buyers with low income or poor credit, who would otherwise be unable to qualify for a mortgage.
Some variations involve low initial payments, which increase sharply after a few years. When the monthly bill jumps, borrowers may find themselves unable to pay.
"The majority of them have figured out a way to make (the loans) work for them, but a small percentage haven't," he said. "In any market, you're going to have a failure rate if the market stalls out."
Though the foreclosure numbers may seem alarming, Meade said, he is still optimistic about the bigger picture.
"If the volume is starting to pick up, that may be a sign that we have bottomed out for a while," he said. "It's a sign that there's life in this market that we're hanging on."
Copyright © 2007, Cape Cod Times, Hyannis, Mass.
Distributed by McClatchy-Tribune Information Services.
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