The Housing Shortage Crisis
We’ve all seen the headlines. The Cape is changing. Lack of housing is crippling our communities as businesses are forced to reduce hours or shutter altogether because their staff can’t afford to live here and people who were born here are having to move away. There simply aren’t enough homes for year-rounders on Cape Cod, especially smaller homes that are more affordable.
Housing Assistance’s 2018 report, Housing on Cape Cod: The High Cost of Doing Nothing, compiled research about the growing housing shortage on Cape Cod. Year-round homes that our workforce could afford were being turned into expensive second-homes and short-term vacation rentals. At the time, best estimates were that our region needed 4,500 more year-round rentals than we had available. There was less than 1% rental vacancy when 7% is considered healthy. And wait lists for apartment openings were several years long.
In the past 18 months, the pandemic has exacerbated our housing problem. As people left the cities and resumed remote work here, housing became even more scarce and prices skyrocketed even further out of reach of existing year-rounders. Home sale prices increased 23% in one year, and the number of homes for sale decreased by 40%.
Housing Conditions in Barnstable County
Since the mid-2000s the Cape’s housing markets have been impacted by large, uncontrollable macro-economic forces, including:
- Rise of a strong Boston metropolitan economy
- Housing market crash of 2009
- Retiring baby-boomers being attracted to Cape Cod’s beauty
- Cape’s seasonal economy and its role as a vacation destination for generations
These macro-economic forces, combined with natural resource constraints and local government policies that limit housing diversity and density, have created a highly constrained housing market. Unfortunately, the situation has deteriorated at a more accelerated rate than was seen in the previous 10 years, driven by COVID-19 impacts like the expansion of remote workers. Also, the proliferation of short-term rentals reduced affordable year-round rentals and attracted more investment purchases of properties throughout Barnstable County.
In two years, the median sale price of a single-family home on Cape Cod rose 40.5%, from $432,500 pre-pandemic to $607,750 through October of 2021. Condominiums also saw a jump of 25.3% to a median sale price of $365,000.
Cape Cod Home Sale Trends 2019-2021
According to the Cape Cod & Islands Association of Realtors, another concerning trend was noted in May 2021, when 63% of properties closed above list price in May – fueling the 104.5% of list price received for closings, reflecting the market’s strong demand. This trend is significant, when compared to the 11% of transactions that closed above their asking price in March 2020, and 9.5% in March of 2019.
Along with the rapidly escalating price of homes, the number of homes for sale has decreased dramatically. At the end of May, there were 448 single-family homes for sale and 144 condominiums for sale in the Cape Cod & Islands Multiple Listing Service. Last May, there were 1,537 single-family homes and 457 condos listed for sale, a 70.9% decrease, and a 68.5% decrease, respectively. Additionally, cumulative days on the market for May 2021 decreased 62% for single-family homes compared to last May, dropping from 100 days to 38 days. Condominiums had a 57.3% decrease in cumulative days on market compared to the previous May, dropping from 110 days to 47 days.
Prior to the pandemic, the projection over the next 7 years was for Barnstable County’s population to increase by 3.3%; households by 3.4%; employment by 5.5%; and housing stock by 4%. The Regional Housing Market Analysis for Barnstable County identified the hourly wage for a single owner of a median-priced home on the Cape as $38.37 or a few dollars less than $80,000 a year. The median wages for the seven most common employment sectors all fall well below this amount.
ADUs can fill in the ‘missing middle’ of housing options in our region. We need housing options between large, low-income housing projects and large, single-family luxury homes.
Cape Cod’s housing market is not just serving local residents.
A majority of the 4% growth in the total housing stock will serve seasonal homebuyers. Seasonal unit demand will grow by 6% or twice as fast as year-round units. It is the presence of the strong seasonal demand that makes housing unobtainable to many residents. Seasonal population in the county, when averaged over a full calendar year, is equivalent to 68,856 full-time residents and this number will steadily increase.
So where can we build the new homes we need?
New census data shows that Barnstable County’s population grew 6.1% between 2010 and 2020. Nearly 87% of the land on Cape Cod is either already developed or under protection. And 82% of our existing housing is single-family homes.
Check out our ADU Page!