Officials: 'Frenzied' Real Estate Market Leaves Locals With Little Options

By: Tim Wood

Topics: Housing and homelessness

A “frenzied” real estate market is driving up home costs and driving out local mid and low income residents. FILE PHOTO 

For the year so far, the median sale price of a single-family home in Chatham is $1,283,750, a nearly 75 percent jump from last year, when the median price was $735,500.

In Orleans and Harwich, the figures are not as eye-popping, yet they still tell the story of a real estate market that's on fire. The median sale price of a house in Orleans for the year year is $977,000, a nearly 29 percent increase; in Harwich, the $532,500 median sale price represents a nearly 25 percent hike.

The lack of affordable and attainable housing in the region is not a new problem, but ever-increasing prices like those cited above has made matters far worse, say officials.

“It was a steep challenge before the pandemic,” said State Senator Julian Cyr, D-Truro. “Now that it's lifted, a near-existential crisis faces the Cape and Islands.”

During a panel discussion last Thursday, regional housing officials said the pandemic's impact on housing is far-reaching and there were few immediate solutions to address it due to zoning roadblocks and “persistent NIMBYism,” Cyr said.

“I can't stress how dire of a circumstance this is,” he said.

According to the Cape Cod and Islands Association of Realtors, the median sales price of a single-family home in Barnstable County in May was $630,000, up from $454,500 last May. This May 438 houses and condominiums sold, compared to 301 the same time last year. Sixty-three percent of properties closed above the listing price. In May, the organization said, the days properties are on the market dropped 62 percent over last year, from 100 to 38 days.

The association called this spring's market “frenzied,” and CEO Ryan Castle said in a press release that the sort of increases being seen are not sustainable over a long period.

Preliminary data from the Barnstable County Registry of Deeds shows that registry volume was up 74 percent in May over May 2020, with the total volume of sales up 146 percent over the previous year, Cyr said.

He remembers reading about the Cape's housing crisis in 1999 when he was in middle school. “This crisis has only gotten worse, and frankly our community has done very little to stem this crisis,” he said. The state's Chapter 40B sets a goal of 10 percent of affordable housing in a community, defined as 80 percent or less of the area median income. On Cape Cod, only Provincetown and Orleans are “remotely close,” he said. “No one else is anywhere close.”

Little available land to develop a meaningful number of units contributes to the problem, and the current real estate market, which is creating bidding wars among wealthy buyers on even the most modestly priced homes, means that middle and low income residents “simply can't compete in the market,” Cyr said. This is impacting employers across the board, from well-paid professionals to service workers.

“It's really incumbent upon local officials regionwide to recognize our own agency in solving this problem,” Cyr said. If not, “we will not have sustainable year-round communities. It will not be a place where people from all walks of life are able to make their lives.”

Hadley Luddy of the Homeless Prevention Council of Cape Cod said the agency had a 31 percent increase in cases last year involving all demographics. “Countless people called in and said they never thought they'd be in a position to ask for help,” she said. Those who were marginalized before the crisis were most impacted, but the increase stretched across all demographics.

“There's really no time to waste as we see more and more people leave the region,” she said. “We need a solution now to address the displacement happening on a daily basis.” She called on residents, including those who recently purchased homes, to become better informed and the take action together. Things that could help include making childcare more affordable, exploring the use of seasonal hotels as winter rentals, and a home sharing program now being piloted by the county.

The housing crisis is having a widespread impact on the region, said Cape Cod Chamber of Commerce Director Wendy Northcross, and the issue as the chamber's top priority.

“We're hearing every single day that a lack of housing is crushing our small businesses,” she said. She called for revenue from the short-term rental tax to be directed toward housing and for communities to enact zoning changes, including Smart Growth policies and accessory dwelling units, to help develop more affordable housing.

“We have to figure this out or we will continue to be a bedroom community where people fly in and fly out,” she said.

Cyr noted that the two-thirds majority required to change zoning under state law is a high threshold that often isn't met. Attempts to change that to a majority vote have yet to gain a foothold. Litigation by neighbors often means that even small projects get delayed for years. Those appeals are often cloaked in environmental concerns that mask other motives, he said.

“But really their NIMBYism has really racist and classist roots,” he said.

The problem is even more acute on Martha's Vineyard and Nantucket, where the median sale price of a home is $1.5 million and $2.1 million, respectively. Nantucket had only eight homes listed for $1 million or less last week, said Tucker Holland, Nantucket's housing specialist. Both towns are proposing real estate transfer fees, as is Chatham, which endorsed sending the legislation to Boston at last week's annual town meeting. Nantucket has sent its home rule petition to the legislature three times already, and officials hope that with other towns making the same request there could be more support in the General Court, Holland said.

“We can't solve this problem on our own,” he said. “We need the assistance of the legislature, we need the tools of this transfer fee to do so.”

While the state has a role to play, municipalities also have to have “skin in the game,” Cyr said. “We're going to have to do the work.”