The Cape Cod chip gets a huge cash injection

On a recent Sunday at West Dennis Beach on the Nantucket Sound in Dennis, Massachusetts, something unusual happened: The parking lot filled up at 8 a.m.

Eight miles north, on the shore across from Cape Cod, popular spots like the Mayflower and Corporation beaches have always been filled with affluent summer expats from Boston and New York. But at West Dennis Beach — a paradise for families and full-time locals, known for its up-and-coming atmosphere — anyone can score a parking spot any time of day.

West Dennis Beach and Mid-Cape – stretching from middle-class towns including Barnstable, Yarmouth and Dennis – are suddenly hot.

It’s a story unfolding across the United States: As the pandemic has sent prices up in luxury vacation destinations like the Hamptons, Nantucket, Palm Beach and Cape Cod, even relatively wealthy people have had to consider their options. The result was a real estate boom in affordable, even low-cost areas.

Caped Crusader: A segment of the middle-class in Massachusetts, including Mayflower Beach, is getting a large influx of cash.
Getty Images

Drive along Route 28 through Mid-Cape today and you’ll see candy stores, mini golf, and family restaurants – not towering bushes or country clubs. However, you will need deep pockets to stay there.

The median sale price for a single-family home in the middle of Cape Town in the first quarter of 2022 was $650,000 (a jump from the $590,000 that already inflated in the same quarter last year), according to the Cape Cod and Islands Association. More than half of all sales were made above asking price and a third of all sales were made in cash. Additionally, there were nearly half as many single-family homes listed for less than $500,000 compared to the first quarter of last year. Stocks are at historic lows.

Mid-Cape offers charming Cape Cod beach homes, which are now charging higher prices, too.
Getty Images / istockphoto

For your average Joe, this is a huge request for a second home.

But for those who have run out of Cape Cod cities like Wellfleet and Chatham, or even more upscale markets like Nantucket and Martha’s Vineyard, Mid-Cape is a valuable market.

“Five years ago, there were about 2,700 single-family homes for sale on Cape Cod at any given time, and when I started there were about 7,200 single-family homes for sale,” said Mike Karas, a permanent resident of central Cape Town. Real estate agent with William Raveis in Yarmouthport. “We used to take people on buyer marathons, see eight houses in the morning and eight in the afternoon, and maybe spend 15 minutes in each. Now you are lucky if you can show buyers three or four of them.”

Outside 9 Orchid Lane.
With demand high, inventory is low, which is why 9 Orchid Lane in West Yarmouth sold in 2020 for $450,000, a 51% increase over 2018.
Alan Pierce

Inventory is so low that some dealerships only sell the same homes for a year or two. He replaced the seller’s chairs at 9 Orchid Lane in West Yarmouth in November 2018 when the home sold for $299,000.

Two years later, like 2018 buyers when they went on sale in October 2020. The sale price rose 51% in two years, closing at $450,000.

In another case, he represented the 11th Chase Street seller’s chair in Dennis Harbor, which was sold in October 2020 for $595,000. In 2021, the same property—this time with a different agent—sold for $825,000, a 39% increase.

Compass agent and fellow local Mid-Cap agent Cassie Fruggiero-Lyons watched one of her ads in Dennis receive eight offers. It eventually sold for $200,000 on top of a $1.51 million order—before the home hit the market.

Exterior view of 11 Chase Street, Port Dennis, Massachusetts.
11 Chase Street in Dennis Harbor sold for $825,000 in 2021.
Alan Pierce

“It was all done by word of mouth, and only by the networks of the Inner Compass and the Union of the Neighbors,” said Frugiero Lyons. “This market is crazy. Often things happen in one day and everything is sold out with multiple offers.”

It’s the same in the area rental market.

“You almost need to plan your rent for next summer by the end of this summer. Investors also come because you can rent something at the best rate and it will be booked all summer.

Compass agent Cassie Frogero Leon

“In February, most of the rental market was booked,” Frugero-Leon said. “You almost need to plan your rent for next summer by the end of this summer. Investors also come because you can rent something at the best rate and it will be booked all summer.

Inside 11 Chase Street.
… and for $595,000 in 2020.
Alan Pierce

For locals, the prosperity of the Central Cape is welcome.

Karen Mumford, who works at Pretty Picky Properties in Brewster, Massachusetts, noticed a funny thing happening to the average four-bedroom home across from her in South Yarmouth.

“The lady in front of me passed away, and her daughter inherited her house,” Mumford said. A few years ago, this home was sometimes rented for $1,500 a week. Instead of selling it, her daughter renovated the house, rented it all summer and made $5,500 a week for it.

Although the area is not known for its flashy amenities, the new influx of money has brought new benefits to the area.

Lark Hotels, which owns properties in Carmel-by-the-Sea, California, and Nantucket, opens the Bluebird Dennisport Inn in the central Cape on June 3. Last November, EOS Investors – a New York-based company that also owns L’Ermitage Beverly Hills – acquired Red Jacket Resorts for an undisclosed amount. The resort’s portfolio is heavily marketed to middle-class families, but now a $30 million renovation is planned after this summer season. EOS also acquired Wequassett Resort and Golf Club (in Harwich, in the Central Cape) for $102 million.

The exterior of Pelham House.
Silent investors pumped $20 million into the Pelham House Resort in Dennis Port.
Alex Gordias Photography, Inc.

“We love that Mid-Cape has been providing comfortable and affordable vacations for generations, and we love that it is easier to access than other parts of Cape Cod,” said Tom Burns, general manager of EOS.

During the pandemic, the Pelham House Resort in Dennis Harbor raised $20 million from a group of silent investors and used the money to turn into the Pelham Hospitality Group, which consists of a renovated flagship hotel, additional adjoining accommodation space and a rooftop restaurant that overlooks Nantucket. They have also acquired two small hotels – Pelham on Earle and Pelham on Main – to handle surplus when the main station sells out, as well as a nearby farm to supply produce to the station’s restaurant.

Today, the two-storey beachfront event center in Pelham is one of Cape Town’s most sought-after wedding venues.

“I don’t want to be a company. I want people to feel comfortable coming here,” said John McCarthy, managing partner and son of the founder of Pelham House. “It took me a while to get used to the changes, but the product is well worth it. You get such a high level of service that you probably didn’t get in the center of the Cape a few years ago.

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