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June 6, 2014 5:17 pm
The anvil-shaped peninsula of Cape Cod is synonymous with many things. One is as a haven for the east coast elite to rest and play; another, better known, is its history as a favoured retreat for the Kennedy family.
Today it also serves a more prosaic purpose: as a litmus test of the US housing market recovery. Will the upturn, so far strongest in mid-market and low-end properties, extend to the expensive second-home sector which dominates this tip of Massachusetts?
The Cape forms 340 sq miles of strikingly beautiful land running along unspoilt beaches and divided into four regions. Upper Cape has substantial numbers of permanent residents as well as second-home owners; Mid Cape, regarded by some as the least attractive part; Lower Cape, which includes several towns with a high proportion of second homes; and Outer Cape, which is the northernmost stretch of the peninsula.
At this time of year much of the Cape is in limbo, awaiting the start of the summer season in mid-June. Then its seaside communities – heavily dominated by holiday homes – will see a three-month frenzy of activity before returning to quiet anonymity in the autumn.
This is an area of clapboard houses, woods and beachfronts, towns with boardwalks, and roads that are near-empty in winter but gridlocked (or sand-covered) in summer. Yet while the Cape is uniformly attractive along the 40-mile stretch of its so-called National Seashore, demographics and seasonality make its individual settlements highly diverse.
In the north is Provincetown, or P-town, an affluent community of 3,000 permanent residents, which expands to 60,000 when owners of its small timber holiday homes arrive between June and September.
Chatham, a one-hour drive south, has manicured streets, traditional inns and gift stores. Its 7,000 population triples during summer and homes here tend to be larger, detached, and with neat gardens. Sotheby’s International Realty says the town has seen more $1m-plus sales than any other in the Cape – 69 last year compared with 20 in P-town.
“Chatham and [nearby] Osterville have the highest appeal to high-end buyers because of their downtown village feel. Most of Chatham is on the water and it’s a real draw,” says Chris Rhinesmith of Pine Acres Realty, a Christie’s International affiliate. He says most buyers come from New York (some five hours drive south) or Boston (90 minutes north).
Rhinesmith is selling a six-bedroom $25m Atlantic oceanfront house in Chatham with almost 11,000 sq ft of living space, including a “wine cave”, an 11-seat cinema and a circular guest house annexe plus 1.7 acres of land.
At Harwich, about 15 minutes’ drive away, Sotheby’s is selling a fully-furnished, six-bedroom house called Wychmere Breezes for $10.95m. The property has 9,400 sq ft of interior space on 3.6 acres of waterfront land, and has a private 80ft dock.
These are unusually large and high-priced properties for this part of the Cape, where few other houses exceed $2m. For a wider choice of large homes with substantial grounds, buyers tend to look to the Cape islands.
The best known and largest of these are Nantucket and Martha’s Vineyard. These are short ferry rides from the main Cape and are regarded as jewels in the local crown for their natural beauty and good fortune of being surrounded by warm waters thanks to the Gulf Stream.
The population here also swells significantly in summer although in recent years both islands have sought to attract more year-round residents.
According to Savills, which analysed data from US property portal Zillow, 38 per cent of properties on Nantucket and 7 per cent of those in Edgartown, the largest town on Martha’s Vineyard, are owned by people owning assets of $30m or more. Some work in media or real estate, but Savills says the single largest sector is financial services. “Being islands, they’re finite for space and protected from overdevelopment, traffic and crime. Prices came back last summer to close to within 10 per cent of 2007 values,” says Thomas Le Clair of Land Vest, a Martha’s Vineyard agency that is an associate of Knight Frank. Le Clair is selling a 10-year-old, 10,000 sq ft mansion with 2.7 acres of waterfront garden and a private pier for $19.5m.
“The market went down 25 per cent across the board – that’s luxury and entry-level. We’re entering our sixth summer since 2008 and we’re still some way off the highs, but we remain hopeful we might get back to 2008 levels by the end of 2014,” says Bill Liddle, owner of Nantucket’s Great Point Properties, another affiliate of Christie’s International.
In addition to the elite islands and twee holiday home communities, the Cape inevitably has many more modest, less popular ports and towns. Local people, and their house prices, reflect the less fashionable reality of local economies reliant on fishing or serving the tourist industry elsewhere in the Cape, or commuting daily to and from Boston.
Such towns include Mashpee, which is part governed by the indigenous Wampanoag tribe of native Americans, and Brewster, where the local tourist authority highlights the central location of its general store as a notable advantage.
This mix of the affluent and the ordinary is what make Cape Cod surprising – and appealing. The wealthy and the powerful can relax without tourist buses passing their homes, without having to dress formally for dinner and without disturbance from the paparazzi.
However, buyers should act quickly if they want to join them at the best prices. If Cape Cod lives up to realtors’ expectations this summer, it will prove that the US housing recovery has at last reached the high-end.
● Roads are slow and driving to and from New York in the summer can take seven hours
● Many homes in the area have septic tank sewage systems
● Average high temperatures in January are 3C, and 28C in July
● There were 20 reported crimes per sq mile in Barnstable, the Cape’s largest county, in 2013 (the average in Massachusetts is 33)
What you can buy for . . .
$1m A small terraced house in Provincetown
$5m A waterfront house with a small garden in Chatham
$15m A six-bedroom house on a three-acre plot in Nantucket
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