The Cape Cod real estate market is its own microcosm, distinct even from its neighbors on the other side of the Cape Cod Canal. Like any market, it is impacted by interest rates and national economic conditions but It is also specifically influenced by seasonal demand, unique environmental and climate-related factors, and its ‘island’ culture. As we move into 2025, it's crucial for both buyers and sellers to understand the whole picture and make informed decisions. This report provides an overview of the Cape Cod real estate market, drawing insights from available data including information from the Cape Cod & Islands Multiple Listing Service (CC&IMLS), and offers advice for navigating the market in the coming year.
Market Overview:
While precise predictions are impossible, several trends are shaping the Cape Cod real estate landscape in 2025:
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Continued Demand: Cape Cod remains a desirable location for second homes and vacation rentals. Its natural beauty, charming towns, and relative proximity to Boston and Providence continue to attract buyers. At the same time, after decades of over-indexing on tourism we’ve created a crisis in housing for year-round residents, including those who work in the tourism industry. So, where demand may be leveling off in other parts of the state, it is still very high on Cape Cod.
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Inventory Levels: Insufficient inventory levels have been a key factor for at least a decade, and even more so since the pandemic. While there are signs of increasing inventory which is creating a more balanced market, specific areas and price points may still experience limited availability. Monitoring new listings on the CC&IMLS will be essential.
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Affordability: With the 30-year fixed mortgage rate now at 6.93%, its highest since July 2024, and the median selling price at over $700,000 for a single family home, affordability continues to be a challenge for most people who want to buy a home on Cape Cod. It’s great for most sellers, but makes it almost impossible for a seller on Cape Cod to downsize and stay on Cape Cod, as gains in their property value are neutralized by the increased costs of buying a home.
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Economic Factors: National and regional economic conditions can influence buyer confidence and investment decisions. While interest rates just went up, some economists predict rates as low as 6.2% before the end of 2025. Time will tell. In Massachusetts, the Affordable Homes Act which goes into effect on February 2, 2025 has multiple provisions in it like Accessory Dwelling Units by Right and Seasonal Communities Designation which could have a positive impact on affordability and access in the region. Keeping an eye on macro economic indicators and the specifics of individual municipalities will provide a broader context for the Cape Cod real estate market.
Advice for Sellers:
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Strategic Pricing: In a market with increasing inventory and longer days on market, accurate pricing is crucial. As long as demand stays high (it will) there is more to be lost by overpricing a house than by underpricing it. Analyze recent comparable sales data from the CC&IMLS with your agent to determine a competitive listing price.
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Property Presentation: Ensure your property is in top condition. Staging, decluttering, and addressing any necessary repairs before you go on the market can help your property win as the market gets more competitive.
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Marketing and Exposure: Work with an agent who has a strong and diversified marketing plan, including professional photography, virtual tours, digital, and social media presence to maximize exposure of your property to the right audiences. `
Advice for Buyers:
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Be Prepared: Obtain pre-approval for a mortgage to demonstrate your financial readiness to sellers. Track the market, visit open houses and watch what they sell for, how long it takes, etc. Pro tip: To avoid bidding wars, look for houses that have been on the market for a couple of weeks.
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Act Decisively: In competitive situations, be prepared to make timely offers. However, don't waive important contingencies without careful consideration. The more prepared you are, the more confidence you will have.
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Work with a Local Expert: Partner with a knowledgeable Cape Cod real estate agent who understands the nuances of the local market and has access to the latest listings specifically on the CC&IMLS.
Data and Resources:
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Cape Cod & Islands Multiple Listing Service (CC&IMLS): This is a primary source for real estate data in the region, providing information on active listings, recent sales, and market trends.
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Cape Cod Commission: This regional planning agency provides data and reports on housing, demographics, and economic conditions on Cape Cod.
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Massachusetts Affordable Homes Act: With billions of dollars and a long list of regulatory changes, this bill is meant to make an impact on the Massachusetts housing market and provide relief specifically to communities like Cape Cod with heavy seasonal fluctuations in population.
Conclusion:
The Cape Cod real estate market in 2025 presents both opportunities and challenges for buyers and sellers. By staying informed about market trends, working with experienced professionals, and utilizing reliable data sources, you can navigate the market successfully and achieve your real estate goals.
Disclaimer: This report is intended for informational purposes only and should not be considered financial or legal advice. Consult with qualified professionals for personalized guidance. Market conditions are subject to change.
Contact:
Katie Clancy, Chief House Hawker for the Cape House Team at William Raveis Real Estate
508.737.1248
@thekatieclancy
@thecapehouse
