Patience: It’s no longer just a virtue but now a key component in finding a house in some of New England’s top vacation destinations.
Just as more Bostonians fled the city for the suburbs, many went even farther to markets like Cape Cod, Martha’s Vineyard, the Berkshires, and points north in New Hampshire and Vermont. But there’s only so much housing supply in these areas, and local governments aren’t in any rush to greenlight a wave of new developments for aspiring second-home owners.
There’s nothing leisurely about winning out in a price war for a coveted vacation home, the real estate agents interviewed said.
“If you’re a buyer that wants to get into the market, you need to have nerves of steel and unlimited financing,’’ said Bill Farmer, a broker with Beachfront Realty in Provincetown. “It is staggering what some people are paying.’’
He’s only partially joking. The recent sale of an 819-square-foot condo in the town’s West End went for $810,000 — $211,000 over the asking price. That may be an extreme example, but above-asking offers are quickly becoming the Provincetown norm.
A 2,000-square-foot single-family home closer to Route 6 hit the market for $899,000, and Farmer advised his clients to bid over asking — only to learn that their $955,000 offer was the ninth highest out of 13.
The single-family market is both extremely sparse and highly coveted on the Outer Cape. As of press time, there were only 12 such homes for sale in Provincetown, five in Wellfleet, and four in Truro.
“Every broker in town has a pocketful of probably six to 10 people just waiting for a single-family home to come on the market,’’ Farmer said. “Some people will wait three or four years.’’
This story of unprecedented demand and limited supply is playing out in markets like Martha’s Vineyard and Vermont’s Mad River Valley just as much as it is on the Outer Cape. People who may have rented homes for weeks at a time in the past have decided to dive into homeownership, thanks to low interest rates and their ability to save money during the COVID-19 lockdown.
“Second homes, which are usually always available on the Cape and Islands, aren’t being sold because those owners are the exact people that are staying there for the fall to work remotely,’’ said Joshua D. Wild, managing partner at Elevated Realty. “Without that usual inventory hitting the market, it’s really down to your primary homeowner who needs to sell, and they have nowhere else to go because of how expensive and limited the inventory is. It’s creating this major imbalance.’’
Sales volume for single- and multi-family homes from the first quarter of 2020 to the first quarter of this year on Martha’s Vineyard jumped 64 percent, according to a report from realty firm Douglas Elliman Real Estate using LINK real estate data. Barnstable County, which spans all of Cape Cod, saw an 83 percent increase in sales volume of single-family homes from April 2020to April 2021, according to the data.
Prospective buyers also don’t have much time to think about splurging on a second home. The typical number of days a Martha’s Vineyard property spent on the market in the first quarter was 44 — a 71 percent decline from last year, according to the Douglas Elliman report.
“It’s so competitive that you shouldn’t expect a counteroffer in this market,’’ said Allison Cameron Parry, a Vineyard-based real estate agent with Douglas Elliman. “If you know your outer price limit and you really want that property, I recommend you get ready to go to your outer limit right away.’’
The same tactics bidders are employing to win in Boston’s hot suburban housing markets hold true in New England’s vacation markets: Waiving financial contingencies, making cash offers, and adding escalation clauses are all on the table.
All of the real estate agents interviewed for this story recommended working with a licensed agent to stay on top of the latest listings and get tips on properties about to hit the market.
Sometimes even that isn’t enough.
“There’s hardly anything on the market at all right now. I’ve got buyers and nothing to sell them,’’ said Jane Austin, a real estate broker with Keller Williams Vermont in the Mad River Valley. “When we do get something to sell, a lot of the times it doesn’t even hit the market.’’
The total of 335 active listings in Austin’s target market reflects a 30 percent decline from a year ago, but sales volume is up 25 percent. Spending between $300,000 and $500,000 used to be typical for buyers to find a great country home, Austin said. That’s increasingly hard to do now in a market where the average sale price jumped 22 percent in just a year.
Now homes get multiple offers going over the asking price, and buyers even purchase properties without stepping foot in them; they’ll just have the agent take them on a virtual tour.
“The pandemic changed everything up here,’’ Austin said. “We had some lovely homes that weren’t moving.’’ She said the shift began at the end of May 2020: “And then June — forget it. It just started to take off.’’
Across the border in New Hampshire, Andrew Smith, the Franconia-based broker and owner of Peabody & Smith Realty, has seen similar demand trends. He said, however, that the no-supply scenario other real estate agents are seeing doesn’t hold true in the state’s Lakes Region and to the north.
Prices soared, but there was also a 20 percent increase in the number of units sold through the end of April this year compared with the same timeframe in 2020, he said.
“People are putting houses on the market. They’re just selling faster than they ever used to. It’s the velocity and the volume that make it look like there’s nothing to buy,’’ Smith said. “If I have a listing now on for two weeks, I have to wonder what’s the matter with it.’’
It’s a similar scenario in Berkshire County in Western Massachusetts. The 104 single-family home sales in March were a nearly 27 percent increase from last year, but prices are also on the rise, according to an analysis from The Warren Group, a real estate analytics firm. The $244,000 median sales price in March this year was a nearly 13 percent jump from the same month in 2020.
Many aspiring buyers across New England are wondering whether they should make these properties a second primary home instead of just something they use on weekends or a few weeks out of the year. But it’s unlikely that demand is going to lead some vacation towns to start approving waves of new development.
“With so little buildable land left, supply is never going to really meet the demand to keep building,’’ said Jon Goode, another Provincetown-based broker at Beachfront Realty. “So we’re going to be in this crunch for the foreseeable future.’’
That puts even more pressure on owners of existing homes to sell. Recent buyers on Martha’s Vineyard who just bought homes last year can’t turn away such rapid returns on their investment and are putting them back on the market, Parry said. The average price per square foot has jumped 35 percent from last year, according to the LINK database for the island.
But other Provincetown owners don’t want to wade back into the highly competitive home-buying waters.
“The really strange thing is that most product tends to come on the market in the spring and fall, but we aren’t seeing that,’’ Farmer said. “No one wants to move because they figure, if they moved, they’ll never get back into the market.’’
Cameron Sperance can be reached at [email protected]. Subscribe to the Globe’s free real estate newsletter — our weekly digest on buying, selling, and design — at pages.email.bostonglobe.com/AddressSignUp. Follow us on Facebook, LinkedIn, Instagram, and Twitter @globehomes.