Build New or Buy Turn Key?

To build or not to build and buy turn key. That seems to be the question these days. Second home buyers looking for that deal in today’s environment are increasingly inquiring about land to design and build their dream vacation home.

Although the idea seems romantic, you may want to think about the costs involved…not just the financial cost but the stress that may accompany new construction. Take into consideration the following when it comes to new construction:

1. Once you identify a lot of land ask your realtor about setbacks, basically how close to the boundary are you allowed to build and….. facilities…this being electricity, potable water supply and title v capability.
   
2. Hire an attorney who is versed in new construction. They will guide you through homeowners association covenants, growth management by-laws and other issues that will arise.
   
3. Hire a good architect to design the house. Make sure they can work well with town officials for your application with the planning and zoning boards and building department.
   
4. Plan on spending an estimated $200 to $250 per square foot on construction depending on your finishes. This may even be higher in certain areas. Count on delays.
   
5. And finally, it may be more challenging to acquire financing for the purchase of land.

Progress Update: Herring Cove Village

Things are moving along at a swift pace at the West End’s new premier development! Floors, cabinets, tiling and other finishes are under way in the first two units. There are 1, 2 and 3 bedroom units being offered.

The windows in the first unit are all trimmed out, and the attractive chair rail in the bedrooms provides a lovely finish detail. The paint colors are soothing and dynamic, all at once! Light maple flooring is being installed and the custom cabinets are hanging in Unit 1. The beautiful glass tiles are being laid in all the bathrooms and the railings are in on the mahogany decks.

Property Details: click here.

For more information, email (Emily@atlanticbaysir.com) or check out the Herring Cove Village Web site.

Check out the latest photos on our Web Site's Written Blog (entry is dated August 21, 2008).

Stimulating the Market

This week we’ll briefly outline the new federal housing legislation to help stimulate the failed housing market and take a peek at the state’s law to address the foreclosure issue.

The Federal program, which became active in late July, provides the following: 

Tax relief to first time homebuyers in the amount of a $7,500 tax credit. This will be issued providing it is used by July 1 of next year. The credit must be paid back, interest free, at a rate of $500 per year over 15 years.

Homeowners who claim the standard tax deduction can receive a tax relief of $500 for single and $1,000 if married. 

Bonds will be made more attractive to investors potentially lowering the cost to develop affordable housing.

For some owners here on the cape…the capital gains you claim when selling your second or vacation home may be impacted if you used it as a primary residence for a certain period of time leading up to the sale.

Lendors will need to provide revised disclosure statements early in the process and provide mortgage documents no later than seven days prior to closing.

Freddie Mac and Fannie Mae will increase their lending amounts to markets with higher property values.

Homeowners facing foreclosure will now be able to take advantage of federally backed mortgages to get out of aggressive mortgage products.

Senior Citizens will benefit by an increase in the monthly payouts for reverse mortgages.

Veterans are protected from the foreclosure process until nine months after they return from active service

Communities hit by the demise of foreclosed properties will share a redevelopment fund to restore vacant homes.

We’ll see how the federal program works out. It is a massive step in the right direction to help correct the soft real estate market and rescue suffering homeowners trying to save their properties.

The state law which delays property foreclosures seems to be working. The law which became active May 1st, is designed to give homeowners a 90 day grace period before being foreclosed upon.

There were 2308 new foreclosures in June of 2007. This June there were only 350 according to The Warren Group, a Boston based real estate data publishing company. The law may be working. However, the overall number of foreclosures are due to double this year compared to 2007.

Completed foreclosures have dropped 19.5% from May to June. More time is needed in order to determine the results of this law.

Market Trends

Every day, we are asked by Buyers how the market is performing and when would be the best time to buy. We wish we had a crystal ball to answer the latter part of that question. The best we can do is to report on market activity and to update you on any trends that we discover, leaving you to make your own decision about when to jump back into the market. 

It is interesting to note that many buyers who have been in a holding pattern for the past two years have chosen this summer to make their move. Year to date sales volume is up in Provincetown and Truro compared with the same period in 2007. (Unlike those two towns, Wellfleet volume is lagging last year’s performance) Even though volume is up, we continue to see multiple price reductions each week, in all markets. Some feel that the increase in the number of buyers will lead to a slowing of pricing adjustments.

A recent property in Provincetown was introduced to the market at a price that was 5-10% below market value. Four offers were submitted and the property will likely sell for well over asking price. What does this tell us? Properties that are priced competitively are selling. It also illustrates that the buyers in today’s market are savvy and they are waiting for and recognize a good value when one presents itself.

Following find Sales Volume YTD compared with the same period in 2007.

Provincetown
2008 YTD Sales Volume $55,672,301
2007 1/1/07-8/6/07 $50,724,000

Truro
2008 YTD Sales Volume $26,588,500
2007 1/1/07-8/6/07 $21,080,433

Wellfleet
2008 YTD Sales Volume $13,687,190
2007 1/1/07-8/6/07 $29,180,925