Thursday, October 4, 2001

Cape housing prices stay strong

Published in the Current

In Cape Elizabeth, land values are often nearly double the national average. And despite national economic shakiness even before Sept. 11, the town’s real estate market is more than holding its own.

In 1990, the median price of a home in Maine was $87,400, according to the U.S. Census, and Cape Elizabeth’s median price was more than twice that, at $168,500.

Town-level details are not yet available from the U.S. Census Bureau for the year 2000, but local realtors say Cape Elizabeth’s average house-closing price is $309,713.

“I think the world stood still for a couple of days (after Sept. 11),” said Tom Tinsman of the ERA 1 Agency office in Cape Elizabeth, “but after that the normal amount of interest has come out.”

While there isn’t much for sale in town, that’s mainly because what there is moves quickly, said Kathy Duca of Harnden Beecher Coldwell Banker’s Cape Elizabeth office.

Buyers and sellers are from a broad mix of people, with locals moving around, people moving from out of state and more people working from home. Cape Elizabeth buyers do have one thing in common, Duca said. Most of them are involved in transactions above $300,000.

With interest rates low and local rental prices high, it is very much a seller’s market.

“There are definitely more buyers than sellers in the marketplace now,” Duca said.

Prices have climbed sharply in the past two years, she said, citing homes which sold in the $200,000-$400,000 range then and are now selling for between $400,000 and $600,000.

The average list price this year for houses in Cape Elizabeth is $306,391, Duca said. But the average closing price is $309,713—$3,322 higher, indicating buyers are meeting if not exceeding asking prices for property.

House showings are frequent, too, Duca said. A house she represented was priced under $200,000. It had 40 showings in one day, resulting in eight offers by evening.

Even so, the average time on the market for Cape houses is 40 days, Duca said. She said sometimes sellers ask for too much. Houses that sold in months rather than days, she said, tended to end up selling far below the original asking price.

But even expensive houses and land are moving quickly, like at Cross Hill.

The 97-lot development off Wells Road has been in progress for the past year and a half. Buyers can purchase land and have a house custom-built.

Half of the lots have sold so far, according to developer and real estate agent Stephen Parkhurst of Re/Max by the Bay in Portland.

Lots are available for between $79,000 and $200,000. The four showcased home designs on the development’s web site all cost over $500,000.

Several homes have been completed and are occupied, while construction on more than a dozen houses is in progress. Some of those homes are nearing completion while other lots are just being cleared.

“Some people are still in the design stage,” Parkhurst said.

Of the 97 lots in the development, five are classified as “affordable housing.” Those lots will have homes built on them before being sold. Parkhurst said the houses
have been designed. Now he and the builders are reviewing the building costs before breaking ground. He admitted that progress is slow, but said things are moving forward.

“We’re not in the infancy stage. We’re more toddlers,” Parkhurst said.

He said he does not know how much he will ask for the houses once they are built, partly because the costs aren’t final yet, and partly because he is not sure what the
county’s median income figures will be when the houses are put on the market.

A spokeswoman at the Maine State Housing Authority said affordable housing guidelines usually stipulate a house-pricing formula based on the median income level in the area.

Parkhurst attributes the demand for housing in Cape Elizabeth to the local character.

“The market is still very healthy,” he said. “It’s a small town.”

Tinsman, however, is worried about the affordability of housing in the community. He said small lots are important for reduction of sprawl. Many lots in town, he said, are mandated to be large.

According to town zoning documents, much of the land in town is subject to zoning requirements that they be no smaller than 1.8 acres.

The World War II-era Cape Cod houses on quarter-acre lots in Elizabeth Park, he said, are a rare breed in Cape Elizabeth.

“It’s the closest thing to affordable housing we have,” Tinsman said, pointing out that now even those are selling for $120,000 to $130,000.

Some houses are purchased only to be torn down, Tinsman said.

Many of these are larger houses, he said.

People who buy the smaller homes don’t typically rebuild because they can only afford to buy at the lower end of the price range, Tinsman said. But even then they
renovate and fix things up in the older houses they buy.

“We see a lot of improvements in homes when they change hands,” Tinsman said.