Business Trends newsletter March 13, 2008
Cape home sales up in February
While the nation continues to suffer dramatic drops in home sales, the Cape appears to be recording a different story. February sales were 12.6 percent greater than a year earlier. The median price of a home, however, was down 3.3 percent from February 2007 and mortgage activity was 1.2 percent less.
The price issue, however, deserves careful analysis. Several real estate companies report that higher priced homes have maintained their value. It’s homes at the lower range that are selling at a discount, partly because of foreclosures and because these homeowners often have to sell out of distress.
Over the first two months of the year, sales volume is down less than a percentage point, while the total value of sales is up nearly 26 percent.
Here is a running tally of home prices over the last 12 months:
Feb 2007: $338,750 -3.2%
Mar 2007: $349,000 +3%
Apr 2007: $340,000 -2.6%
May 2007: $325,000 -4.4%
June 2007: $338,000 +4%
July 2007: $345,500 +2.2%
Aug 2007: $355,000 +2.8%
Sep 2007: $387,500 +9.2%
Oct 2007: $345,000 -11%
Nov 2007: $330,000 +4.3%
Dec 2007: $329,000 -0.3%
Jan 2008: $323,000 -1.8%
Feb 2008: $327,450 +1.4%
Plymouth home sales up in February; but so are foreclosures
Home sales in Plymouth County rose by 5 percent between February and January. That represents the first increase in three months. Register of Deeds John R. Buckley also reports a 16 percent rise in refinance activity.
“In the sea of headlines predicting a further decline in the market, any increase in activity is encouraging,” Buckley said. “February is typically a very quiet month, with fewer recording days, and it is not uncommon to see a decline from January’s figures, so I am sure the data will be well received.”
Buckley’s remarks, however, are tempered by the large volume of foreclosures that continue to plague the market.
“Despite historic intervention in the market by the Federal Reserve and attempts by the federal and state government to prevent families from losing their homes, the state of our housing market continues to deteriorate at a rapid pace,” he said. Plymouth County recorded 94 foreclosure deeds last month, up from 84 in January. Of greater concern is the number of notices being recorded to initiate new foreclosure proceedings, which jumped from 170 during the month of January to 280 in February.
“This is a very significant component of the current state of the market,” observed Buckley. “While interest rates and sale prices may continue to become more attractive, consumers are not likely to regain sufficient confidence for the market to turn until there is some sign that this sense of crisis is behind us.”
Here are some numbers comparing February 2008 to February 2007:
• 2008: 912 home sales; 2007: 1030 home sales.
• 2008 average sales price: $356,732; 2007 average sales price: $376,942
• 2008 mortgage volume: 3,979; 2007 mortgage volume: 5,364
• 2008 foreclosure deeds: 178; 2007 foreclosure deeds: 82
• 2008 foreclosure notices: 450; 2007 foreclosure notices: 370
New T.F. Green/Amtrak bus service; may transport summer workers
Cape Destinations will begin running directly daily bus service between Cape Cod and T.F. Green Airport/Amtrak in Providence on April 1.
“We receive calls daily asking if there is a cost-effective and efficient way to get to T.F. Green airport in Providence so we believe the market is out there," said Peggy Garrahan, owner of Cape Destinations.
The initial service will include five daily round trips between the Cape and Providence’s Amtrak and TF Green Airport. The service, called CAPEX, will originate in Harwich with stops at designated commuter lots then proceed with express service to Providence. “We have worked closely with TF Green Airport and Amtrak to design a schedule around flight and train departures and arrivals” said Garrahan. "Our first bus will arrive at the airport at 5 a.m.”
The return trip will include stops in the New Bedford and Fall River areas to pick up workers bound for Cape Cod employment.
Cape Destinations has already received several calls from local chambers and businesses on the possibility of transporting employees to and from Cape Cod. “We are excited to work with local businesses and the community to make CAPEX a success” said Garrahan.
Can the state help on the summer labor front?
The state Labor and Workforce Development office is developing an "emergency response" to help businesses find summer workers. It will include working with the Department of Housing and Economic Development and the Department of Housing and Community Development to identify workers in urban areas who could fill vacant jobs and to create affordable housing for workers.
Dan O'Connell, secretary of Housing and Economic Development, said the state and private employers will work together to identify workers across the state and match them to jobs. A $250,000 grant will help create affordable housing opportunities on the Cape and Berkshires.
As many as 12,000 seasonal jobs may go unfulfilled on Cape Cod and the Islands if workers can't be found.
Business Connect scheduled for October 15-16
Cape Business Publishing Group will host the third annual Business Connect on Wednesday and Thursday, October 15 and 16, at the Resort and Conference Center at Hyannis.
This year, the conference will include businesses not only from Cape Cod, but also from Plymouth County and the South Shore. The event anticipates about 100 exhibitors and 1,200 attendees.
Companies interested in exhibiting should contact us as soon as possible. Previous Business Connect events were sold out.
In addition to a VIP reception on Wednesday night and an all-day business-to-business conference on Thursday, there will be a series of presentations on marketing to baby boomers, second-home owners, women and Gen X and Gen Y consumers.
For more information, contact please East Coast Expos at (617) 680-1735 or businessconnect2008@capebusiness.net.
Employment picture is stable
Despite rising fears of a recession, the employment picture on Cape Cod is remaining relatively stable.
The newest numbers show the unemployment rate of 6.9 percent in January matching the level one year earlier. At the same time, the actual number of people employed was slightly lower – 116,000 to 117,000; but so was the overall workforce – 124,700 to 125,700.
Statewide, the seasonally adjusted unemployment rate of 4.5 percent was lower than the 4.7 percent recorded one year ago and contrasts with the higher January 2008 U.S rate of 4.9 percent. This is the eighth consecutive month in which the Massachusetts statewide seasonally adjusted rate has outperformed the U.S rate.
A note of caution: the unemployment rate is a lagging indicator. If a recession has started, it will take several months to measure this on the employment front.
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Fighting latest home insurance rate proposals
Massachusetts Attorney General Martha Coakley is challenging steep rate increases proposed by the state's home insurer of last resort. Coakley has asked the state insurance commissioner to reject annual increases of 25 percent for homeowners in coastal areas such as Cape Cod, New Bedford and Fall River.
Statewide, this year's increases would average 13.6 percent. The rate increase would follow a 25 percent jump last year on Cape Cod, where fears of hurricane damage have led insurance companies to pull out.
The FAIR plan is a state-created insurer for cases where private insurers decline coverage. More than 150,000 homeowners participate. Coakley says this year's proposed rates aren't justified and will leave many homeowners unable to afford coverage.
The exodus of young people on Cape Cod
Last week, demographer Peter Francese told local leaders that the lack of affordable housing is tied directly to the flight of Cape Cod’s younger population. “We have to find a way to get people to stay on the Cape,” he said. “I’m fearful about the Cape’s long-term prospects.”
Francese identified zoning restrictions and "NIMBYism" as the main reasons for the housing crisis on the Cape. He said the Cape requires a massive public relations campaign and a relaxation of zoning and planning rules to make it more hospitable for young people. “The only alternative is long-term economic decline,” he said.
Our numbers actually show that Cape Codders under age 30 are in fact rising in number. But once they hit 30 – time to raise a family and want to buy their own homes – they are leaving in large numbers.
Just how serious is the loss of those between 30 and 45 years of age? Consider these numbers forecasting population trends for the Barnstable region (homes within 25 minutes drive time of downtown Hyannis):
Age 30-34: 2000 – 10,212; 2004 – 10,624; 2009 – 8,200
Age 35-39: 2000 – 13,200; 2004 – 13,361; 2009 – 10,943
Age 40-44: 2000 – 14,293; 2004 – 14,830; 2009 – 13,646
Lodging figures add up
The importance of lodging taxes cannot be denied, as evidenced by a recent Cape Cod Commission report, which noted that Cape Cod hotels generated more than $20.4 million in state and local taxes fiscal 2007.
Of the total, $12 million went to the state, and $8.4 million was returned to town coffers.
The numbers are down slightly from fiscal 2006, when a total of $20.7 million was taken in. The drop, said Marilyn Fifield, a research analyst with the commission, could be due to the conversion of hotel space, which is subject to room occupancy tax, to condominium units, which generally do not pay such fees.
The state charges a 5.7 percent tax on hotel and motel rooms. All of the towns on the Cape have adopted an additional 4 percent tax, bringing the total levy to 9.7 percent.
Calling all Geek Girls
Save the date for the Geek Girl Camp: 5:30 - 9:00 p.m. April 17 at the Heritage House in Hyannis.
Join this afterhours event and bring your laptop and thirst for tech to meet 99 other girls who want to learn about basic computer help, PC vs Mac, organizing emails & photo galleries, using local websites for promotion, blogging for beginners, website hints, Photoshop and using LinkedIN/Facebook/Flickr and other Social Networking for all ages and industries.
Appetizers, in-depth sessions with computer/Internet professionals, networking, cash bar and a schwag bag with incredible goodies to take home -- $25 per geek girl
More info: www.geekgirlcamp.com
People and companies in the news
Circuit City is closer to reality after recent approval by the Cape Cod Commission. Prior to the approval, Rogers & Gray Insurance Agency already had moved from its Route 132 location to larger facilities in Independence Park next to the Naked Oyster.
Circuit City will occupy the Rogers & Gray and old Star City Grill sites. Circuit City’s developer is proposing to provide $800,000 toward acquisition of the former Chili’s property and land in front of Wendy’s restaurant for open space and rotary improvements.
Paul A. Galop is the new business development officer for the Cape Cod region at First Citizens' Federal Credit Union. Galop was previously chief lending and credit officer for New England Savings Bank and vice president at Cape Cod Bank and Trust. He also is commissioner of the Cape Cod Baseball League.
Cape Cod Fitness Co. Inc. has relocated to 68 Center St., Stone Ridge Crossing, in Hyannis. It sells home fitness equipment and the new facility features a larger showroom.
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