A Note From Cape Associates President and CEO, Matthew Cole
It goes without saying but I’ll say it anyways - this year flew by. 2022 proved to be less chaotic and more predictable than the two years that preceded it; however, was just as busy. It was busy both in absolute terms - we will complete a record amount of construction in 2022 (on a non-adjusted basis) - and in relative terms as it feels busier because we remain shorthanded. Our total volume was inflated by higher prices but is primarily driven by a market that remains hot. It has now been several years since we have been able to match all requests for our services with enough resources to tackle all such requests. We have a long waiting list.
First, the good news. Real estate demand on Cape remains strong - the value of your property has likely seen strong appreciation since 2019. The unpredictable, ballooning lead times that hit us in 2020 and 2021 are starting to abate. We have encountered very few instances where product was unavailable or took longer to get in 2022 than in 2021 or 2020. We are hopeful that the supply chain is recovering and that slowing markets elsewhere will allow us greater access to the products we need going forward. Pricing on lumber and other select items has come down a bit. We continue to see and expect to see price increases in other categories.
What challenges lie ahead? There are a few. We hope for inflation to be tamed such that construction costs become more predictable. After years of being spoiled with relatively flat pricing the last 3 years has been a wild ride. We worry that interest rates will continue to go so high that there is impact to our market. Right now if you’re a resident in a variable rate mortgage or in a situation where you might have to move and rely on traditional mortgage financing, it’s uncomfortable. A $450,000 mortgage costs over $1,000 more per month - that’s devastating to working families that want to move into this market. The number one risk to our business, to all businesses on Cape Cod and - quite frankly - the quality of life on Cape Cod is our undersized workforce. The Cape desperately needs more housing to attract a greater workforce to meet current and future needs. It affects your builder, your coffee shop, your favorite restaurant, just about every business you rely on. I joke that it will be no fun when your toilet clogs and you have to wait for your plumber to arrive from Rhode Island. The last couple years we have encountered restaurants open fewer days, reduced services and in some cases business owners simply retire and close their doors rather than transition the business to have it carry forward. There is good awareness for the problem and a variety of solutions out there. Many towns on Cape have changed their zoning to allow for ADU’s (accessory dwelling units) - one way to add a small housing unit onto developed property. This is one small solution where many solutions are needed. In Orleans we are about to turn the lights on at our first ever municipal sewer system. This will allow the apartment development that zoning changes over the last few years have provided for to come to life. We have a property on 6A where we hope to build 5 apartments. There are a good number of Affordable Housing developments in the works at various stages in most towns on Cape. These projects will provide hundreds of new housing units - but it won’t be enough. We need to get back to the production level of the 80’s and 90’s where we were producing over 2,000 units per year; recent years have hovered around 500 per year.
Want to help? Support the great organizations that are helping to solve the housing crisis:
I will continue to advocate for housing of all types and sizes. I do so because I want my children to enjoy a vibrant, year ‘round community where they can live, work and thrive. I don’t want you to have to go 3 towns over for your favorite coffee or wait for your plumber to show up from Rhode Island. I want Cape Cod to continue to be a place that people want to live, to vacation and to own seasonal homes. I hope you do too.
Thank you for your continued support of our business - it’s important to me and to the hundreds of families that our business supports. Happy Holidays.