A piece of Cape Cod receives a massive cash injection

On a recent Sunday, something unusual happened at West Dennis Beach on Nantucket Sound in the town of Dennis, Mass.: The parking lot filled up at 8 a.m

Eight miles north, on the opposite shore of Cape Cod, popular spots like Mayflower and Corporation beaches have always filled early with wealthy summer emigrants from Boston and NYC. But at West Dennis Beach — a haven for families and full-time locals, known for its laissez-faire come-and-go vibe — anyone could snag a spot at any time of the day.

Now West Dennis Beach and the Mid-Cape – a stretch of middle-class towns including Barnstable, Yarmouth and Dennis – is suddenly hot.

It’s a story that’s been playing out across the US: As the pandemic sent prices skyrocketing in luxury vacation destinations like the Hamptons, Nantucket, Palm Beach and Cape Cod, even relatively wealthy people were forced to weigh their options. The result has been real estate booms in formerly affordable, even seedy, neighborhoods.

Exterior of Mayflower Beach in Dennis on Cape Cod.
Caped Crusader: A once-bourgeois piece of Massachusetts, including Mayflower Beach, receives a large influx of cash.
Getty Images

Drive along Route 28 through the Mid-Cape today and you’ll see candy stores, miniature golf, and family-owned restaurants — no imposing hedgerows or country clubs. Still, you need deep pockets to stay there.

The average selling price for a mid-Cape single-family home in the first quarter of 2022 was $650,000, according to the Cape Cod & Islands Association of Realtors (a jump from an already inflated $590,000 in the same quarter last year). More than half of all sales were made above asking price and a third of all sales were in cash. In addition, about half the number of single-family homes listed for less than $500,000 was in the first quarter of last year. Inventory levels are at an all-time low.

For your average Joe, that’s a big ask for a second home.

Exterior of Corporation Beach
Mid-Cape offers Cape Cod’s charming beachfront clapboard homes that are now fetching higher prices too.
Getty Images/iStockphoto

But for those priced in affluent Cape Cod cities like Wellfleet and Chatham, or even ritzier markets like Nantucket and Martha’s Vineyard, the Mid-Cape is a value market.

“Five years ago, at any given time, there were about 2,700 single-family homes for sale on Cape Cod, and when I started there were about 7,200 single-family homes for sale,” said Mike Karras, a lifelong resident of Mid-Cape real estate agents at William Raveis in Yarmouthport. “We used to take people on marathon buyers’ trips, seeing eight houses in the morning and eight in the afternoon, spending maybe 15 minutes on each. Now you’re lucky if you can show your buyers three or four.”

Inventory is so small that some agents are selling the same houses just a year or two apart. Karras repeated the seller at 9 Orchid Lane in West Yarmouth in November 2018 when the home sold for $299,000.

Exterior of 9 Orchid Lane.
With high demand comes low inventory and that is why 9 Orchid Lane in West Yarmouth sold for $450,000 in 2020 – up 51% from 2018.
Alan Pierc

Two years later, he represented the 2018 buyers when they sold in October 2020. The selling price increased by 51% in two years and closed at $450,000.

In another case, Karras represented the seller of 11 Chase St. in Dennis Port, which sold in October 2020 for $595,000. In 2021, the same property — then with a different agent — sold for $825,000, a 39% increase.

Cassie Fruggiero-Lyons, a Compass agent and fellow Mid-Cape, saw one of her bids in Dennis receive eight bids. It eventually sold for $200,000 at a price of $1.51 million — before the home even went on the market.

Exterior view of 11 Chase Street, Dennis Port, Mass.
11 Chase St. in Dennis Port sold for $825,000 in 2021.
Alan Pierc

“Everything was done by word of mouth and only through our internal Compass networks and neighborhood association,” said Fruggiero-Lyons. “This market is crazy. Things are often done within a day and everything is sold with multiple offers.”

The situation is similar on the rental market in the region.

“By February, most of the rental market is fully booked,” said Fruggiero-Lyons. “You have to plan your rent for next summer almost by the end of this summer. Investors also come because you can rent something for top bucks and it gets booked all summer.”

“You have to plan your rent for next summer almost by the end of this summer. Investors also come because you can rent something for top bucks and it gets booked all summer.”

Compass Agent Cassie Fruggiero-Lyons

For locals, the Mid-Cape boom is welcome.

Karen Mumford, who works for Pretty Picky Properties in Brewster, Massachusetts, noticed that something funny was happening to the ordinary four-bedroom house across from her in South Yarmouth.

“The lady across from me passed away and her daughter inherited her house,” Mumford said. “A few years ago, this house occasionally rented for $1,500 a week. Instead of selling it, her daughter renovated the house and rented it out all summer for $5,500 a week.”

Interior of 11 Chase Street.
… And for $595,000 in 2020.
Alan Pierc

While the area isn’t known for flashy amenities, the recent influx of cash has brought some great new perks to the area.

Lark Hotels, which owns properties in Carmel-by-the-Sea, California and on Nantucket, is opening the Bluebird Dennisport Inn in Mid-Cape on June 3rd. Last November, EOS Investors — a New York firm that also owns the glamorous L’Ermitage Beverly Hills — acquired Red Jacket Resorts for an undisclosed sum. The resort’s portfolio is mostly marketed to mid-range families, but a $30 million renovation is now planned after this summer season. EOS has also just acquired Wequassett Resort and Golf Club (near Harwich in the middle of the Cape) for US$102 million.

“We love that the Mid-Cape has provided convenient, affordable vacations for generations, and we love that it’s easier to get to than other parts of Cape Cod,” said Tom Burns, Managing Director of EOS.

Exterior of Pelham House.
Silent investors have poured $20 million into Dennis Port’s Pelham House resort.
Alex Gordias Photography, Inc.

During the pandemic, Pelham House Resort in Dennis Port raised $20 million from a group of silent investors and used the funds to transform itself into Pelham Hospitality Group, which consisted of a renovated main hotel, the addition of an adjacent events space and a restaurant The rooftop overlooks the Nantucket Sound. They also acquired two smaller inns – Pelham on Earle and Pelham on Main – to handle the glut when the main resort sells out, as well as a nearby farm to supply produce for the resort’s restaurant.

Now, Pelham’s two-story oceanfront venue is one of the most sought-after wedding venues in the Cape.

“I don’t want to be a company. I want people to feel comfortable here,” said John McCarthy, managing partner and son of the original founder of Pelham House. “It took me some time to get used to the changes, but the product is worth it. You get this elevated level of service that you might not have gotten on the Mid-Cape a few years ago.”

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