Cape economy: Gleam amid the gloom (Cape Cod Times)
Published on Monday, January 11, 2010
From the Cape Cod Times today - Read more here: Cape economy: Gleam amid the gloom
By Sarah Shemkus
sshemkus@capecodonline.com
January 10, 2010
On the Cape this fall, unemployment rates were still high, hundreds still faced possible foreclosure and the tourism business still lagged behind previous years' performances.
But an assessment of some of the region's economic indicators reveals that hidden among all the bad news were a few hints that the region's economy may have begun to turn around.
Residential real estate numbers were particularly strong.
"September was still down, but by the time we got to October it all flipped around," said Lynette Helms, president of the Cape Cod and Islands Association of Realtors and CEO of Real Estate Associates on the Upper Cape. "October, November and December have been fabulous."
In the months of September, October and November, a total of 878 single-family homes were sold in the region, according to numbers from the realtors group. Over the same three months last year, just 730 homes were sold; in 2007, 751 properties were sold over the same period.
And prices even began to stabilize, albeit at much lower levels than the market enjoyed in 2007.
The median price of a single family home in September 2007 was $400,750; by the same month last year the midpoint price had dropped to $320,000.
Helms is cautiously optimistic about what the fall's numbers mean for the market overall.
"Everything is so fragile that it's not going to take much to throw it back where we don't want it to be," she said. "But barring unforeseen situations, I'd say we're definitely on the upswing."
Foreclosure numbers also looked positive. According to The Warren Group, a Boston-based real estate data firm, 116 foreclosures were completed on the Cape from September to November, a decrease of 16 percent as compared to the same period in 2008.
However, the numbers may not tell the whole story, said Nancy Davison, vice president of operations at the Housing Assistance Corp. in Hyannis, which offers foreclosure prevention counseling.
"We haven't experienced any slowdown at all — we're still seeing about 100 new people a month," she said.
The dropping number of completed foreclosures, she said, is likely due to banks' increasing willingness to offer trial mortgage modification plans to struggling homeowners. But she said it is too soon to tell how many foreclosures these modifications will ultimately help prevent.
"How these temporary modifications are going to end up turning out, we don't really know," Davison said.
Contributing to the foreclosure problem is, of course, the rising unemployment rate.
Jobless rates rose throughout the fall, as is typical on the Cape, but hit much higher levels than in previous years.
By November last year, the unemployment rate on the Cape and Islands was at 9.4 percent, representing more than 12,400 jobless residents. At the same time in 2007, only 4.3 percent of area residents were out of work.
And the unemployment situation is starting to wear on some of the people who come into the Career Opportunities center in Hyannis, said center director Al Roy.
"The feeling is a significant sense of frustration, because there's obviously a lot more job-seekers than there are jobs," Roy said. "People can lose that drive, that motivation."
As unemployment stays high, demand has increased for programs that help low-income residents pay for home heating fuel.
In the 2008 heating season, throughout the South Shore and Cape, 8,290 households applied for federally funded fuel assistance, according to Lisa Spencer, director of the fuel assistance program at the South Shore Community Action Council.
In the 2009 heating season, there were 10,069 applicants; going into the 2010 season, Spencer has already received applications from 11,205 households, including more than 1,000 first-time applicants.
And there will likely be more need in the coming months, Spencer said.
"It's usually January, February, March when people realize they need some help," she said.
For the tourism industry, the fall was slower than in previous years, but better than many had expected, said William Zammer, chairman of the Cape Cod Chamber of Commerce board of directors. Many hotels and restaurants offered special deals, he said, enticing visitors and locals alike.
"It certainly was a little better than it was in June," he said. "Everybody is still a little off, I think, but it wasn't as bad as I may have expected."
However, the conference sector, an important component of fall business on the Cape, was down significantly, Zammer said.
And, looking ahead, Zammer foresees a long, slow path to recovery.
"It will be a long time before it's the same," he said. "We've got another year of treading water, particularly if the unemployment figures stay high and companies are not investing."