Host, Christine Karpinski:   Today's guest is Rick Tourgee. He is a real estate broker in the Cape Cod area, specializing in Provincetown, Truro, and Wellfleet. He's been a real estate agent and broker since 2000, and he has a brokerage that he started back in August of 2006, Century 21 Shoreland.

Thank you so much for joining, Rick.

Guest, Rick Tourgee:  Thank you.

Christine:  Now, we're going to just talk a little bit about the real estate market, with regards to, of course, the second‑home market. We always joke, "Does anybody live full time in Cape Cod?"

Rick:  Here in Provincetown, it's a small town, but here in Provincetown we have about 3400 people that live here year‑round.

Christine:  And then during the peak of the season, how many thousands of people are there?

Rick:  Oh, in the peak summer season, July and August, it can swell to 50 or 60 thousand people per day in town.

Christine:   Yeah, that gets a little crazy. I'm thinking that the permanent residents leave during the summer.

Rick:  Some do, yeah.  Exactly.

Christine:  Anyways, I wanted to talk to you a little bit about the market. As you know, the real estate market has been sort of fluctuating throughout the country.

Cape Cod, in the past, has always been sort of sheltered, if you will, from a lot of huge fluctuations. I imagine that's because it's been around for so long, let's face it, a couple hundred years since the Pilgrims landed; and where you don't have a lot of supply left, of course the demand is there, and the prices typically don't fluctuate as much. But I'd love to talk to you a little bit about how Provincetown has been doing in the last, say, six months to a year and a half.

Rick:  Sure, sure. Yeah, definitely, here in Provincetown we are in a buyer's market. True, there's no more buildable land available in Provincetown, except in maybe one or two instances, but basically all the buildable land here in Provincetown is built on. We cannot make any more land. We're surrounded by water.

Christine:  We went through this in Destin a few years ago, where there was pretty much a moratorium on building, and what we saw was a lot of developers would come in and buy these single‑family homes that were on the beach, knock them down, and build a high‑rise. Have you seen any of that going on there?

Rick:  No. Provincetown is definitely a resort community, and the town really strives to keep the character of a true, you might say "charming", Cape Cod town. So you really don't see any high‑rises here.

Christine:  Good.

Rick:  But you do see a lot of renovation of properties that are already built.

Christine:  Mm‑hmm.

Rick:  But again, it's impossible to go outside of the footprint of the current property, for the most part.

Christine:  Right. I would imagine there are some really strong guidelines when you buy a fixer‑upper in Provincetown. I've watched enough "This Old House" episodes,  and hear them griping about, oh gosh, they've got to go through the Historical Society, then they've got to go through the Preservation Society, and this society and that society. Is that true in that area?

Rick:  Oh, very much so. If a property is located in the Historic District, anything you do to the property must be approved on many levels throughout he town government.

Christine:  I would imagine that makes the process take a lot longer.

Rick:  Oh yes, because everything has to be approved by, again, the town, the Historic Commission ‑‑ color of paint, style of the windows, what the windows look like, everything has to be approved.

Christine:  But you know what? Credit to them, because it is a beautiful area, and you definitely know what you're getting into when you walk into a place like Provincetown. What you envisioned in your mind is truly what it is, and they've really been able to preserve the look and feel of the Cape Cod area.

OK, so you said the market is really more a buyers' market right now. Have you seen the prices fluctuate, or is it just kind of slowing down, as far as how quickly the properties are selling?

Rick:  Well, over the last five years, prices have escalated very dramatically, probably more so here than in other parts of the country.

Christine:  Mm‑hmm.

Rick:  And what's happening is prices are now coming down to a more realistic level, but they're not plummeting either. Because here in Provincetown ‑‑ and Truro, Wellfleet ‑‑ it's mainly a second‑home community. Most people that purchase homes here are somewhat affluent, and if they can sell the house, great, but they don't need to sell it. So you don't see a huge price reduction, because they don't need to sell.

Christine:  Right.

Rick:  But obviously, on the other side of the coin, buyers do not need to buy here. They buy because they want to. So if buyers don't feel that it's a great value, they wait.

Christine:  Yeah, they wait till the next one comes up. You know, it used to be a joke that if you wanted to buy on Cape Cod, you had to wait until somebody died and they had no heirs.  Because the properties would go from generation to generation to generation.

And we did see, in the last three to five years, more properties changed hands, I think. Would you agree that it's because the cost of the property appreciated so much that some of the sellers were not real keen to sell, but they were just like, "You know what, if I can get this much money, it's sort of silly not to cash in."

Rick:  Exactly. Especially if a property owner owns a multi‑family home, where they have the ability to condo the property, convert them to condo, and sell off one of the units while remaining in the other unit.

Christine:  Ah, that's a sweet deal.

Rick:  Now here in Provincetown, approximately 70 ‑ 75% of the real estate in total is condominium.

Christine:  Wow. And let's be clear, it's not condominiums as we would know them in the rest of the real estate market. When we think condominium, we think multi‑unit, multi meaning hundreds of units within one building. You're talking about taking a duplex and splitting it into two or three, and selling off half or a third, and that's considered a condo. Correct?

Rick:  Exactly. The majority of the condo associations here in Provincetown are probably three, four, five units, top.

Christine:  Right.

Rick:  I can only think of maybe two or three or four condo associations that have more than ten units in them.

Christine:  Mm‑hmm. Now what percentage of the second‑home owners, or buyers, in that market actually purchase with the intention of renting it out? Do you see that that's more of a trend ‑‑ according to the National Association of Realtors, they said that a very low percentage of people actually even have any intentions of renting it out. Since Provincetown has always been known as a really strong rental market, do you find that different there?

Rick:  Yes, an extremely strong rental market here, especially in July and August, that's our peak season. For many property owners, when they do purchase the property, they would like the ability to rent out the property on a weekly basis in July and August, to at least help pay the mortgage.

Christine:  Mm‑hmm. Now, are there any ordinances against renting homes in Provincetown?

Rick:  Not at this time. The only thing a property owner has to do is obtain a rental certificate from the town.

Christine:  Right.

Rick:  Basically what that is, is a certificate from the town saying that the property is OK to rent out.

Christine:  Right, right, right.

Rick:  You know, it has to have working smoke detectors, a fire extinguisher, et cetera.

Christine:  Mm‑hmm. And they have to collect and pay sales taxes, too, is that correct?

Rick:  No.

Christine:  Oh!

Rick:  Nope.

Christine:  Hey, we found an area where you don't have to collect and pay sales tax.

Rick:  Exactly. Property owners here, when they rent out the property, that money is theirs. They do not have to pay a sales tax or a room tax to the town.

Christine:  Really? How does the infrastructure, such as the roads and all that, how is that paid? Are the property taxes pretty steep there?

Rick:  No, believe it or not, our property tax here in Provincetown‑Truro‑Wellfleet is extremely low compared to other parts of the country. For instance, a typical $300, 000 one‑bedroom condo here, your property tax might be $1200 ‑ $1500 a year.

Christine:  Hmm, that's not bad. Let's keep that quiet.  Because as soon as they hear, "Hmm, it's cheap, " they might raise it.

Rick:  Yeah, I know it. Well, we don't have many schools here, it's mainly an adult community here in Provincetown.

Christine:  Mm‑hmm.

Rick:  So we don't have the high cost of running a huge school system.

Christine:  Correct. Yeah, which happens to be the biggest influence on your tax bills.

Rick:  Exactly.

Christine:  That school tax is always a killer, which, for those that need it, it's great; but like you say, if you're retired, you don't necessarily need it. Oh, can you hold on one second, we just need to take a break for a word from our sponsors.

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And now back to our show. Now, you were talking about a condo, would be around 300 thousand is that a real figure?

Rick Tourgee:  Oh yes, yes. One bedroom condos here which would consist of approximately you know, 300 to 400 square feet would run anywhere from 300 thousand to 350 thousand. That would be about a 1000 a square ft.

Christine:  Which is pretty normal for vacation markets?

Rick:  Yes, in a resort community like Provincetown, correct.

Christine:  Right, Pretty normal for a vacation market. Anywhere in the 500 to 1000 dollar depending on where you are and where you're located. Now I imagine there are some really high end properties there. So about 300 would be the low end, what's the mid range and the high range?

Rick:  On the high range of a condominium you can obtain a two bedroom on the water for a million or more.

Christine:  Wow.

Rick:  Yeah, so big difference.

The minute you're on the water with a direct water view or if you're directly on the water the price escalates dramatically.

Christine:  Now does it matter to the renters as much whether it's a condo or a full home?

Rick:  A lot of people would prefer a home, but they're very open to condos as well. Especially they know the market here in Provincetown is mainly condominiums. So that they don't mind condos at all.

Christine:  OK, well that's good.

Rick:  As it's a good location right in town. If it offers parking and again if it's directly on the water ‑ the better. And they pay more for directly on the water as well.

Christine:  well, you know, that's pretty typical everywhere. You know, it's location, location, location.

Rick:  Exactly a two bedroom two bath condominium directly on the water would rent for about $3000 a week in the summer time.

Christine:  OK, so that's actually not so bad. But you're talking it's about a million dollars to buy, right?

Rick:  Yes. A two bedroom, two bath condo directly on the water in turn‑key condition would be roughly a million or more.

Christine:  Yeah, so it's going to be a little more difficult to break even in that area but obviously a lot of people buy for their own personal use as well. Is that correct?

Rick:  Exactly, exactly. I tell buyers with the current real‑estate market and the prices and what you can expect for rental income. I tell my buyers that if you're putting approximately 20% down at today's mortgage rate the rental income that they would receive would cover approximately 40‑50% of their total annual cost, not factoring in any tax benefit.

Christine:  Right. Now is that talking about renting it through a property manager or renting it by owner?

Rick:  Pretty much, a lot of owners actually rent on their own through a couple of websites. One of them is cyberrentals.com.

Christine:  Yep! Know it well. We own it.

Rick:  You own Cyber Rentals?

Christine:  Yeah, actually we do wholly own Cyber Rentals.

You know, is there anything that when somebody is looking to buy a property in Provincetown. Something that is sort of like a must have coveted item that renters both look for and the owners look for?

Rick:  Owners look for a good location in town which would be approximately a five to 10 minute walk to the center of town, where town hall is located. They also look for a property that has at least assigned parking for one car.

Christine:  Yeah.

Rick:  That's very, very important.

Christine:  Do renters really, really want that?

Rick:  We're finding more and more that renters don't mind a property without parking. Because so many people fly into the city of Boston and then take the fast ferry, which is a 90 minute ferry ride from Boston directly to Provincetown because once you're here in Provincetown, you don't need a car.

Christine:  It's pretty much a walking city.

Rick:  Oh it's great.

Christine:  Right, right.

Rick:  Great. Nothing like it...

Christine:  So when you're looking to buy a property and you're up against one that has parking and one that doesn't have parking and you're kind of split. You should definitely go for the property with the parking, right?

Rick:  Exactly.

Christine:  Yeah.

Rick:  Exactly. Also, a lot of tenants now are demanding air‑conditioning.

Christine:  Ah! Interesting. Interesting in that it wouldn't have been there.

Rick:  Exactly. They're demanding air‑conditioning and I'm telling a lot of my property owners to get high‑speed Internet access.

Christine:  We're seeing that everywhere, I own in the mountains of Tennessee and never before did anybody ask about Internet. You know that in Florida where I've owned for a long time as well, it's always been a common question but Tennessee, they're starting to ask and I think people, people need to be connected. I personally would love to go on vacation without being able to be connected but there are some people that really need to stay connected while they're on vacation so...

Rick:  Exactly. So even if they only connect for an hour in the morning before they go to the beach you know. It's great.

Christine:  Yeah, now is it available in all areas? Because that is definitely one of the things that I run into the mountains when I'm looking for properties. If you're in a market where cable isn't there and the phone lines there don't have the fiber optics for high‑speed Internet. They don't have the relays and all that stuff put in there, the only access for high‑speed is cable television. You know in the mountains it's just not available everywhere. Is it available pretty much everywhere in Provincetown?

Rick:  Oh yeah. Here in Provincetown, Truro, Wellfleet, it's very readily available.

Christine:  Excellent, excellent. So is there anything else that you would say would be a deal breaker if you were looking at properties in Provincetown and something that maybe somebody wouldn't necessarily think about?

Rick:  Again, most of my buyers are not even located here on the Cape. Most of my buyers are located more than a 150 miles away. Buyers look for property that is in turn‑key condition because they're so far away they don't want to have to manage a contractor doing a job on the property.

Christine:  Yeah, that's never any fun. It's not fun when you're right there but when you're doing it from a distance it does make it that much difficult and you sort of have to acquiesce to some of the issues that you would normally fight about if you're right there. Like if something wasn't done perfectly, if you were on the premises you might make the contractor re‑do it right then and there but sometimes you just have to acquiesce just since you're not there.

Rick:  Exactly, exactly. And, you know again in this market. You know, with the number of properties that we have available for sale, if there are two properties and they're pretty identical. But one is in turn‑key condition and the other is not. Even at a lower price, the people would rather pay more for the turn key property.

Christine:  Yeah, to not have the hassle. That makes total sense. Total sense. Well, you know what? I just want to thank you so much. This was very helpful. I think people looking to buy in Provincetown now can turn to a realtor with confidence and know that there are some good realtors out there that know what they're doing and know a lot about the market.

It's important that whenever you're buying a vacation home to use a real‑estate agent because if you don't, you might be missing out on some of this valuable information that Rick has brought to us. For instance, you know the value of buying a property with a parking spot vs. buying one without and knowing all the nuances of the area is really, really important.

If you're interested in buying properties in the Cape Cod area, certainly I encourage you to give Rick a call. One thing that I noticed when I was looking at his website was that he has at the bottom the last time it was updated. And, kudos to you Rick, the last time that the website was updated was today. That definitely to me shows that this is a very active, very good broker that keeps everything up to date on his website.

Rick:  Well again, most of the buyers that start looking for property look on the Internet so I make sure my website is updated every day.

Christine:  Well that's awesome...

Rick:  It's so vital to give people the proper information all the time.

Christine:  Can you give us your website address?

Rick:  It's at www.ricktourgee.com.

Christine:  OK. Again, that's at www.ricktourgee.com. We'll also have it on our website at Owner Community of course. And if you want to call Rick; you want to get off this podcast and all him and talk to him about properties. His phone number is area code 508‑487‑6002 and be sure to tell him that you heard about it on the Owner Community on Homeaway.com.

Thanks so much Rick for joining. I hope you have a wonderful summer season there in Cape Cod. I know every season is great there in Cape Cod but summer is definitely the best time. Thanks again.

Rick:  Thank you.