‘The numbers have gone crazy’: Provincetown’s condo sale sets a $5 million record — as Cape Cod residents worry about a local building boom

“The numbers have gone crazy,” noted seller Victor DePoalo, in comments to The Wall Street Journal. “I’m giving up something I may never be able to get back.”

Pricey P-Town could wall off locals from home ownership

To locals, $5 million is a big step-up from the previous record: a $3.9 million condo sale earlier this month. While nobody’s arguing that Provincetown is affordable for most residents and visitors, few may have predicted that P-town, as it’s affectionately known by locals, would be in the same weight class as Martha’s Vineyard and Nantucket, only 50-plus miles to the south.

“Provincetown and its nearby coastal communities have some of the most expensive housing prices in the region because limited supply can’t keep up with wealthy second home demand,” Ben Mizes, president of Clever Real Estate, a licensed real estate agent and active rental property investor with 22 units under management, told Moneywise. In desirable coastal communities, prices can become increasingly disconnected from local incomes because wealthy second-home buyers are competing with a very different purchasing power.”

Provincetown is unique in that it’s small (17.5 square miles), but high in demand, which could worry locals priced out of their town.

“Luxury sales do not impact the values of typical homes since appraisers use comparables, but if high-end homes continually sell for inflated prices, it can influence future asking prices, comparables, and eventually tax assessments,” Mizes noted.

If there’s any good news for would-be buyers, it’s that nearby homes are nowhere near valued as much as DePoalo’s old condo.

“If the homes are nothing like the $5 million property, then it wouldn’t be an appropriate comparable to be used for appraisal or property tax assessment,” Sean Leo, founder and head of analytics at Riverdale Property Tax Relief, told Moneywise. “If for some reason the municipality mistakenly raises property assessments for other residents, then those homeowners would need to file a grievance to have their assessment manually reviewed.”

Provincetown could be a residential real estate outlier

Provincetown is unique, functioning as a housing market of two types in one ZIP code.

“There’s the traditional market where the cost of living is related to local incomes and year-round population,” Alexei Morgado, a Florida real estate agent and Lexawise founder at Lexawise, a real estate exam prep firm. “However, there is a destination market where rich buyers contribute their income and equity from outside the Cape.”

Additionally, in terms of the higher range of the real estate market, local incomes don’t typically dictate pricing these days.

“According to Provincetown’s housing data, there are 5,000 housing units, of which 56% are classified as being seasonally vacant,” Morgado noted. “The 2024 UMass Donahue study suggests that an income level of $218,600 was required by a family to afford a median-priced condo.”

Advice for local homeowners: follow the numbers

If you live in Provincetown, or a community like it, Morgado advises longtime owners to distinguish between an increase in net worth and an increase in cash flow.

“The sale of a $5 million condo will further validate that Provincetown has gained in real estate value and that home equity can be gained over time,” he noted. “Equity is realized only by selling the house, refinancing it, or borrowing against it.”

However, living in Provincetown can get more costly through rising assessments, insurance costs, maintenance, and replacement costs.