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If you want the cleanest way to understand why housing felt like it “re-priced” in the 2020s, look at two markets that normally behave differently:
- Cape Cod (a lifestyle + second-home + retirement magnet with tight supply)
- Boston Proper (a job-driven, high-income urban market with chronic inventory constraints)
From the end of 2019 to the end of 2025, both moved higher — but Cape Cod’s move was the loudest, and the “why” matters for what comes next.
The simple scoreboard: end of 2019 vs. end of 2025
To keep this apples-to-apples, I’m using commonly-cited market benchmarks:
- Cape Cod: single-family median price (2019 annual; 2025 late-year market report)
- Boston Proper: 2019 single-family median price (City of Boston report) and a late-2025 “typical value” benchmark (Zillow) as a practical year-end proxy
| Market | End of 2019 | End of 2025 | Change |
|---|---|---|---|
| Cape Cod (single-family median) | $433,000 | $785,000 | +81% |
| Boston Proper (single-family median / typical value proxy) | $608,000 | $775,123 | +28% |
Sources: Cape Cod 2019 median sale price $433,000. Cape Cod late-2025 single-family median $785,000. The Warren Group Boston 2019 single-family median $608,000. FRED Boston late-2025 typical home value $775,123 (data through Nov 30, 2025). Zillow
What that tells you right away:
Cape Cod didn’t just “appreciate.” It re-leveled — and it did so in a period where the U.S. financial system experienced a once-in-a-generation liquidity surge.
Follow the money: M2 didn’t just rise — it surged into assets
Here’s the part that too many housing conversations skip: prices don’t move in a vacuum; they move in a financial system.
From December 2019 to November 2025, U.S. M2 money supply rose from $15.35T to $22.32T — roughly a +45% increase. FRED
Even more important: the big acceleration hit early.
- Dec 2019: 15,347.6 (Billions)
- Apr 2020: 17,005.4
- Apr 2022 (peak): 21,750.0 FRED
That kind of liquidity expansion tends to show up most visibly in asset prices (stocks, real estate, “hard” assets) because:
- cash is abundant,
- borrowing becomes cheaper (at least initially),
- investors hunt for yield and inflation protection,
- and “scarce” things get bid up first.
Housing — especially scarce, desirable housing — is basically designed to absorb excess liquidity.
How did “extra money” actually find its way into real estate?
It didn’t arrive as a single check labeled “for housing.” It arrived through channels:
1) Cheaper capital and easier leverage (especially early in the cycle)
Lower rates didn’t just help owner-occupants — they helped every buyer with access to financing, including investors. When the cost of money drops, the price of long-duration assets (like housing) tends to rise.
2) WFH + lifestyle migration rewrote “value” (Cape Cod’s rocket fuel)
Cape Cod’s move wasn’t only monetary. It was also a demand shock: households re-weighted life toward space, water, and quality-of-life. In a constrained coastal market, demand shocks show up in price.
3) Asset inflation + wealth effects changed what people could pay
Rising stock portfolios, business liquidity events, and concentrated gains created a buyer pool that could (and did) pay premiums.
Which brings us to the accelerant…
The accelerant: large investors pushed harder into single-family homes
Over the last few years, the market saw a rising presence of investor buyers in single-family housing. The debate is often emotional, but the data is clear that investor participation increased meaningfully during the pandemic era and again as conditions shifted later.
A few credible reference points:
- Harvard’s Joint Center notes investor purchases averaged about 16% in the three years pre-pandemic (2017–2019), then rose during the pandemic period. Joint Center for Housing Studies
- HUD’s policy research recap (citing CoreLogic among others) highlights how investor purchases surged, with large portfolio investors driving a lot of growth; it also notes CoreLogic’s estimate that institutional investors bought ~3% of homes sold in 2021 (with “investors” broadly much larger than that). HUD User
- A 2024 GAO report synthesizing dozens of studies documents the institutional single-family rental footprint and reported market effects. GAO+1
- A St. Louis Fed piece (2025) cites research indicating investor participation hit very high levels in 1H 2025 (note: “investor” here is broader than only mega-institutions). Federal Reserve Bank of St. Louis
Why this matters even if institutions are not “most” buyers:
In tight-supply markets, you don’t need investors to be the majority. You only need them to be:
- consistently present,
- well-capitalized,
- and willing to pay/close fast.
That changes the tone of bidding, especially for homes that also work as rentals or second homes — which is basically the Cape Cod playbook.
The wealth transfer effect: luxury homes as a “store of value”
Here’s the structural shift that feels “permanent,” particularly at the high end:
Luxury housing increasingly functions like:
- a hard-asset hedge (scarcity + utility),
- a lifestyle asset (something you can live in, not just hold),
- and in some cases, a balance-sheet strategy (parking wealth in a tangible asset).
When enough capital starts treating housing this way, the market doesn’t revert cleanly back to old valuation norms. You can still get corrections — but the floor can lift.
The Cape Cod story fits this perfectly:
- It’s supply-constrained.
- It’s amenity-driven.
- It’s attractive to cash/large-downpayment buyers.
- It can be used (or monetized) multiple ways.
Boston luxury shares some of those traits too — but Boston’s broader market has more friction (condo supply cycles, urban preference shifts, higher regulation complexity, etc.). That’s one reason the Cape’s growth rate outpaced Boston’s so dramatically in this window.
2025 year-end read: why prices held up even with “higher-for-longer” rates
If mortgage rates were the whole story, 2025 would have been a washout. Instead, many segments stayed firm because:
- Locked-in supply is real. Owners with 2–4% mortgages don’t want to move.
- Cash/wealth buyers are rate-insensitive. Especially in luxury and second-home segments.
- Investors adapt. When retail demand softens, investors often negotiate harder — but they don’t disappear, especially when rents and long-term scarcity still pencil out. Cotality
So the market got “sticky”: fewer listings, fewer forced sellers, and a buyer pool at the high end that still had dry powder.
Soft forecast: why the pressure likely stays upward (not necessarily “straight up”)
A realistic outlook for 2026 and beyond is continued upward pressure, with more unevenness by price band and micro-location.
Why the bias is still up
- Inventory constraints aren’t going away quickly in Boston or on Cape Cod.
- Wealth concentration remains a major demand driver for premium property.
- Housing’s role as a “value store” is more culturally and financially embedded than it was in 2019.
- Investor participation is now a standing feature of the market ecosystem, not a one-off anomaly. GAO+1
What could interrupt the path (even if the long-run stays up)
- a recession with job losses (Boston is more exposed here),
- a serious equity drawdown that hits high-end liquidity,
- regulatory shifts targeting institutional activity,
- or a meaningful wave of new supply (unlikely on Cape; selective in Boston).
My bottom line:
The 2019 market was priced for a different monetary regime and a different buyer mix. The 2025 market is priced for scarcity + wealth + optionality. That combination doesn’t scream “cheap,” but it does explain why downside has been harder to realize than people expected.
