‘Oversupply Seems To Be A Problem’ In Ocean City
The Philadelphia Inquirer has this update. “Observers of the Shore market say, as higher interest rates are beginning to dampen sales, and condo construction, mostly involving investors, adds to a growing surplus of properties. ‘Whenever interest rates rise, the second-home market is the first one to take the hit,’ said (mortgage broker) Fred Glick.”
“‘”It’s the condo and lower end of the Shore market that’s taking a hit,’ said broker Paul Leiser. ‘These are the buyers who depend on lower interest rates to balance two mortgages, and with rising interest rates, they can’t do it. We’ve sold fewer units, but our dollar volume in the first quarter was higher than it was in the first quarter of 2005, Leiser said. It’s the million-dollar-house purchases that push up the medians.’”
“In Ocean City, the scene of numerous teardowns and massive development since the mid-1990s, there were more than 1,700 listings on the Ocean City MLS. ‘They’re saying that Ocean City is overbuilt by two years,’ broker Jerome DiPentino said. ‘That may be conservative.’”
“Jay Lamont, who has studied and owned real estate in Ocean City for about 40 years, said, ‘I have never seen anything even close to this debacle. Many legitimate and qualified buyers are waiting for fall, for the lender REO [real-estate-owned] listings and foreclosure sales on failed developer loans.’”
“Weekly sales reported to the Ocean City MLS are 80 percent to 90 percent lower than they were in spring 2005, with seven or eight sales a week, he said.”
“What’s going on? ‘The short-term investors at the Shore were in the condo market primarily, and they’re the ones pulling out,’ said (economist) Mark Zandi. ‘They don’t buy multimillion-dollar homes.’”
“Oversupply also seems to be a problem elsewhere in Cape May County. (Broker) Paul Schlimme in Cherry Hill, said that between Jan. 1 and May 31 there were 189 listings on the Avalon MLS, with about nine houses selling per month. ‘That means there is a 21-month supply in Avalon, and it is getting worse,’ Schlimme said.”
“The Wildwoods, too, were a draw for investors, who razed motels and filled empty tracts with condos. But with for-sale signs sprouting and interest apparently tailing off, that boom could be over, local market experts say.”
“In Ocean City, Lamont said, ‘open houses are held each weekend, sometimes as many as eight per block on Asbury Avenue, with almost no legitimate buyer traffic showing up even to use the bathrooms.’”
Thanks to the reader who sent in this link.
Ouch! I thought my backyard was different! In fact, not only are they not making any more land here, but the Atlantic Ocean is busy taking a lot of it away.
Interesting difference relayed to me by Wildwood old timer that rang true to me. Most shore towns cater to the richer set but Wildwood has traditionally been a blue collar vacation town. Old timer says a lot of the “investors” there are Philadelphia cops, firemen, what have you who have tapped out their 401ks and such to buy. The difference is that they, unlike their richer neighbors, don’t have an extra 50k lying around to weather any kind of storm.
“In Ocean City, Lamont said, ‘open houses are held each weekend, sometimes as many as eight per block on Asbury Avenue, with almost no legitimate buyer traffic showing up even to use the bathrooms.’”
I think this weekend I’ll venture over to the open houses across the street and use the bathroom. Seems like it would cheer the realtors up.
UK mort aps up 20% yoy
wtf ? they dereased rates last summer after raising them in 04 but this is wierd
Yeah I do not get the UK either. The only thing I can think is that they have a bunch of people living in one house.
they usually have an arson problem in beach areas around september
any arson numbers for US ?
I live in South Jersey. Many people deny a RE bubble here. That’s a bunch of bull. When ever manufactured homes go from 38k to 75k, you know something is wrong. Even my little Cape Cod in Gloucester Twp Camden COunty went from 93k to $220k from ‘96 to ‘06. If it had followed the historical ave of 4%, my house would be worth about $138k. Major bubble their too. I figure my house is overvalued by about 58%, and it’s not even a speculative area, just a plain old Archie Bunker style neighborhood.
I recently looked at the house my dad built in 1960 in Montville, New Jersey. He built it for $20,000. It’s on the MLS now for over $1M albeit “renovated” no doubt several times. It was on a couple of acres.
Every week more and more regions are coming out of denial. It is like watching re-runs of the San diego bubble bursting show,which is still in the first couple of episodes so to speak. Maybe your community will be next?
I haveto laugh because the post here mentioned a slowing in Wildwood, among others. Meanwhile, the Harrisburg (PA) Patriot News two days ago had a glowing article (front page in the business section) about the great new condos and impending price increases in Wildwood.
http://dcbubblemeter.blogspot.com/
New blog on our capital’s real estate scene (which is badly inflated).
It is not the original Bubble Meter Blog which is located in Washington, DC. He copied my term ‘bubble meter’ in his blog name without permission. It is not right.
David - c’est vrai.
I threw up one more post on the SDCIA board because I didn’t like the insinuation that people here aren’t buying because we are “on the edge” - i.e., we can’t really afford to buy. I of course love to slice into pompous asses like that. So I did and I am now REALLY done with it.
Today at 05:57 AM
——————————————————————————–
“She” and most others on the Ben Jones blog are hardly “on the edge.” We’re the people who were smart enough to see this Ponzi scheme for what it is and was and stayed clear. We are the people who will buy your properties out of foreclosure, if they are worthy, that is. Most of the suburban junk you people bought thinking you’d sell to some greater idiot are future casitas for 20 people and 10 cars or abandoned REO’s to be disposed of to wholesale landlord types.
I personally spent the end of the 1980s and early 1990s in a law firm in Texas doing bankruptcy, workout and FDIC/RTC work. I saw firsthand what happens when a bubble like this bursts, and this one is far worse than the one in the 80s. Most of you I suspect were in high school or college at the time and of course fall prey to the “it’s different this time.” BS.
Some of you all don’t seem to get it - that you are the bagholders of this bubble - the people who thought JDSU was “cheap” at $50 (it’s now $2.50 btw). I feel sorry for some of you and contemptuous of the rest.
Good luck. You’re going to need it.
Good for you, but they don’t want to hear anything that’s not “happy happy joy joy”. Reality won’t set in until it’s a few years too late for those guys.
“Native” replied to you with “I’ll be dusting myself off and moving onward and upward soon”. Translation: “It’s just a flesh wound!” LOL
good attempt to confront them with blunt truth, but they’d rather live in their fantasy world in which people earn $100k/year by virtue of owning a spec house in some podunk town.
TxChick - sic ‘em!
way to go txchick!! I saw the flames from your first post, LOL!!
“Debacle.”
Is anyone making a list?
A is for atrophy.
B is for bust.
C is for collapse.
D is for debacle.
E is for ennui.
F is for falling.
G is for …
G is for … Gotterdammerung.
H is for hosed.
And H for Hysteria or H-bomb.
I for Idiot
J for Jackass
K for Krach
L for Looser
M for Mania
N for Noose
O for Oblivion
P for Psychosis
Q for Que sera sera
R for Rotten or Real Estate
S for Salvage
T for Terror
U for Unforgettable
V for Vengeance
W for Washington or Why
X for ????
Y for You you you you and you.
You see how power of suggestion works.
And Z for ZERO !
Now for all you Doctor Who lovers out there;
if we had
K for Kelad, then after the villain used them as a basis for the Daleks we could have
x for “xterminate, xterminate …”
sorta appropriate for flippers
As I mentioned a few days ago after returning from vacation - same stuff happening just up the jersey coast a tad on Long Beach Island. What I find really sad is how so many of the old, quaint beach cottages are being torn down and the giant homes put up in their place. There’s a section of LBI up north by the lighthouse - Loveladies and Harvey Cedars - that used to be very undeveloped. The only homes up that way were the giant, modern houses. I remember as a little kid seeing them and thinking, “Wow ~ I’ll bet movie stars live there!” Now that’s all you see up and down the island - including the formerly undeveloped parts.
TXCHICK57 - nice rants to those morons at that bull site. We’ll be visiting them in belly-up court. That would be fun.
Single-family home sales sink 16 percent on Cape
CAPE COD TIMES
June 27, 2006
Sales of single-family homes and condos in the Bay State declined last month when compared with May 2005, according to the most recent sales data.
However, sales slid a little more dramatically on the Cape.
Here on Cape Cod, sales of single-family homes were down about 16 percent, going from 472 units in May 2005 to 396 last month.
Though there was little change in the median sale price - meaning half the homes sold for more and half sold for less - for single-family homes. Last month, the median sale price on the Cape was $381,250, up 0.46 percent, from $379,500 in May 2005.
At the same time, sales of Cape condos sank just over 24 percent, going from 149 in May 2005 to 113 last month. The median condo sale price dipped, too. It went from $255,000 in May 2005 to $250,000 last month.
http://www.capecodonline.com/cctimes/biz/singlehome27.htm
Woohoo! Ocean City houses for everyone!!!
A Slam Dunk in your Face Dissing:
http://www.xanga.com/russwinter