Spring/Summer 2009

Topics:
A Pause in a Growing Resort Market??
New Commercial Development Planned
New Rules Affecting Condo Sales

Ocean Property Realty, LLC distributes information about the local market as a service to interested visitors and real estate investors on a regular basis. We update that information so visitors to the site have current information when considering real estate purchases and rentals. Check back from time to time to find the latest news about our unique shore community resort market.

A Pause in a Growing Resort Market??

Real estate at the shore is primarily a second home market. There are year round properties but they are a small percentage of total sales. For example, the total year round population of the Wildwoods By-the-Sea is approximately 12,000 residents in the four municipalities. That number can swell to a quarter million on a summer day and a high percentage of those visitors are either living in an owned unit or home, or renting a motel room or apartment.

In addition, the Jersey Cape is located within a tank of gas of nearly a quarter of the nation's population. The shore is a "drive to" destination for visitors from New York, Philadelphia, Baltimore, Washington, DC, and all the densely populated towns and suburban areas in between. Business demand can actually increase during challenging times such as the country is facing this year.

So, how are the Wildwoods By-the-Sea doing right now? It is a mix of situations depending on what you are looking to buy or rent.

- There are many very attractive properties for sale. Units in condotels are priced to reflect rental income in many cases although property maintenance and operations are important considerations also. Prices of newly built condominium buildings are quite attractive in many cases although that situation will not continue when Jersey Cape resumes the surge in development and resort business growth in coming months.

- Rentals in some buildings, including motels, condotels and well-located condo rental buildings are actually up from past years in many cases.

There is no crystal ball but it is a buyer's market overall. Call today to discuss those opportunities and your particular interests with Ocean Proper Realty. We have been involved in this specialized market for more than thirty years.

New Commercial Development Planned

The Business Improvement District is developing an aggressive program for center city commercial development in the Wildwoods By-the-Sea. This may create some interesting opportunities for commercial property investors and business owners who want to open a new venture in one of America's best known beach and boardwalk communities.

The development will focus on restaurants and entertainment although some retail business is also planned. The area has historically been a resort oriented business district for more than half a century. The location, just a block away from the beach and boardwalk with more than a quarter million visitors on a summer day, provide a ready market for these businesses.

Conceptual designs have been completed for facades that focus on the resort's very popular and well known Doo Wop theme that parallels the extremely successful Art Deco concepts in southern Florida. The goal is to develop the area as an additional attraction, an event and entertainment area with a unique and festive atmosphere to serve the resort and recreation visitors and those attending events during the extended season developed by the new beachfront Wildwoods Convention Center and the growing Wildwoods events center.

The district is now providing fare free transportation throughout the center city area to attract more visitors. New businesses opened this year but there is still a very real opportunity to purchase commercial property or open a new business while real estate prices are reasonable and attractive opportunities are available. Grant programs are under development for new and growing businesses. Interested businesses and investors who want to get in on the ground floor or this new development opportunity should call Patrick Rosenello, BID Executive Director at 609.523.1602. Information is also available on plans and properties for sale from Ocean Property Realty at 609.729.3200.

New Rules Affecting Condo Sales

Due diligence is especially important when purchasing condominium properties in this challenging real estate market. Read the association documents. Check the financial condition of both the association and the property. Are units sold and are owners paying their condo fees in a timely manner? Are large cash flow assessments or capital assessments contemplated? Informed buyers who select the right properties are benefiting from some very attractively priced real estate but you need to assess the larger picture before you focus on a single unit or property.

You also need to know if the building meets the requirements of Fannie Mae and Freddie Mac—the biggest players in the mortgage market. Fannie and Freddie have changing their lending rules to make sure loans they back are domiciled in buildings that are able to pay their bills. They want to know there are enough owners with current association accounts to pay for maintenance and operations on an on-going basis.

Under the new regulations, Fannie Mae and Freddie Mac will reject mortgages for units in a condo if more than 15 percent of the owners are delinquent in their association fees. In addition, those agencies will guarantee mortgages in new or newly converted condo buildings only if at least 70 percent of the units are sold or under contract.

Under these new rules, it will be more difficult to obtain a mortgage in or sell if you own a unit in a non-qualifying condominium. This creates two situations.

- Pricing will usually more more attractive if you have a source for mortgage financing or you do not need a mortgage. This can create some attractive real estate buys so long as you have financing and understand the risks involved.

- The Fannie Mae requirements also make units at the shore, in buildings with a high percentage of sold units and current accounts, more attractive. The advantages of owning property in this type of building are obvious.

Realtors like Ocean Property Realty who know the community and the local market can be very helpful in these situations. They know where you will find property that meets your needs and interests. They can also help you find property that meets these new requirements for financing with Fannie Mae and Freddie Mac. Call TODAY to discuss on-going changes in the market, and both the opportunities and the problems they create (729-3200).

 


Rendering of proposed streetscape
improvements to downtown Pacific Avenue



Condotel units in the Wildwoods may be an
attractive investment as families stay closer
to home for their vacations during challenging
economic times.

 
   
 
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