Total # of units sold -- 2005 -- 2006 -- 2007 --- Total Square Miles
Sea Isle City ---------258 --- 162 ---- 230 ---- 2.2 sq. miles
Ocean City ------------- 1230 -- 668 ---- 672 ---- 6.92 sq. miles
Avalon ------------------ 292 --- 158 ----- 169 ----- 5.59 sq. miles
*Based on CMC MLS and SJRSMLS statistics
The total number of units sold indicates a great recovery since the height of the market in 2005 and a little more overall consistency in Sea Isle. In fact, there were only 28 more units sold in 2005 then 2007. What does that mean as an owner? Most importantly, it means that your property is still liquid in Sea Isle. If you want to sell your property, you can.
Let’s look at condo values over the past three years:
Average Condo Sale Price --- 2005 -------- 2006 --------- 2007
Sea Isle City -------------- $804,380 -- $692,138 -- $743,595
Ocean City ---------------- $767,611 -- $571,865 -- $556,700
*Based on CMC MLS and SJRSMLS statistics
The average condo sale price also indicates a recovery and overall consistency. In 2006 the average condo sale price dropped 14% from 2005. Why? Because of the media hype. In 2006, all of my buyers were looking for foreclosures and distress sales. As a result, fewer properties sold forcing owners to adjust their prices and negotiate more.
2007 was a great recovery year in Sea Isle. By the end of this year, the average condo sale price will only be down 7.5% from the peak in 2005. Why? Because the distress sales and foreclosures didn’t happen. The families who bought property in Sea Isle over the past 5-10 years were not sub-prime, risky borrowers. They were strong borrowers with good credit, good income and an understanding of what they could afford. At the same time, the demand remained high. Who wouldn’t want a vacation house in Sea Isle City? After all, Sea Isle is where the best family memories are made in the world! The results were more houses began to sell, inventory began to fall and the average condo sale price began to recover.
Compare the average condo sale price in Sea Isle vs. Ocean City. In 2006 the average condo sale price in OC dropped 25.5%, then another 2% in 2007. That’s 27.5% lower today then the peak of the market. Why? Not because there were risky borrowers in Ocean City, but because of the quality of the product. Simply put, side-by-side townhouses in Sea Isle are far superior to the top and bottom style duplexes common in Ocean City. In addition, Ocean City is much larger than Sea Isle but has smaller building lots than Sea Isle. This results in a much higher inventory. Sea Isle’s small size not only keeps the inventory low, but also allows for every property on the island to be within walking distance to the beach. There’s not a bad location on the island! All of these factors create a higher demand in Sea Isle and result in a greater recovery and overall consistency.
*It should be noted that these statistics are based on condo/townhouses because that is the majority of Sea Isle’s inventory.
Another stabilizing factor in Sea Isle’s market is the rental demand. Compared to many other islands, Sea Isle has the highest demand for family rentals per unit. This has played a big role in supporting our property values because owners and developers can depend on rental income to offset some of the costs.
What does the future hold? As I often say, no one has a crystal ball. However, the combination of these factors should result in stable property values. I don’t think that we will see the extreme appreciation rates that we did from 2000-2005 in the near future, but Sea Isle Real Estate should go back to being a conservative investment.
Market stability, high-quality townhouses, a great family atmosphere and a short walk to the beach makes Sea Isle the best investment at the shore.
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