2007 Market summary

Sub-prime loans, housing bubble, mortgage crisis?!? I can’t turn on the TV or read the newspaper without seeing all of the media hype. So, what’s the deal? Is it really that bad? Well, in some areas of the US, yes it may be. However Sea Isle City is not the same as the overall US Real Estate Economy. In fact, it’s not even the same as our neighboring shore communities. So forget the media hype, let’s look at how Sea Isle has performed over the past 3 years in the changing market and how our values stand today.

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

#of units sold per square mile:

*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.

Snow on the beach video #2

This video was taken just after sunrise. Turn your volume up!

Snow on the beach video

This video was taken just before the sun came up. Turn your volume up!

Sea Isle Zoning Changes

Zoning change would increase residential units atop businesses

Published: Friday, December 7, 2007

SEA ISLE CITY - City Council is considering changing zoning rules to allow more residences above stores, an effort mirrored in other shore communities to entice businesses to stay in business.
Sea Isle City's proposed ordinance would allow businesses in commercial districts to rebuild their properties with one residential unit per 1,250 feet of lot area on the property.

This could allow four to five residences above a business. Currently, only one is allowed.

City officials said they're considering the changes in an attempt to keep business districts intact and keep business owners away from developing their properties as residential only.

Apart from offering the incentive of extra houses, the proposed ordinance would prohibit new single and double family dwellings in business districts.

"We've been losing our business community," City Councilman Michael McHale said. "We sat down with our business community about what can we do … We sat down and came up with a consensus on what is best for the town."

"The first floor (should) stay commercial, that's the most important," he said.

Although the proposal, which faces a public hearing later this month, has strong support, not everybody is convinced the added density is what the city needs.

Councilman William Kehner said he questioned the density that would apply to business districts that are outside the downtown district in the heart of the city.

A 5,000 square-foot lot can have four residential units above the store.
"I myself feel that's a little too dense for the whole business community," he said.

"I'm not going to fight it at this time, because we need to give some kind of shot in the arm to the businesses to assist them. I'm hoping that it's in the right area and doesn't get out of hand in the other areas," he said.

Kehner said he would wait for the public hearing and for feedback from the city's Planning Board before making up his mind.

Sea Isle City's proposed ordinance also changes the fees for a capital-improvement fund for parking.
Properties that do not meet parking requirements but receive a variance must pay $20,000 per parking space to a city fund to purchase alternate parking. This payment is currently $1,500.

Stone Harbor and Ocean City are pursuing somewhat similar approaches to residential units above storefronts. In November, Ocean City passed an ordinance that allows as many as two duplex condominiums above shops and restaurants downtown on 30-foot lots.

Stone Harbor introduced a controversial ordinance last month that would create a waterfront district allowing two residential units above a business in the district. That ordinance also faces a public hearing this month.

Dustin Laricks, vice president of Laricks Real Estate on Landis Avenue in downtown Sea Isle City, said he feels the zoning changes will promote the rehabilitation of Sea Isle City business districts.

"It's going to improve the downtown area, all the business districts in my opinion, because the commercial storefronts can't generate enough income to support the value of the land or to support the cost of new construction if you want to update," he said. "The bulk of the money is in residential."