Posts Tagged ‘New Jersey real estate blog’

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Use Us, But Don’t Use Us

Monday, January 31st, 2011

Can’t figure out the title?  Let me explain.

It usually starts with a phone call.  “I have a property at xxx Atlantic Avenue that I’m looking to sell.”  That always gets my immediate attention.  Oh boy, a listing!

“Would you like to list the property?”, I ask in anticipation.

“Well, no, I don’t want to list it with a realtor,” he’ll say, “I’m calling all the realtors on the island to let them know I’ll pay a three percent commission to anyone who brings me a buyer.”

I slump in my seat, the hair standing up on my back.  I’m pissed.

“Are you saying that you are NOT going to list with a local realtor?”, I shoot back.  I’ve have this same type phone call a dozen times a year so I go right on the offensive.

“No, but let me tell you all about my property in case you have a buyer.”

“Don’t bother,” I retort.  “In a couple days I won’t even remember your name or the property address.  List it with a local realtor – it doesn’t have to be us – and your property will get the attention it deserves.”

“No, I’m going to sell it myself.  I don’t need a realtor,” he says.  Of course if he doesn’t need a realtor, why is he calling all of us?  Answer – he thinks he can entice some realtor to help him save half the commission expense.

“Well, good luck,” I say in a pleasant voice.  “If you decide to list the property, consider Jewell Real Estate Agency.”  Then I hang up.

I sit at my desk and hope the other realtors on our island understand the implications of helping this guy out.  We are cheating one of our colleagues out of a three percent commission – usually about $10,000 – by going along with this guy’s scheme.  Times haven’t been tough enough on agencies that we should help cut each other’s throats?

And so I say to prospective sellers:  Feel free to use us as realtors, but don’t use us to achieve your ends while depriving realtors of their fair commission.  We’re professionals.  We work hard at our craft.  We’re constantly educating ourselves.

Treat us in our business as you’d expect us to treat you in yours.  Is that too much to ask?

- Mountain Man

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Our 10th Anniversary

Sunday, January 30th, 2011

Looking back at our beginnings on January 29, 2001, it seems like such a long time ago.  We opened our Wildwood Crest real estate office that day.  We didn’t know what to expect.  We had no idea if our “Modern Technology, Old-Fashioned Service” philosophy would work.  Would people even care?  Could we compete with the chain franchises in a decidedly down market?

Well, Jewell Real Estate Agency was a success right away.  The combination of the local vacation home real estate market taking off in 2001 and people really appreciating the personal service of a mom-and-pop realty company was a hit.  We doubled our anticipated sales earnings the first year and by 2005 City Girl herself sold $27 million worth of real estate properties. 

Our laid back demeanor and knowledge of the market, land use, zoning, and latest trends gave us a very loyal client base.  Because we so enjoy meeting people and establishing lasting relationships, we lived up to our motto “…Where you’re more than a customer, you’re a friend”.

Then the hard times hit.  In 2006, it was like turning off a water spicket.  Our entire vacation home market went from very busy to totally dead.  The phones stopped ringing at our agency and every agency in the Wildwoods.  What just happened?

While local real estate agencies began to go out of business, close satellite offices, or shrink their staffs, we adopted a business plan to keep our advertising at the 2005 levels.  Perception is everything in our business and we had to maintain our presence.  Our plan was sound and we survived the devastating years of 2006 through 2009.  Additional  keys were undoubtably our continuing to answer our phones 6am to 9pm, 365 days a year and our popular newsletter, composed by Mountain Man (a retired writer) and published six times a year.  We mail out about 5,000 a month, plus over 900 are sent free by email to subscribers.

In 2010, the real estate market turned around.  Folks who had been sitting on the sidelines the past four years seemed to lose their apprehension, much of it induced and prolonged by the media.  They figured that they had survived the recession and now it was time to live out their dream to own a second home.  Prices were about 40% less than the highs of 2005 and interest rates were under 5%, giving added incentive.

Now, in 2011, with buyer traffic like we haven’t seen since 2001, we are expanding our Wildwood Crest office.  We are currently hiring sales agents, enlarging our rental department, and have opened a cleaning company – all housed in the building next door that we’ve purchased.

With 10 years under our belts, we look forward to the next 10 years.  We’re excited.  That’s living the American dream!

- Mountain Man 

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$201,343,605

Friday, January 14th, 2011

Catchy title, huh? 

So what does $201,343,605 mean?  Unfortunately, it’s not how much money we won in the MegaMillions or Powerball lotteries.  It’s not our national debt, it’s not New Jersey’s budget deficit.

It is the total value of all properties sold in the Wildwoods in 2010 by realtors belonging to the Cape May County Association of Realtors.  That amount includes sales in Wildwood, North Wildwood, West Wildwood, Wildwood Crest, and Diamond Beach.  Just think, $200 million changed hands.  Dreams were realized for some, while broken dreams were a reality for others.  For others, it was business as usual.

In all, 673 properties changed ownership.  Let’s break down the numbers:

148 single family homes sold at an average price of $338,950 and were on the market an average of 242 days. 

14 lots sold at an average of $216,817 and were on the market for 243 days average.

15 commercial properties sold for an average of $386,500 after being on the market an average 323 days.

38 multi-family properties sold for an average of $253,318 and were on the market an average of 234 days.

Now the big one.  458 condos and townhomes sold for a total of $137 million plus, with the average price $301,173 after 245 days on the market.

To summarize, 673 properties sold in 2010, or slightly less than two every day of the year.  They were on the market about eight months.  And condos and single family homes averaged over $300,000 apiece.  That’s not bad, and after the market conditions we saw in 2006-2009, it’s quite encouraging. 

As you no doubt noticed, the media finally acknowledged – or most of them did – that the real estate market was making a comeback in 2010.  Here at Jewell Real Estate Agency, our sales were up 205% as compared to 2009.  And guess what.  We have set our goal at again doubling our business in 2011  compared to 2010.  A bold prediction, sure, but we can do it!  The numbers don’t lie.

- Mountain Man

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Optimism on the Horizon, Part II

Thursday, January 13th, 2011

Back on December 18, 2010, about 3 1/2 weeks ago, we wrote on this blogsite about our optimistic outlook on the local vacation home real estate market here at the shore in Cape May County, New Jersey.  We talked about expanding our business, but purposely left you in the dark about how it would be accomplished. 

Well, here it is.

We have a signed agreement to purchase the property next door.  A former upscale home decor business, the owners were forced to close their lucrative business due to health issues.  They listed the 100′x60′ property for sale with us, Jewell Real Estate Agency.  The building has about 1,900 square feet on both the first and second floors, plus a third floor for storage.  There are also eight parking spots in the asphalt parking lot, a valuable asset in the busy summertime.

The first floor of the new building will house four full-time real estate sales agents, plus our rental department.  There is also a stockroom with a separate outside rear entrance that will accommodate our cleaning company, Timber Lane Cleaning Service.  The second floor will undergo a makeover next year that will see the two bedroom apartment transformed with the carpet replaced by hardwood floors and the vintage 1980 wallpaper steamed off and replaced with a more modern look.  Then we’ll have room for four more desks for agents, plus a large conference room and full kitchen.

Our current building, a cramped 800 square feet, will continue as the offices for City Girl and Mountain Man – the two broker/owners – and our secretary and right-hand woman, Chris.  With just three of us in the building, we’ll no longer feel squeezed into a small space.  Adding our 50′x60′ property into the mix, we will have 150′ frontage on the main thorofare through the Wildwoods – New Jersey Avenue – with ample parking.  Our current concrete driveway will be utilized as a deck, hosting two outdoor tables with colorful beach-themed umbrellas and chairs.  We will also have an information kiosk there, loaded with maps and pamphlets about local tourist attractions.  The landscaping will feature plenty of flowers and color.

We’re excited.  You should be, too, because when a realtor expands their business capacity, it means good times are right around the corner.  As we’ve said before, the real estate market was the first to collapse in 2006 and it’s leading the resurgence in 2011.  Isn’t that great news?!!!

- Mountain Man

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Mortgage Interest Deductions

Wednesday, December 29th, 2010

It has always been a given in our lifetimes that there is great value in home ownership.  It’s a concept in which we heartily agree.

Recently, there has been a small voice in Americana that is extolling the virtues of renting a home rather than owning.  Poppycock!  Perhaps it is a reaction to the government’s threat of revoking the mortgage interest deduction (MID) that makes home ownership less attractive.  That is an ill-conceived idea and it will definitely stall the real estate market just as it’s poised for a recovery.

Let’s look at the MID.  The average 35-45 year old gets a $13,829 deduction off their gross income.  Ages 45-55 get $12,374 deducted, and 55-65 write off $11,099.  The reason it drops with time, obviously, is because at the beginning of a mortgage the principal is a smaller amount of each payment.  Farther into the loan, the interest becomes smaller as the principal increases.  Keep in mind, the amounts mentioned are NOT how much less they pay in taxes, just how much is deducted from their gross income.

The “let’s rent” folks are ignoring several facts.  Renters, by and large, do not exhibit the pride in ownership that results in nice landscaping, replacement of shrubs and pruning of trees, and minor repairs to broken fixtures, windows, etc.  “It’s not mine” is their mentality, and it shows.  There are exceptions, but for the most part their properties are not as well kept as a homeowners.  Folks who own also tend to be more involved in their community and schools.  I can go on and on.

If the MID is revoked, it’s a clear sign that the government has an interest in hamstringing the U.S. economy.  There can’t be any other reason.  Let’s hope that’s not the case!

- Mountain Man

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Optimism on the Horizon

Saturday, December 18th, 2010

We are what we think we are.

That’s a bit profound, but definitely true. 

That’s why depressed people are depressed and chronically sick people are chronically sick.  It’s also why lively people are lively and upbeat people are upbeat.  It’s mind over matter.  It’s the vibes you put out to the universe that steer your mindset.

The same holds true for the recession of the late 2000 decade.  People who go around moping about how bad things are typically find that things remain bad for them longer.  While they whine about the economy, jobs, real estate, the stock market, etc, others are going out and making a good living and seizing the opportunities at hand.  Insightful folks, those with vision, aren’t complaining about the present but instead are setting themselves up for a prosperous future.  It’s that simple.

Since City Girl and I are realtors, let me run through the real estate gauntlet.  When the Cape May County, New Jersey shore vacation home  real estate market went south in 2006, many realtors went into a funk.  Not all, but many.  They were all doom and gloom and that attitude prevailed in their offices.  They sat around and played cards all day, bemoaning the fact that the phones weren’t ringing and no prospective customers were walking through the door.  In the next four years, many offices closed up shop and the ranks of licensed realtors in the county board shrunk by one-third.

Meanwhile, Jewell Real Estate Agency took a different approach.  We saw it as a break from doing so many real estate deals and an opportunity to focus on the future and to tweak our operation.  In the boom years of 2002 through 2005, we didn’t have a chance to step back and analyze our business.  The money was flowing so we were content.  Our inward look began by us realizing that we couldn’t cut back on advertising.  In the hard times you have to maintain your presence.  The offices that cut back or even cut out advertising were amongst the first to go belly-up.

By mid-2008, we decided to expand by adding a second floor to our Wildwood Crest office.  We were positioning ourselves to be ready for the next boom.  It wasn’t until the final day of 2009 that we received our final approvals to go forward with the construction.  The winter of 2010 delayed us further and it wasn’t until late in the summer that the complicated concrete footing and block work was completed.  A busy autumn, with a renewed flush of real estate sales and prospective buyers gave us the same feeling we got in 2001 – the local real estate market was coming back.

Buoyed by the surge in activity and our own optimistic outlook on real estate and life, we decided to undergo a full-fledged business expansion.  The time was right.  We would catch the real estate wave while it was still far from shore rather than wait for the wave to nearly break at the beach.  Too many folks jumped into real estate near the end of the 2002-2005 boom and missed the ride to the top.  They crashed and burned.  

We would take our philosophy of personal attention and unbridled integrity and select a few top-notch local agents to join our real estate family.  We would offer four desks for sales agents, two for rental agents, plus house our new Timber Lane Cleaning Service and its 10 employees.

So how are we expanding without completing the construction of our second floor?  Stay tuned.  The answer comes in a couple days.

- Mountain Man

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The Vacation Home Real Estate Market is back!

Monday, December 13th, 2010

Go ahead and snicker.  This Mountain Man guy is full of bull, you’re thinking. 

Not so fast, my friend.

Sure, the national unemployment numbers are still tough to swallow.  And yes, we are still seeing more vacant store fronts popping up.  Discretionary spending is off, too, though you have to wonder when you see folks descend on a mall and drop hundreds of dollars on trivial junk for Christmas.

But here in Cape May County, New Jersey at the shore, the tide has turned in the real estate market.  Pun intended.  With interest rates hovering around 4% and prices nearly half of what they were in 2005, sales have been brisk.  We’re also seeing that folks are tired of sitting on the sidelines and after five years they ackowledge the opportunity is there to finally purchase and own a vacation home at the Jersey Shore.  If they were 55 years old back in 2005, they’re now 60 and not getting any younger.  I call it the “now or never” syndrome.  If they waited much longer to buy a second home, some would probably just say forget it.

Back in 2004, we began telling our clients that the days of buying pre-construction condos, then flipping them a year later the day after closing, were over.  We saw an overabundance of new construction and sensed that the market was shifting.  Unfortunately, we were right.  We are getting that same feeling again, except this time it’s a turn in the other direction. 

 

We believe that the vacation home market leads the way.  Our real estate market was the first to fall apart, and it is the first to recover.  And why not?  Folks who can afford second homes usually own their own business or they are high enough up on the corporate ladder to have a solid income.  When the national media began their gloom and doom predictions, the frugal upper and upper-middle class folks pulled back and stopped spending.  Now that they’ve endured five years of a recession and the sky hasn’t fallen in, they’re back.

Here at Jewell Real Estate Agency, we have sold 2.5 times more properties this year than in 2009.  We’re not bleeding greenbacks anymore.  Not only are we relieved, we’re very optimistic.  No doubt, it will take the primary home market another two years to catch fire.  But when it does, all will be well in Whoville.

- Mountain Man

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‘Tis the Season to write Blogs

Thursday, December 9th, 2010

With winter firmly entrenched here in South Jersey, it’s time to focus on writing articles for this blogsite.  As you may have noticed the past two years, we make many additions to this blogsite December through March, but with the warm weather comes other more-pressing responsibilities.

This past year, our thoughts in the warm months turned to many other diversions.  First up was The Free Meal Center, Cape May County’s first-ever daily soup kitchen.  We formed a non-profit organization on January 25, 2010 and took possession of the 4,275 square foot building situated on 2.38 acres on March 15th.  We spent the next eight months gutting the interior and improving the grounds and exterior of the building, thanks to the hundreds of dedicated volunteers who pitched in to make it a reality.  We received our building permit the day before Thanksgiving and now the renovations can proceed.

We also began the second story addition to our real estate office in Wildwood Crest.  The complicated footing is now in place, with a three-foot concrete block foundation above.  When the warm weather returns, we’ll begin building skyward.

We also began site work on our restaurant/sports bar in Green Bank, West Virginia.  We purchased the seven-acre bottom land on July 1st.  The beautiful property has 750-foot frontage on Routes 28 & 92 and 1,050 feet along Deer Creek, a 50-foot wide river that takes water from the Allegheny Mountains to the Greenbrier River.  The site work is just about done and the riverfront has been transformed into a beautiful setting. 

As you can see, we keep ourselves pretty busy.  And so, you’ll excuse us if we only find the time to relax and write blog posts in the winter.  Sit back and enjoy the next four months of opinions and observations on real estate and life in general.

- Mountain Man

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Lower Township’s Revaluation

Friday, February 19th, 2010

Sometimes a municipality in New Jersey actually shows foresight and at the same time saves itself a lot of money.  Such is the case recently in Lower Township, Cape May County.

The township completed a full-blown revaluation in 2007, raising the total value of all properties from $1.5 billion to $4.73 billion.  While the new figure was more in line with reality, it came at the time when the real estate market was in a deadfall.  Property values were dropping about a half percent per month.

A petition signed by 1,500 property owners against the new valuations put the township on notice to expect plenty of costly tax appeals.  It would also cause an imbalance in values, since those folks out of a total of 15,930 property owners in the town that didn’t bother to appeal would unfairly be picking up the new burden.

Township Tax Assessor Art Amonette undertook an in-house reval in 2009, which cost just $25,000 instead of the $1 million price tag associated with a full reval.  Smart thinking, big savings!

The completed revaluation shows that the value of the township did indeed decline, from the previous $4.73 billion down to $4.1 billion, a drop of about 15%.  About 15,500 properties had their values reduced, while another 400 saw increases.

The range of change had some properties dropping 30%, as opposed to a high of a 10% increase.  Anyone who’s value dropped more than 15% will see a lower tax bill.  A reduction less than 15% will see the owner’s tax bill increase accordingly.

So once again, the playing field appears to be leveled for Lower Township property owners.  Town officials being proactive was a wise decision all around.

- Mountain Man and City Girl    http://www.MountainManandCityGirl.com

The blogsite of Jewell Real Estate Agency, Wildwood Crest, NJ    http://www.JewellRealEstateAgency.com

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Our Real Estate Market

Friday, January 29th, 2010

We realtors can talk all we want about our local real estate market, but there’s nothing like good, hard numbers to bring out the true picture.  So here are the numbers for the Cape May County, New Jersey market since 2005.  These statistics are for properties sold through our local Multiple Listing Service and don’t include private sales.  They also don’t include Ocean City, which belongs to the Atlantic County Association of Realtors and MLS.

In 2005, there were 3,628 properties sold.  The asking price total was $2.01 billion and they got $1.92 billion, meaning sellers got 95.5% of asking price on average.  The average property was listed at $555,000 and it sold for $530,000.  (All prices are rounded off).

In 2006, there were 2,386 properties sold, a volume drop of 34% from 2005.  The total asking price was $1.43 billion and sellers received $1.34 billion, or about 94% of asking price.  The average asking price was $601,000 and the selling price averaged $563,000.  Did you just notice that the 2006 price average was up 6% over 2005?

In 2007, there were 2,279 properties sold, a slight drop of 4% from 2006.  The asking price total was $1.33 billion and sellers received $1.28 billion.  The average asking price was $583,000 and sellers averaged $539,000.  So even in 2007, prices were still higher than in the benchmark year of 2005.  Of course, sales were off 37% in volume in 2007 from 2005.

In 2008, there were 1,901 properties sold, a drop of 16.5% from the previous year.  The total asking price was $1.07 billion and they got $978 million, or about 91% of asking price.  The average property listed at $564,000 and sold for $514,000, which is still in the ballpark of 2005.

In 2009, there were 1,879 properties sold, a 48% drop from the gold rush era of 2005, but still close to 2008 totals.  But here’s where the numbers dive.  The total asking price was $889 million and sellers received $813 million.  The average listing price of $473,000 went for $432,000.  Selling prices dropped 16% from 2008.  That’s substantial.  Hopefully the market found the bottom and will now level off.  Short sales were a big part of 2009, driving down price averages.

Here at Jewell Real Estate Agency, our figures for sales and commissions from 2001 to 2009 tell our story.  Our most sales, in order, were 2002, 2004, 2005 and 2003.  Those four years had double – and sometimes triple – the sales volume of 2001, and 2006 through 2009.  Our best year of gross commissions was 2005 (no surprise there), followed by 2004, 2002, and 2003.  Again, 2001 (our first year in business, so it might not be a fair comparison) and 2006 through 2009 were the dog years. 

We do expect 2010 to be our best year since 2005.  In January, we’ve already had 25% as many transactions closing as in all of 2009.  And the phones are ringing and the offers are coming in.  Yeee-haaa!

- Mountain Man and City Girl    http://www.MountainManandCityGirl.com

The blogsite of Jewell Real Estate Agency, Wildwood Crest, NJ    http://www.JewellRealEstateAgency.com

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Walking Away from a Mortgage

Thursday, January 21st, 2010

The family’s decision to allow their house to go into foreclosure isn’t an easy one.  But often there is no choice.  The loss of a job by one of the spouses can cripple their finances.  Even having a significant cutback in salary, such as being dropped from a full-time to part-time employee, can be enough to throw a household budget into a tailspin.

Until the past year or so, a family could rescue themselves by taking an equity line on their house, or even write a credit card check to bolster their checking  account and get them through the tough times.  But too many Americans have now found themselves cut off from being extended credit through these means.  Banks are taking the hard line, even if one’s credit score is still hovering around 800 and payments are always on time.

In 2009, there were over 2.8 million foreclosures filed in the United States.  It’s a sad statistic that puts a damper on many families’ American dream of home ownership.  Is owning a home and then losing it worse than never having owned one?

But there is one facet of these foreclosures that is particularly upsetting.  About one-fourth of last year’s foreclosures were not  because the mortgage payments couldn’t be afforded, but instead because families decided the mortgage payment simply wasn’t worth paying.  It’s called a strategic default.

Suppose a family owns a home they bought in 2004 for $450,000 with no money down.  Their mortgage payment is nearly $3,000 a month, plus PMI and real estate taxes ($500 a month average here in New Jersey).  Add in minimal upkeep and necessary repairs and it’s costing about $4,500 a month.

If a family can handle that $4,500 but has nothing left at the end of the month, they begin to wonder if it’s worth the hassle.  Especially because the house is now only worth $315,000, using the typical decline of 30% in value in the US.  When that family crunches the numbers and compares paying $1,200 to $1,500 a month to rent a similar home, many opt to take that route.

So, despite the fact that their credit will be ruined and the pleasures and comforts of home ownership will disappear, they decide to walk away from their home.  They stop making the mortgage payments – which gives them six months or so with no $4,500 payment (saving $27,000) - and prepare for life as a renter.

It’s a sad scenario.  But for many, a reality.

Mountain Man and City Girl    http://www.MountainManandCityGirl.com

The blogsite of Jewell Real Estate Agency, Wildwood Crest, NJ    http://www.JewellRealEstateAgency.com

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The Little Town That Could

Monday, January 11th, 2010

The Borough of Woodbine is located in the northwest corner of Cape May County, in southern New Jersey.  Situated in the Pinelands National Reserve, Woodbine is physically located about 20 miles from the very affluent beachfront communities of Avalon and Stone Harbor and 30 miles from trendy, historic Cape May.  But in perception, they are a million miles apart.

Woodbine shouldn’t be underestimated.  It’s the hidden gem of the county.  And continually preparing itself for future prosperity.

The rural, wooded town of 2,700 folks boasts an airport, a museum, the largest employer in the county, plenty of industry, an elementary school, recreation commission, volunteer fire department, and Belleplain State Park.

The 700-acre airport – one of only three in the county – is part of the 1,216-acre Woodbine Municipal Airport Economic Area.  It employs 27 workers with an annual payroll of two-thirds of a million dollars.  The 50-acre business park has a public sewer system in place in anticipation of future businesses locating there.  An existing rail line opens more possibilities.  A new golf course proposed by a private developer on the remaining land was scuttled when a glut of new golf courses in the county made it financially impractical.

Being one of only five towns in the 1.1 million acre Pinelands to receive the coveted Town designation, Woodbine is able to offer sewers for residences, plus commercial and industrial businesses.  That makes it attractive to businesses throughout Cape May County looking to relocated to more spacious and less pricey properties.  And the general purpose tax rate hasn’t increased in 19 years.

The little town is experiencing continual improvements.  The Sam Azeez Museum of Woodbine Heritage recently completed a $2 million renovation and voters recently approved a $3.8 million project to upgrade the school, which includes solar panel installation.  At the former landfill, Garden State Ethanol is in the permit process which will lead to building a 25-million gallon a year plant that will convert algae to ethanol.

The town owes much of its success and progress to Mayor William Pikolycky, who’s been in office for a couple decades.  Last year alone he garnered $4.2 million in grants for Woodbine.  In the past he has gotten bike trails and walking trails funded and built, and made many infrastructure improvements to the vibrant, multi-ethnic community.

So while many local communities march on as well-to-do seashore tourist locales, little Woodbine chugs along with an eye to the future.  It truly is the Little Engine That Could.

- Mountain Man and City Girl

http://www.MountainManandCityGirl.com

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New Jersey Entices Solar

Tuesday, January 5th, 2010

New Jersey has the reputation of being one of the most business-unfriendly of the 50 United States.  It’s well deserved.  They did it the old-fashioned way – they earned it!

But solar power is the exception.  New Jersey is mandated by the state’s Energy Master Plan to provide 20 percent of its energy through renewable sources by 2020.  To reach that lofty goal just 10 years away, the state is offering monetary incentives to get it done.  And alternative energy providers are lining up to cash in.

The state set up a system whereby solar systems – whether at a private residence or a commercial site – can earn Solar Renewable Energy Certificates.  Each 1,000 kilowatt hours of energy produced earns the provider one credit.  These credits are currently selling for just under $700 apiece.

The buyers of these energy credits are the utility companies, which are the ones under the gun to supply 20 percent renewable energy.  If a utility doesn’t meet the 2020 goal, they will be penalized with a Solar Alternative Compliance Payment.  So if they’re going to shell out the bucks anyway, why not go solar?  It’s good public relations and reduces dependency on coal, oil, etc and their associated price fluctuations.

There are currently over 50 renewable energy projects on the drawing board in New Jersey.  As more farmers and large landholders become aware of this new income source, more and more projects will be planned in the Garden State.  The key is for the solar farm to be located near high transmission lines, which makes getting the electricity they produce easier and less costly to get on the grid.  And besides getting paid via the credit system, the providers also get the current rate per kilowatt.  It’s win-win.

There is one caution to anyone thinking about having solar panels installed at their property.  Since this is a fairly new and lucrative business, a lot of inexperienced and unqualified companies are looking to install your solar system.  Like anything, get quotes from at least three companies and ask for references and about projects they have already completed.  Be careful and choose wisely.  After all, this is New Jersey!

- Mountain Man and City Girl

http://www.MountainManandCityGirl.com

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Distressed Properties Affecting Appraisals

Tuesday, January 5th, 2010

There are typically three main issues that can stop a potential real estate transaction dead in its tracks – the home inspection, the mortgage approval, and the appraisal.  Let’s talk about appraisals.

The problem with appraisals in today’s real estate market is that properties sold via a short sale, sheriff sale, or foreclosure are being used as comparables when evaluating the price of a regular home.  About 25% of realtors have had a sale fall apart because of a low appraisal.  The National Association of Home Builders reported that 25% of their new home sales likewise were shot down by low appraisals.

In 2009, over one third of all home sales nationwide were either foreclosures or short sales.  A short sale, of course, is when a lender let’s the property sell for less than the amount of the loan, figuring its better to unload the property quickly, get some cash, and move on.  These properties, on average, are selling for about 25% less than a property not in distress.

In an appraisal, the appraiser uses an approach in determining value by comparing similar recently sold properties in the same area.  Allowances are made for differences, such as more or less bedrooms, a detached garage, swimming pool, etc.  In a normal real estate market, where foreclosures are rare and short sales nearly unheard of, this is an effective method to determine true value.

But in today’s topsy turvy real estate market, appraisals show no differentiation in a distressed sale vs non-distressed sale.  And therein lies the problem.  They are, after all, two different markets.  And so, the family that always paid their mortgage is being penalized because their property is being weighed down by those that didn’t or couldn’t handle their financial responsibilities.  Is that fair?

Buyers attempting to purchase a conventional property nowadays basically have three options when the appraisal comes in under the agreed upon price.  Either make up the difference in cash, get the buyer to lower his price, or do a cash-only deal (using a home equity if necessary).

Until the real estate world returns to normal, “appraisal” will continue to be a four-letter word to realtors, builders, buyers, and sellers.  Let’s hope the end is near.

- Mountain Man and City Girl

http://www.MountainManandCityGirl.com

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No Repeat of Bubble Burst?

Monday, January 4th, 2010

As the United States slowly pulls itself out of the depths of the recession, many still wonder how it happened and whether it can happen again?  Good questions, and the answers all have to do in some way with real estate.

The biggest cause of the housing bubble was that the Federal Reserve and then chairman Alan Greenspan did not recognize what was happening soon enough.  But they took the course that seemed logical at the time and, after all, hindsight is 20-20. 

On the heels of the September 11 attacks, the Wall Street scandals, and the 2001 recession, the Fed felt that low interest rates were needed to get the economy rolling and to create jobs. And it did.  However, housing prices started to escalate at the same time and by 2003 they took off.  Here in Cape May County, New Jersey housing prices were rising 3% per month in 2004 and part of 2005.  That lasted for a year and a half as speculators bought everything in sight at interest rates in the 5 to 6 1/2% range.

The prices kept rising during that period because, let’s face it, few thought that they would stop going up.  Lenders and appraisers bought into the same scenario, so everyone just kept doing business as usual and moving the market along.  Folks got mortgages based on real estate values continuing to rise.  When they stagnated, then dropped, many got caught with their pants down.

Now as Ben Bernanke is up for his second term as Fed chief, the focus seems to be not so much on simply more regulations, but on more effective and smarter regulations to keep from another period of real estate speculation.  Through recent experience, the decision-makers are hopefully aware and prepared the next time that our economic freight train is in danger of running away.

Interest rates are still near historic lows and expected to stay that way, at least in the short term.  That has to be balanced with the threat of inflation, which would result in another possible recession.  We’ll have to see what the future holds.  We’ve got our fingers crossed.

- Mountain Man and City Girl

http://www.MountainManandCityGirl.com

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New Year’s Resolutions

Thursday, December 31st, 2009

I’m not really the type of guy to make New Year’s resolutions.  I guess it’s because I’ve pretty much always been in control of my life.  Okay, so I always want to lose weight and I guess that is the one resolution that I might think about each December.  But it probably has more to do with the overeating I enjoy from Thanksgiving through January 1st and it’s just a coincidence of calendar.

But, what the heck.  Let me see if I can’t take a few things that bother me and turn them into New Year’s resolutions.

I vow to pay no attention to the Nostradamus prophecy of the end of the world on December 21, 2012.  Give me a break.  There’s no way some dude in 1555 could predict the end of civilization.  As the stoned-out hippies used to say, “Far out, I see it, too.”  Nostradamus will get the attention equal to Y2K, and fail as miserably.

I vow not to mumble under my breath when I see a woman covered in tattoos.  Sure, I think it’s degrading, even belittling.  But I’ll keep my mouth shut.

I vow not to make fun of religion.  So what if it is a continuance of primitive pagan rituals that fly in the face of science.  So what if religion has been the basis of wars and murder for many millineum, and still is to this day.  I’ll just consider it population control.

I vow not to complain when a bunch of brats are screaming in a store, “I want that!” and the mother exerts no control, no authority.  She’s probably dumber than them, anyway.

I vow not to get upset when the driver in front of me turns without signalling.  Or hogs the passing lane while going 5 mph under the speed limit.  I’ll just keep driving my beat-up truck that subtly says, “I don’t care, I’ll ram you.”

I vow not to get pissed off when I see a dog tied up to a chain out in the pouring rain with no cover, no food, no hope.  Maybe the dog was Idi Amin in its last life and deserves it.

I vow not to speak badly about ALL politicians and our corrupt government system.  There must be one politician out there with the ethics of Gandhi.

And lastly, I vow to not take seriously any of these stupid New Year’s resolutions.  If I can’t bitch and complain and grumble, what do I have to look forward to in 2010?

- Mountain Man

http://www.MountainManandCityGirl.com

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Just a Feeling

Wednesday, December 30th, 2009

As realtors, we often get hunches about our own individual local real estate market, whether it’s Monterrey, California or Baton Rouge, Louisiana or Bangor, Maine. 

Here at Jewell Real Estate Agency, we have a feeling about 2010.  A strong feeling.  All the pieces seem to be falling into place that 2010 is going to be a great year.  The best since 2005.

Our local real estate market is Cape May County, a small tourist-oriented county at the very southern tip of New Jersey.  While we have just 96,000 yearround residents, the summer population swells to 750,000 or more on any given day.  Our beautiful Atlantic Ocean beaches and back bays and famous boardwalks attract vacationers from Philadelphia and eastern Pennsylvania; New York City and the surrounding areas of northern New Jersey, southwestern Connecticut, and New York state; plus some fun-seekers from Maryland,Washington, DC and eastern Canada.

We almost exclusively sell vacation homes – including condos and townhomes - and multifamily homes, with an occasional commercial property.  We sell a few primary homes each year, mostly off the islands on the mainland.  There just isn’t a great demand.  The seasonality of our location makes us unattractive to yearround living for a young family just getting started.  There just isn’t enough yearround employment to suit their needs, so the younger generation tends to migrate toward the Philadelphia area and its jobs.  The primary homes we do sell are mostly to retirees looking to enjoy the quiet shore life, plus the restaurants, fishing, and attractions of Cape May, the Wildwoods, and even Atlantic City 35 miles to the north.

So back to the countdown to 2010. 

We are already showing properties every day, a phenomenon lacking over Christmas break the last two years.  Joyce wrote two contracts yesterday – both accepted – and we’ve got plenty of showings today and tomorrow, right up to New Year’s Eve.

People seem eager to buy right now.  There’s an enthusiasm amongst prospective buyers that has replaced the overall reluctance evident in 2007 through the first half of 2009.  Maybe it’s the low interest rates or the bargain basement prices of real estate.  Maybe it’s that folks are tired of sitting on the sidelines and putting off buying that American dream second home.  Or perhaps it’s because many in the media have given the green light to purchasing real estate and abandoned their doom and gloom prophecies.

Whatever the reason, we have a bounce in our step and a twinkle in our eyes.  The new year looks very promising.  I think I’ll stick a bottle of champagne under the seat of my truck.  After my last property showing tomorrow afternoon, I think I’ll break out the bubbly and toast the good times ahead.  Wanna join me?

- Mountain Man

http://www.MountainManandCityGirl.com

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There’s Technology, then there’s Tech-NO-logy

Monday, December 28th, 2009

I’m stubborn, I admit it.  I have embraced modern technology, but only as far as needed to be the owner of a successful real estate agency. 

I’ve had a cell phone for 10 years, and now 85% of Americans do too, according to statistics.  Judging from my older friends, I think I personally know many of the 15% who don’t.

I bought my first computer in 1993, just months before launching my own weekly all-sports newspaper.  I didn’t know how to do much, other than type articles into Microsoft Word that I would later cut and paste.  By cut and paste, I mean scissors and wax onto camera-ready full newspaper-size sheets.

I got my first email address in 1999, just prior to opening the main office of Jewell Real Estate Agency.  A year later we purchased three more computers for our new branch office, run by my broker wife Joyce.  While my wife jumped into the computer age with vigor, I still hung around on the outskirts.  She was busy inputting data on our website, local MLS, and many other websites used to sell real estate.  I stuck to writing material and articles into Word, then letting her cut and paste them (yes, computer cut and paste this time) into our various advertising venues.

Now as the “ought decade” comes to a close, I write a blog regularly and I do my research on many topics on the Internet.  Wikipedia is great, and I can read online the newspapers from the many places I’ve lived.  I’ve even abandoned the Weather Channel on TV for Weather Underground on the Internet.  And I can get instant sports scores.  Yee-haa!

But that’s where I draw the line.

I don’t even know what a BlackBerry is, nor an iPod.  I don’t own a DVD player or DVR, and in fact don’t know the difference, if there is one.  I don’t Facebook or Twitter or YouTube or Wii.  Heck, the last video game I played was Pacman on a Commodore 64, circa 1984.

And don’t even think of sending me a text message.  I don’t know how to read one or write one.  The only thing I can do is delete the one you sent me, unopened.  If you have something important to tell me, pick up the phone.  I do answer the phone.

I don’t have a GPS.  I’m a guy.  I use a map, or else I’ll Mapquest first and compare it to my real live map.  Okay, I do have a radar detector in my vehicle.  That baby has saved me a lot of bucks, not to mention points on my license.

While I’m ranting, I don’t have tattoos and I think they’re degrading (spelled S-T-U-P-I-D).  Same with piercings.  I don’t watch reality shows – never.  My TV is never tuned to ABC, CBS, NBC or Fox.  I watch nature shows, movies, and occasionally college sports.  Don’t even think I’d watch the Simpsons or Beavis & Butthead.  I don’t do Pay-Per-View and I don’t download movies or music. 

Also, I’ve never been in a Starbucks.  I don’t have (or need) a life coach.  I think cougars are desperate.  And what’s this thing all the “under 30s” are doing with holding up different fingers?  Does that mean something?

One last thing.  You’ll never see me going around with one of those Mr. Spock things in my ear.  What’s with that?  I own three businesses and I’m a successful author, yet I hardly think I’m so important as to walk around needing 24/7 instant access to my phone. 

Okay, I’m done.  I feel better now. 

You can perhaps see why they call me the Mountain Man.

- Mountain Man

http://www.MountainManandCityGirl.com

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A Good Barometer

Sunday, December 27th, 2009

Here at Jewell Real Estate Agency, we sell mostly vacation homes at the Jersey shore.  Condos, townhomes, single family homes – they are all elements of the dream families have of owning a second home in the Wildwoods.

Being a second home market, our yearly calendar of sales activity is fairly predictable.  By that I mean that just like a school year starts and ends around the same time each year and school vacations are scheduled about the same weeks each year, our business also has regular busy and quiet times.

Our real estate market usually cools off each year about 10 days before Thanksgiving and that semi-hibernation lasts through New Years Day.  That’s a time when local realtors takes cruises and warm weather vacations or work shorter days and cut to a minimum of floor time.  In the past, some real estate agencies even closed from Christmas Eve through January 1st, though not us.

Because that six week period is fairly predictable, any decrease or increase in potential buyer volume is a good barometer of the condition of our local real estate market.  We can gauge fairly accurately what type of year we are about to have by how many email and phone inquiries, plus walk-in traffic, we get during that time period.  It’s sorta like the Groundhog predicting more winter or not, if you get my drift.

Which brings us to this year’s prognostication. 

We were busier than usual leading right up to Thanksgiving Day, then the trend continued right up through Christmas Eve.  The day after Christmas (yesterday), the phone and email inquiries were brisk.  We’ll be juggling property showings all week long.  Hurray!

While perhaps not very scientific, our real estate business indicator is predicting a good 2010.  What more can we ask?

- Mountain Man and City Girl

http://www.MountainManandCityGirl.com

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Atlantic City Gambles on Future

Saturday, December 26th, 2009

Since Atlantic City, New Jersey approved legalized gambling back in the late 1970s, the city has always been in the shadow of Las Vegas.  Everything the tarnished city did to revitalize and rebuild and build a world-class casino atmosphere drew comparisons to Vegas.  And frowns.

Meanwhile, the “Little Engine That Could” plodded on, eventually erecting 13 casinos.  The first, Resorts Atlantic City, opened in May, 1978.  A year later Caesars debuted, then in December 1979 Bally’s opened.  The Sands, Harrahs and the Hilton each opened in the latter half of 1980 and the Playboy Casino and Tropicana were ready for business in late 1981.   Atlantic City now had eight casinos.

 The recession of the early 1980s (sound familiar) halted construction while prospective casino companies sat out the downturn and waited for the economy to get going again.

Trump Plaza got things moving again, opening in May, 1984, then Trump Marina debuted a year later.  The Showboat opened in 1987 and the Trump Taj Mahal in 1990 and then new construction came to a halt.  Time to once again wait for better times.

In 2003, the first modern mega-casino, the Borgata, opened to grand revues and it continues to this day to be the top earner in the city.  The Playboy Club Casino, of course, has long since been closed, then torn down. 

The Sands was torned down in 2007 by Pinnacle Entertainment after purchasing the obsolete casino and its 20 Boardwalk/oceanfront acres for $400 million.  Pinnacle has not begun construction and the company refuses to comment if the $1.5 billion megaresort will ever be built.

Meanwhile, MGM and Boyd Entertainment purchased a 72-acre lot next to the Borgata, envisioning a 3,000 hotel room, 280,000 square foot casino resort to be called the MGM Mirage.  Plans for that project are “on hold” until the economy improves and funding becomes available.

One new Atlantic City hotel casino, the Revel, is about two-thirds through the construction phase.  They broke ground in November, 2007, but in January, 2009 had to lay off 400 workers, leaving 500 to get the steel work and exterior completed.  They need another $1 billion in funding to finish the $2.5 billion project, which is still hopefully scheduled to open in the summer of 2011.  The Revel is 53 stories high, with 1,800 rooms, 20 restaurants, 40 retail stores, and a 5,000-seat theater, plus 150,000 square feet of gambling.

Atlantic City reacted to gambling being legalized in many more states by improving its non-gambling options for visitors.  Shopping opportunities within walking distance of the casinos include the 27-store The Quarter, The Walk with 47 stores, and the Piers at Caesars with over 50 stores.

However, the approval of gambling in Pennsylvania poses a new threat.  The casinos in AC once employed 40,000 people, but that’s now down to 36,000.  Gambling competition also comes from nearby Delaware, New York, and the Indian casinos in Connecticut.

Atlantic City must once again reinvent itself.  The more non-gaming options the better.  The city owns 140-acre Bader Field, a former small airport, just outside of town but practically in the shadow of the casinos.  Maybe a theme park or something similar is the answer.  Whatever, it has to be a FAMILY destination.

If the casinos are to prosper, they must break their long-standing tradition of not supporting anything outside walking distance of their establishments.  Minor league baseball didn’t fly, and pro hockey and basketball were also financial flops.  The casinos must get behind some sort of grand family entertainment at Bader Field.  If not, their market share will continue to drop and Atlantic City, within a four hour drive of 30 million people, will be the punchline of many a joke.

- Mountain Man

http://www.MountainManandCityGirl.com

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