Posts Tagged ‘real estate blog’

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Baby Boomers will be replaced

Saturday, December 12th, 2009

Most people would agree that the real estate market of the last 15 or 20 years has been fueled by the Baby Boomers.  As you know, that’s the 80 million Americans born between 1946 and 1964, and now ages 45 to 63 years old.  They’ve had careers and saved money and invested in real estate, stocks, and retirement plans, amongst other things.

The next generation has been called “Generation X”, originally called the “Baby Bust” due to the low birthrate in America.  They were born from 1965 to 1979, with the latter half mostly children of early Baby Boomers.  They are now 30 to 44 years old, but they are just 48 million strong.  With the average age of a first-time homebuyer pegged about 33 years old, they are filling that niche right now while the Baby Boomers upgrade to add vacation homes or downsize to smaller homes as “empty nesters”.

The next group to arrive was Generation Y, those born between 1980 and 1995.  Now 14 to 29 years olds and children of the latter half of the Baby Boomers and the early Gen X’ers, they will be the next group to arrive on the real estate scene.  The exciting news for the real estate industry and the economy of the United States in general is that there are 74 million of them.  They should eventually have the economic impact equal to that of the Baby Boomers.  Tattoos and piercings and all, this generation will soon enter the first-time homebuyer market and take their place on the economic ladder until they are perhaps 60 years old or so.

As the population demographics shift from one group to another, there will always be a new generation to carry the day.  Isn’t that why we reproduce?

- Mountain Man

http://www.MountainManandCityGirl.com

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A Real Jump-Start

Friday, December 11th, 2009

Nearly a year into the Obama administration I think Americans can see that the No.1 issue in the nation’s mind – the economy – is still sputtering.  Bank bailouts and all that stuff just aren’t working fast enough.

As Mighty Mouse used to say, “Here I come to save the day!”  So here’s my simplistic approach to ending the Recession.

The United States of America has the highest bond rating possible – AAA.  That rating means that the U.S. is not likely to default on debt.  Thanks to the Bretton Woods Accord back in the 1970s, the U.S. dollar is no longer backed by the gold in Fort Knox.  The American dollar – of which there are 829 billion – is backed by the government’s ability to generate revenue to pay down it’s debt.

New dollars are issued when the Federal Reserve elects to fund the purchase of debt, which is usually through U.S. Treasury Bonds.  Done in excess, this can cause inflation, but bear with me.

The net worth of Americans is currently $53.4 trillion.  Prior to the Recession, it was $64.5 trillion.  In other words, we’ve lost 17.2% of our worth.  By the way, $348 billion of our collective $53.4 trillion is household real estate holdings, i.e. your house.

That’s the background, now my proposal.

Let’s give each American household $10,000 tax free.  With 105,480,101 households, that’s $1.05 trillion.

There are 7.7 million businesses in America.  Let’s give them each $100,000 tax free.  That’s a mere $770 billion. 

So add it up and the American government can print and distribute $1.82 trillion.  This isn’t money raised by taxes.  We’re just gonna print it and give it out.  There’s just one stipulation – the money can’t leave the country.  It can’t be sent to relatives in Nicaragua or used to hire workers in China.  It has to be spent in the 50 states.

Think of the ramifications.  The boost to the economy will be incredible.  Some people will pay down debt or save their homes, while others will buy TVs, cars, and yes, useless junk.  Some might even use some of the money for booze, cigarettes, and methamphetimines, but that can’t be helped.

All this will turn into many of the 7 million people laid off from work since the beginning of the Recession getting gainful employment again.  For every dollar currently in circulation, there will now be three dollars.  Banks will start lending again and the good times will roll.  States will see an increase in sales taxes collected, easing their budget pains.

The nay-sayers will yell that my plan will cause inflation.  Sure, it will.  But it’ll be manageable, maybe 10% at most and it will be a one-time thing, just like my giveaway windfall.  But the trade-off of jobs and reduced personal debt is well worth it.  The American economy will have the jump-start it needs.

Some might call my plan crazy.  But at least I have a plan.

And I bet you’re smiling and already thinking about how you’d spend your $10,000. 

- Mountain Man

http://www.MountainManandCityGirl.com

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Wildwood recall successful

Thursday, December 10th, 2009

“Surprise, Surprise, Surprise”, as Gomer Pyle used to say. 

To the surprise of many, including this ardent Cape May County observer, voters successfully recalled City of Wildwood Mayor Ernie Troiano and Commissioner Bill Davenport in Tuesday’s special election. 

The first part of the ballot asked whether voters wanted to recall the pair.  Voters went 624 to 487 to recall the mayor and 649 to 470 to unseat the commissioner.  Apparently there was enough dissent within the community to overcome the regular party machine.

The second part of the ballot then asked to vote for two of the six candidates.  With only about a dozen or so provisional ballots not yet counted, the vote went:

Ed Harshaw 600, Al Brannen 577, Troiano 496, Davenport 453, Ernesto Salvatico 45, and John Roat 42.

And so Harshaw, a real likable high school history teacher, and Brannen, who’s been a thorn in the administration’s side, take over a city with the highest tax rate in Cape May County and a mountain of debt.  They join Commissioner Gary DeMarzo, the controversial third commissioner.

The trio will decide amongst themselves who will be mayor and they haven’t hinted publicly yet whom they each will vote for. 

The outgoing mayor took a parting shot, not indicating whether or not he knows exactly who will be the new mayor.  “The only thing that bothers me is you’ll have an absolute nitwit for a mayor now.”

- Mountain Man

http://www.MountainManandCityGirl.com

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Bank of America isn’t

Thursday, December 10th, 2009

If you have credit cards – and who doesn’t? – you probably got a notice in the last few days from Bank of America.  The letter said that your credit line has been reduced to a few hundred dollars.  The tens of thousands of dollars of available credit or cash you had the week before is suddenly gone!  Merry Christmas.

Chase Bank and Bank of America, which merged with Merrill Lynch in 2009, pretty much have the credit card business all to themselves.  These two giants of the financial world control the credit destiny of tens of millions of Americans.

So why would Bank of America suddenly cut off five or ten million hard-working American families from having credit lines?

 

This past Tuesday, December 8, Bank of America paid back the $45 billion it got from the U.S. Government in the big bank bailout.  It did it with about $19 billion in cash and the balance by selling off securities.  To make sure they had the cash on hand, B of A apparently needed to make sure you couldn’t borrow any of it.

Here comes the kicker.

Bank of America paid back the $45 billion to the U.S. Treasury so that they would no longer be bound by the rules that were instituted as a condition of using the bailout funds.  Since the CEO of B of A recently announced his resignation as of December 31, the board of directors has been searching for a new CEO.  It seems they feel that they can’t offer “proper incentives” to attract a quality CEO and accepting the government grant money limited the bonuses allowed to be paid to the company’s top management.

So, to make sure they can offer their new CEO $50 million or $100 million in bonus incentives, they cut off the credit of millions of American families! 

Where’s the public outrage?

- Mountain Man

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A Real Person on the Phone

Tuesday, December 8th, 2009

I read a Letter to the Editor in today’s Press of Atlantic City that addressed one of my many pet peeves – not getting a real, live person on the phone when you call a business.

Isn’t it annoying?  Especially when you know there’s a bunch of slackers sitting there probably drinking coffee and eating doughnuts and listening to the phone ring.

Automated answering systems are impersonal and make you feel like your business is not appreciated.  As the Press letter states, the worst scenario is when your first prompt is “Press 1 for English”.  Arrrgh!

And this all brings me to mention Jewell Real Estate Agency.  We don’t have an automated system.  We ALWAYS have a live person answer the phone.  I’m not talking just during business hours, but 6am to 9pm every single day of the year.  That’s 15 hours a day that one of us is there to actually take the receiver off the hook and say, “Good morning (or afternoon or evening), Jewell Real Estate Agency, Joyce (or Chris or Douglas or ….) speaking”. 

We will NEVER, NEVER, EVER have an automated system.  You’ll never hear “Choose from the following menu options” or “If you know your party’s extension, dial it now”.  It upsets me just thinking about the idiot companies that do this.

In this fast-paced world, isn’t it nice to know that somewhere out there you can speak to a real live person.  If you ever call 609-729-8505 or 609-463-8423 and you get an automated system with extension options, then guess what?  You missed my funeral!

- Mountain Man

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Political Speak

Tuesday, December 8th, 2009

In the October 2009 issue of New Jersey Realtor, the magazine did a typical pre-election article asking the governor candidates – incumbent Jon Corzine and challenger (now Governor-elect) Chris Christie – a series of position questions.

Their answers were mostly, well, carefully worded non-answers or non-commitals.

The first question asked was, ”what steps will you take to reform our property tax system?”

Gov Corzine gave a long-winded eight paragraph account of his accomplishments in office, but sidestepped the actual question.  Christie gave a better answer, but limited his solution to “a smaller, leaner, more efficient government” and that he would keep the property tax rebate in place.

The second question dealt with repealing the Realty Transfer Fee, which averages $2,958 for each transaction.

Christie called it “one of the best examples of a tax that was imposed to capitalize on a booming real estate market that has now proven to be incredibly damaging”.  Good answer, but he stopped short of proclaiming he’d repeal it.  Corzine again completely avoided directly addressing the question.

The next question asked, “Do you support efforts to partially eliminate the property tax deduction?” and would they support “imposing a sales tax on rentals or professional services?”

Corzine basically said, “Leadership is about making difficult choices” and “I cannot guess what actions we will be required to take”.  Typical incumbent evasiveness!  Christie did step up by saying, “I do not support either the further elimination of the property tax deduction or expansion of the sales tax or any other tax.”  He stopped short of saying he’d veto such attempts.

The fourth question was “What actions will you take to encourage stabilization and growth of the real estate market?”

Christie spoke of “restoring the vitality of our cities” and “an elimination of the outrageous quotas and requirements of the Council on Affordable Housing (COAH)”.  Good answers, but they don’t really address stabilization and growth.  Corzine talked about business development and his Economic Stimulus Act of 2009, but it fell short of being reassuring.

The final query was concerning the government’s right of eminent domain, especially seizing a person’s property and giving to another private property owner for redevelopment purposes.

Both candidates gave “feel good” two sentence answers, but no concrete proposals.  Hmmm.

I must admit that I voted for neither of these candidates but instead voted for an alternative choice, which pollsters interpret as a dissenting vote.  I guess I’m becoming increasingly disenfranchised from the system.  Can you blame me? 

Governor-elect Christie has inherited a giant pile of chicken manure.  Let’s see if he can turn it into chicken salad.

- Mountain Man

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Feeding at the Public Trough

Monday, December 7th, 2009

While most folks are struggling to make ends meet in this depressed economy, New Jersey government and municipal retirees are cleaning up.  In fact, 428 retirees pull in over $100,000 per year in pension money.

In 2008, the median pension in New Jersey was $61,800 for police and fire retirees, $81,700 for State Police, and $43,200 for teachers.  These figures are more than the salary – yes, salary – of the average New Jersey worker, which is $37,900.

In a state with an $8 billion budget deficit this year, the $5.7 billion in pensions is an unfair drain on taxpayers.  To add insult to injury, the state and many municipal governments have failed to keep up with fully funding these pension funds, meaning the public will get increasingly larger bills each year.

So what to do?

Obviously, the system needs to be changed.  The thought that a fireman or policeman can work from age 21 to 46 and collect substantial sums of pension money after this 25 years, then start a second career, is unconscienable.  Newly hired state employees, who could retire at age 55 as of 2001, have seen outgoing Governor Corzine increase that back to age 60.

It appears that legislators are fearful of reigning in the money grab by retirees.  So taxpayers will continue to fund this act of greed through real estate taxes, which are already the highest in the United States.

There is one group that won’t be funding the pension through real estate taxes.  Did I mention that one-third of these pensioners have moved out of New Jersey?

- Mountain Man

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Lower Township tax assessment

Saturday, December 5th, 2009

Lower Township, which includes such areas as Diamond Beach, North Cape May, and Villas, has decided to do an in-house reassessment of properties.  No, not to increase the value of properties, but to lower them.

It seems that when Lower did its last assessment in 2007, the implications of this recession were not fully evident.  But now three years of a down market in real estate have seen these assessments appear to be 20% or more too high.

That 2007 assessment tripled the township’s ratables from the 1992 figure of $1.5 billion to over $4.5 million.  The new reassessment will be done by the municipal tax department, meaning there will be no on-site inspections.  It’s strictly a numbers crunch.  It also means that the cost will be just $25,000, instead of the million dollars for a full-blown reassessment by an outside company.

Properties expected to see the biggest drop in values are those near the water, i.e. the Delaware Bay and Atlantic Ocean.  Hopefully Diamond Beach owners, who have historically been a cash cow for Lower despite fewer services and no fire station, will get a fair shake this time around.

Speaking of Diamond Beach, the new Grand condominium complex, located beachfront on Atlantic Avenue, was originally touted by developers and officials as bringing as much as $6 million in new property tax revenue to Lower Township.  With one of three buildings completed, just $400,000 is being added to the coffers this year. 

The Grand may someday make a big difference in the tax rate, but for now, with Lower this year paying an extra $289,000 in pensions plus a 3.7 % salary increase to municipal employees, that $400,000 from the Grand property taxes has been negated.

Seems like no matter what townships throughout New Jersey do to lower their budgets, the greedy, whiny employees – current and retired – milk the taxpayer far beyond the limits of reason.  That, sadly, will never change in our current political climate of patronage and deal-making.

- Mountain Man

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Recreation Subsidies

Monday, November 30th, 2009

When the recent “Veterans Day Storm” slammed the east coast November 11-15, some Cape May County island homeowners suffered water damage and wind damage to their properties.  For most, it was business as usual and they cleaned up the mess and moved on.  It’s life at the shore for those in the few scattered low-lying streets in Wildwood, North Wildwood, and West Wildwood.

The beaches are another story.  So that local governments could score Federal Emergency Management Agency (FEMA) money, New Jersey Governor Corzine obligingly declared a state of emergency.  The damage to Cape May County, originally ballparked at $89 million, was determined to actually be $27.3 million.  Those beach erosion figures are based on $10.40 per cubic yard of sand to be replaced.  Sand for dunes is calculated up to $20 per cubic yard.

The bigger question here is whether the U.S. government should be subsidizing beaches.  Is it fair to someone living in Iowa to pay for beaches in Avalon rimmed with $4 million vacation homes?

What would homeowners who cry for FEMA beach funds in their communities think if the federal government started funding ski resorts?  Heck, they want snow by Thanksgiving to have a good year.  Should we be subsidizing snowmaking operations at the hundreds of ski slopes throughout the U.S.?  Let’s take it a step further and put refrigeration lines under each ski slope.  That’ll make the millions of American skiers happy.

While we’re at it, why not have FEMA subsidize all the golf courses in America?  In a drought, ship in tanker trucks of fresh water from the Great Lakes and major rivers.  That would please the 24 million Americans who play golf.  They want lush green golf courses, not those spotted with burned out patches of grass.

Do you see my point?

With oceans rising as the Arctic, Greenland, and Antarctic melt, the beach erosion problem has intensified.  Many local shore towns will be doing two beach replenishment projects this year.  Ten years from now, it may necessitate three or four a year, which isn’t going to happen.  FEMA will finally say, “No Mas”.

So it’s time to be proactive.

Where beaches habitually wash out in storms, it is time to rip rap with massive walls of boulders, much like the seawalls recently constructed at the north end of both North Wildwood and Avalon at the inlets.  FEMA should offer to pay for the rip rapping of the ocean.  Sure it means less beaches, but once the seawalls are built, the beaches will come and go.  After all, beaches are always in transit.  It’s just in the last 100 years that civilization decided they’d try to tame Mother Nature.

There will always be plenty of beaches in Cape May County, but people will have to search them out.  Here today, gone tomorrow, but another beach pops up a mile away.  And certain beaches, like Wildwood, which is over 1,000 feet in depth, will always be there.

Like it or not, the days of FEMA beach handouts are numbered.  As they should be.

- Mountain Man

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Tax Credits for Homebuyers

Monday, November 30th, 2009

The popular homebuyer tax credit program, which was due to expire November 30, 2009, has been extended to April 30, 2010.  Adding to the good news is the fact that it is no longer confined to just first-time homebuyers.

The rules are that the first-time homebuyer can not have had interest in a principal residence for three years prior to the purchase.  A current homeowner must have used their existing home as a principal residence for five of the previous eight years.  The first-timer gets an $8,000 credit ($4,000 if married filing separately), while the existing homebuyer gets a $6,500 credit ($3,250 if married filing separately).

All other provisions of the Tax Credit are the same for both first-time homebuyers and current owners.

The prospective property must be put “under contract” before May 1, 2010 and the transfer must take place by July 1, 2010.  The income limits are $125,000 for a single person and $225,000 for a married couple (up from $75,000 and $150,000) for a full tax credit.  A partial tax credit is given for $125,000 to $145,000 for singles and $225,000 to $245,000 for married couples.  Above those incomes is no tax credit.

The maximum price of the property being purchased is $800,000.  The property transfer can not be between dependents (parents and child or grandchild) and documentation of the purchase must be attached to the tax return.  Parents can still, however, co-sign on the mortgage and the child gets the tax credit.

All in all, the homebuyer tax credit is a good deal.  If only it was permanent.

- Mountain Man

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COAH is Un-American

Saturday, May 16th, 2009

I have never been described politically as anything other than a liberal.  A bleeding heart liberal, maybe even.  I care about the common man, of which I count myself.

 But I do draw the line.

In the 1975, the New Jersey Supreme Court decided that the township of Mt. Laurel was unlawfully excluding low and moderate income families from town.  Over the course of the next nine years, the Court found the same happening in Mahwah, Franklin Township, Chester, and again Mt. Laurel.

 The result was the Fair Housing Act of 1985.  The Council on Affordable Housing (COAH) was formed, under the auspices of the state Department of Community Affairs, to enforce regulations enacted to combat this practice.

COAH’s mission was and is “To facilitate the production of sound, affordable housing for low and moderate income households by providing the most effective process to municipalities, housing, providers, non-profit and for profit developers to address a construction obligation within the framework of sound comprehensive planning.”

 Poppycock!  Bullfeathers!

What the law said, in effect, was that no matter how nice or exclusive your town is, you will be forced to supply your COAH-mandated quota of low and moderate income housing.

I vigorously oppose this forced integration of different economic levels of people.  It’s un-American.

I have an above average income, but I’ve never been so foolhardy to think that I can afford to live in Palm Springs, California or West Palm Beach, Florida or Newport, Rhode Island or a hundred other exclusive locals.  I don’t whine about it.  I don’t try to force a town to make sure there is a cheap house for me to buy.

Life is economics.  You have to live in a community that you can afford.  Interference by legislative do-gooders is not right.

My first home was in rural Maine.  It’s all I could afford.  My next property was in rural North Carolina.  Again, it was all I could afford.  I understood my place in the economic pecking order and I accepted it.  I lived within my means.

My first home in Cape May County was purchased when I was 44 years old.  I scrimped and saved.  I worked two and three jobs.  I never turned down overtime.  I was aware that hard work equalled rewards – in this case a nice home at the Jersey shore.

Two communities in Cape May County are being forced to shoulder an unfair burden of affordable housing.  By 2018, Middle Township – which includes Rio Grande and Cape May Court House – must supply 934 units.  Upper Township is on the hook for 531 units.  Yikes, that’s crazy!

The effect on the two school systems, the police force, the services needed will hamper existing homeowners with an even larger tax burden than they already have.  And their way of life will change forever.

It’s time to repeal the Fair Housing Act.  Government meddles in our lives way too much.  COAH is living proof of that.

- Mountain Man

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North Wildwood Auction

Friday, May 16th, 2008

A real estate auction held last week drew plenty of prospective bidders by advertising for a couple of months that “bids begin at $175,000″.  But of the 800 who attended the auction and 600 who had requested the 300-page bid packets, less than 50 actually bid on the 26 condomimiums. 

It seems that The Pointe at Moore’s Inlet advertising didn’t live up to the billing.  When the 25th unit sold for $346,500, the 26th condo was pulled from the sale.  The sellers weren’t going to let another go so cheap.  That 25th unit was the only one under $400,000.  The 24th went for $412,500.

The unique bid format began with the highest bid, which in turn allowed the purchaser to pick from the 26 condos the one he wanted.  That high bid was $786,500 for a premium unit originally priced at $1,249,000.  The second round bid was $770,000 on a unit originally being sold for $1,049,000.

The total price for the 25 units was $14,459,500, or an average of $578,380.  There are 18 units that were held back from the auction, with most being more square footage than those offered at the auction.  It’s probably safe to say that those 18 units, plus the one pulled from the auction, will fetch another $12 million or more.  Another 17 units were sold by the developer before going the auction route.  The most expensive went for over $1 million, and four others broke the $800,000 plateau.  So let’s conservatively say they collectively reaped another $10 million.

Adding the numbers, we’re looking at $36 million in total sales, probably more.  While it’s not near as much as the developer originally hoped to tally, it should keep the project out of the red ink.

As for the buyers, they didn’t steal the units.  But they got a pretty decent deal! 

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One drawback to the complex is that it is located in the heart of North Wildwood’s bar district.  That means loud, raucous crowds on summer nights until 3am, when the bars close.  Weekends find assorted festivals, with revelers on the streets practically until dawn. 

If you’re like most of us 50-something and 60-something year olds, that’s way past our 10 o’clock bedtime.  But if you like to party all night, or want to rent the unit to party-types, this might fit the bill.

- Mountain Man

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Second Homers

Saturday, March 1st, 2008

The real estate market in Cape May County, New Jersey is based on second homes – vacation homes - whatever you want to call them.  The county is evenly divided – 50% of residences are primary homes and 50% are second homes.  At our real estate agency, both our island office in Wildwood Crest and our mainland office in Swainton sell about 90% second homes.  Primary homes are a small part of our business.

Cape May County has a lot going for it to attract families with the financial ability to afford a vacation home.  There’s the beaches, the boardwalks, fishing and boating, 12 golf courses, a great free zoo, bird-watching, restaurants, state parks, museums, and shopping.  Eco-tourism alone accounts for $522 million per year.  With low crime, no industry, and tolerable traffic, it’s the recipe for an inviting vacation destination.

While much of the country still suffers from a stagnant real estate market, here at the shore the market is back on the rise.  Perhaps analyzing a few numbers will help us understand not only why we are doing okay, but also why we’ll flourish in the future.

There are 6 million households in the United States that own a second home.  Numbers released from a 2007 poll indicate that 22.8 million American households (out of 105 million total US households) expect to purchase a second home in the next 10 years.  Wow, that’s a staggering number.  Let’s postulate, being very conservative, that two-thirds of those families will not realize that dream.  That still leaves 7.6 million families that will purchase a second home, more than doubling the number of vacation homes nationwide.

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What do people look for in a vacation home?  Good question.  The answer is either water – an ocean, lake, or river – or mountains.  Not too many families want their getaway to be in rural Iowa or downtown Cleveland.  Naturally, Cape May County has the Atlantic Ocean, along with wide, sandy beaches, moderate temperatures, and it’s easily accessible by car from anywhere in the middle Atlantic states.  We’re not Maine, we’re not Florida, in weather extremes or distance.  Thank heavens!

Obviously, affluence has a lot to do with where second home families originate.  The highest median home price is in California, so that would be the best market.  Hawaii and Washington, DC are second and third, but they’re too small for the home prices to mean much.  The next “real” market is Massachusetts in fourth place, then New Jersey is fifth. 

Metropolitan New York City with 18.7 million people, Philadelphia and its suburbs with 5.8 million people, along with all of New Jersey, are the primary sources for folks interested in buying second homes at the South Jersey seashore.  All are within a two and a half hour drive, the accepted norm.  That is a tremendous pool of families from which to draw potential vacation home owners.

The demographics are a strong argument why Cape May County’s real estate market will continue to grow and prosper.  One figure still sticks in my mind – 22.8 million households expect there’s a good chance they’ll buy a second home in the next 10 years.  Kinda gives me goosebumps.

- Mountain Man

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A Reason to NOT Buy

Wednesday, February 27th, 2008

I got a call recently from a real estate client.  Whenever the mood hits him, he phones us to find out the real estate market conditions here in Cape May County, New Jersey, and more specifically in the Wildwood, North Wildwood, Wildwood Crest shore area.  He knows we have our finger on the pulse of the market.  And he knows I always have an opinion, good or bad.  There’s no BS.

Our conversation began with my monologue on how busy we have been since mid-Summer, 2007.  He heard the same thing from me back in October during our last talk.  “It’s still going great,” I added.  “We’ve just had plenty of closings in January and February, plus we’ve got several more properties ‘under contract’ and we’re in active negotiations on a few other deals.”

Sounds like typical realtor hype, right?  Actually not.  This client knows that when the market started to stall in mid-2005, even though few recognized it, we were quick to alert anyone who’d listen that it was NOT the time to buy.  Conditions were changing.  We could just sense it.  Something was amiss.

Just like a recession, the signal that a real estate market is going up off the charts or down into the hopper isn’t generally acknowledged until you are a half year or more into it.  The thinking is that it isn’t a trend until it has been sustained for a while.  That’s fair enough.

By 2006, much to the chagrin of City Girl, I openly admitted that, as realtors, we were losing our shirts.  The real estate market was dead, the phones weren’t ringing, and we went weeks at a time without any walk-in traffic.  It was disheartening.  And we told our clients so.  Honesty is so much more refreshing than deceit, and definitely easier on your conscience.

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Fast forward to my recent phone call.  “Give me a reason to buy now,” the client queried, “Why buy?”  I was ready.

“Give me a reason to NOT buy,” I quipped.  “Interest rates are at near historic lows, inventory is plentiful, and the range of selection is great.  And as you know, prices are down $100,000 to $150,000 or more from 2005.”

“Remember all those sellers you were envious of back in 2003 and 2004?  The ones who had bought in the bad real estate market times of the late 1990s,” I continued.  “You thought how smart they were to be cashing out on their investment a few years later and making $100,000 or more, sometimes much more.  Well, the cycle is repeating.”

“You’re right,” he said, the wheels turning in his mind.  “Tell you what.  Email me some investment property listings, then I’ll pick a few and we’ll go look at them this weekend.” 

 ”Is Saturday or Sunday better for you?”, I replied, knowing that another client – and friend – was about to make some money.

- Mountain Man

To find out more about investment properties in Cape May County, visit our website at www.JewellRealEstateAgency.com

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Developers Know

Monday, February 25th, 2008

Many folks are fooled by the lack of new construction activity here in the Wildwoods and throughout the island communities of Cape May County.  “I knew it would never happen,” the backseat drivers shout about new 20+ story hotel/resort projects touted in the newspapers but not yet started.  They are wrong.

In the state of New Jersey, any new construction project that is within 300 feet of water, has more than 24 units, or more than 48 parking spots, needs a CAFRA permit.  This Coastal Areas Facility Review Act, administered by the NJ Department of Environmental Protection, is a thorough and lengthy process.  It takes a minimum of two years to two and a half years to obtain the CAFRA permit, and in the case of the seven high-rise hotels in Wildwood, can take four years.

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So while developers are exerting an inordinate amount of effort and $100,000 or more in fees for their environmental attorneys, engineers, architects, and endless environmental studies, an uneducated Joe Public sits on the sidelines and proudly pronounces the project DOA.

Unfortunately, these uninformed zealots are given a public forum to make their opinions widely known.  In the local weekly county newspaper there is a gutless section called “Spout Off”.  In it, anyone can basically say anything and push it off as fact.  Right or wrong, it is printed.  The authors don’t have to sign their name.  It’s a disgrace!

The newspaper is owned by a far right, ultra-conservative snob who labels wind power and solar power band-aids, global warming a left-wing hoax, and promotes the drilling of the arctic and nuclear power.  He’s a small town version of William Loeb and his Manchester Union Leader.  You can see why he not only allows this journalistic embarrassment, he’s proud of it.

Anyway, Spout Off perpetuates the so-called decline of the real estate market and the county in general by letting these ”doom and gloom” know-it-alls have their say.  Then more naive citizens read it and believe it.  Soon they talk about it in public as if it was fact.  After all, they read it in the newspaper so it must be right.  Right?  Wrong.

The truth is that these projects, along with large hotel complexes in Cape May, North Wildwood, and Diamond Beach are moving along, slow but sure.  Rome wasn’t built in a day.

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As realtors, we see more and more developers in the area looking for tracts large enough to host more hotel or condominium projects.  At our agency, we have several conglomerates with upwards of $100,000,000 to invest in the shore area of Cape May County.  We are constantly calling them with leads on new vacant properties, along with faxing and emailing tax maps, lot descriptions, comparative market analyses, and more.

Large projects don’t happen overnight.  From concept to completion is about an eight year process.  Unknown to most local residents, that concept faze is already underway!  The developers are busy shaping the county’s future, secure in the belief that the real estate market is on the brink of another boom.

- Mountain Man

To learn more about the Cape May County real estate market, visit our website at www.JewellRealEstateAgency.com

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It’s in the Numbers

Monday, February 25th, 2008

Having been a mathematics major in college, I’m understandably enamored with numbers.  Talk is talk, but numbers give substance.  There’s nothing like good, hard numbers to bring a topic into focus, to cut down on speculation and misleading conclusions.

Let’s see if the demographics support that the real estate market in Cape May County will see another boom.  Not just a rebound, which is already happening, but a boom!  It’s an interesting prospect, one that many insiders like myself support and others just can’t fathom.

The state of New Jersey has a population of 8.724 million people.  The median age is 38.2 years, with 12.9 percent of folks 65 or older.  The median household income is $64,470 and the homeownership rate is 67.3 percent, meaning two-thirds live in a home they own.  Of adults, 33.4% have a college Bachelor’s degree, and 12.4% have even higher degrees.

What this all means is that New Jerseyans, on the whole, are pretty well off.  The median household income in the entire country is $48,451, so we’re a third higher.  New Jersey has the highest percentage of millionaires in the USA.  Throw in metropolitan Philadelphia and suburban New York City, and there’s a lot of affluence in our region.  All this fuels the second home market, which comprises half of all properties in Cape May County.

Experts keep tossing out that 40,000 new employees will be needed in the Atlantic, Cape May, Cumberland county region.  Most of this is centered on Atlantic City, whose 11 casinos already employ 40,788 people.  Several casino expansions are in the works, with at least three new casinos slated. 

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MGM Mirage will be breaking ground within a year on its $5 billion megaresort, located on 72 acres next to the Borgata.  This largest resort in AC, scheduled to open in 2012, will feature 50 stories, 3,000 hotel rooms, a 7,500 seat concert arena, and a half million square feet of space for retail, restaurants, and entertainment.  Revel Entertainment has already broken ground on a $2 billion casino complex, located on the strip next to the Showboat, slated to open in 2010.  Pinnacle Entertainment, which tore down the aging Sands Casino last October, should have their new $1.5 billion casino in operation by 2012.

With 128-acre Bader Field going out to bid in the next year, the possibility of another mega-casino, or up to four smaller casinos, will add to the need for new employees.  So where will all these new employees live?  Rounded off, the current yearround populations of the three counties are Atlantic 250,000, Cumberland 150,000, and Cape May 100,000.

Let’s suppose that keeping with the statistics, two-thirds of the 40,000, or 26,680 will purchase their own home.  Forget the island communities, where summer folks have driven up prices.  I’m talking about Longport, Ventnor, Margate, Ocean City, Sea Isle, Avalon, Stone Harbor, Cape May, etc - places where a single family home would be prohibitively expensive for a working family employed by casinos, retail, or restaurants.

That leaves the mainland towns.  Arguably, Egg Harbor, Galloway and Hamilton townships, all Atlantic County towns situated in the Pinelands “growth zone”, would pick up the brunt of the new residents.  But many families will look to live a little farther from the hustle and bustle of the AC area. 

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Cape May County, just a 20-35 mile commute, fits the bill.  The mainland communities – Lower, Middle, Dennis, and Upper townships, plus Woodbine – currently have 822 single family homes listed for sale.  With the number of housing developments already approved in those towns doubling the number, that’s about 1,600 available homes.  An influx of 40,000 people over the next half dozen years or so will surely result in most of those homes being snapped up.

In the world of supply and demand, especially in real estate, this demand will create more building and higher prices on the mainland.  Doesn’t that add up?

Throw in the seven 20+ story hotel/resort projects on the books in Wildwood now awaiting NJDEP approval, and a couple big resorts upcoming in North Wildwood and Diamond Beach, and you have the recipe for another real estate boom.  Numbers don’t lie.

- Mountain Man

To learn more about the Cape May County real estate market, visit our website at www.JewellRealEstateAgency.com

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Looking in the Mirror

Wednesday, February 6th, 2008

I’m currently at our vacation home in Green Bank, West Virginia, a recently built custom log cabin located at 2,700 feet elevation.  The county we’re located in, Pocahontas County, has a yearround population of 9,000.  In area, it is three and a half times larger than Cape May County.

Standing in my driveway, I was talking to a local guy this morning.  He’s about 50 years old, and drives a school bus in the morning and afternoon, and in between shuffling kids he drives a dump truck for a gravel pit company.  He was delivering gravel to me, as he has twice in the past year.  We always take the time to stop and chat.

The topic turned to New Jersey.  “I live in Cape May County, which is at the southernmost tip of the state,” I said.  “We have 100,000 yearround residents, but on any given day in the summer there are 750,000 people in the county.”  He seemed to be digesting the information.  “We’re at the shore and we have no industry,” I continued.  “Tourism is our only industry.”

That touched a nerve, much to my surprise.  “I hate tourism,” he said.  “It’s ruined our county.  I feel strongly about that.”  I shrugged, leaving him room to continue.  “They’ve driven up the prices.  You can’t afford land here anymore.  Our kids just don’t have a chance to buy a home here.”

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Aha!  Didn’t that sound familiar.  I’ve heard the same rant from locals in Cape May County.  The two counties are similar in demographics, if not in size.  Each has 50% yearround homes and 50% second homes.  We, of course, have the shore.  Pocahontas has Snowshoe Ski Resort, called “the most popular ski resort in the south”. 

That has fueled a profusion of condominiums and townhomes atop the mountain, in addition to large single family homes at the base of the mountain.  Then there’s the non-skiers, like City Girl and myself, who enjoy the mountains and beautiful spring, summer, and autumn weather.  A summer heat wave in Pocahontas is 83 degrees.  It has the headwaters of eight rivers, the most of any county in the entire United States, earning it the name “The Birthplace of Rivers”.  It also has the distinction of being the county with the highest average elevation east of the Mississippi River.  As you can see, it has a lot going for it.

“My kids both had to move away to get decent jobs,” he continued.  “There’s nothing here for them.”  I stepped in.  “It’s the same in Cape May County,” I added. “Our kids all leave, too.  There’s not enough high paying jobs.  Plus, the kids want action, so they move to metropolitan Philadelphia or New York.  It’s too boring for them where we live.”

He didn’t bite on that one.  He wasn’t going to admit that the twenty-something kids from Pocahontas want to live near restaurants, malls, theaters, and such.  In Pocahontas, you can barely find a pizza place after 7:00pm.  He grew up here in Pocahontas, and wasn’t about to accept that there was nothing to do for today’s young, independent adults.

It was time to bring the conversation full circle.  “You know what?”, I asked, not expecting an answer.  “When our kids get to be 40 or 45 years old, a lot of them will move back.  They’ll find out that the things you and I enjoy are worth coming back for.  The simple pleasures.”

He nodded, and we parted.  We were both content in the feeling that where we live – Pocahontas for him and Cape May County for me – was the cream of the crop, life at its best.  Maybe that’s why tourists love it so much?!

- Mountain Man

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A Busy Weekend in the Wildwoods

Monday, February 4th, 2008

The weekends are when we, as realtors in Cape May County, New Jersey, are the busiest.  Many folks come down here from metropolitan Philadelphia and the suburbs of New York City, which includes northern New Jersey, seeking a vacation home.  The average ride is about two hours.

This past weekend, the first weekend in February, 2008, was a typically busy weekend.  The weekend normally gets set up during the weekdays.  Folks search the internet for available properties here in the Wildwoods.  Our website offers access to the county’s Multiple Listing Service, plus there’s Realtor.com to find suitable possibilities. 

Usually by Thursday, prospective buyers call or email us with a list of the properties that have aroused their curiosity.  Now knowing their criteria, we may add a few more properties to their list.  Being so familiar with the properties on our island, we may alert them that one or two they picked won’t suit their needs.

By Friday, we have set up appointments to see all the properties on the weekend with the buyers.  If the first Saturday appointment is early, like 9:00 or 9:30, we’ll pick up those keys on Friday afternoon.

This past weekend, City Girl spent all day Saturday and Sunday showing properties.  It resulted in one contract being drawn up, and two more couples have narrowed their choice to two properties.  Meanwhile, I was busy on listing appointments and taking care of signs, inspections, phone calls, etc.  Our secretary Chris held down the fort, handing out keys all day long to other agents seeking to show any of our 42 listings.

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The island was buzzing with activity.  Considering we’ve had just 3″ of snow so far this winter, folks know it’s almost a sure bet that the weather here will be nice, with temperatures running 10 to 15 degrees warmer than they find back home.  Agents were scurrying around the island all weekend with anxious buyers in the back seat.  It was reminiscent of 2003, when the Wildwood market was hot after many slow years.

At our agency, 2008 has started off like gangbusters.  We had two closings in January, and put three properties “under contract”.  We are also actively negotiating three other deals between the sellers and buyers.

We are fortunate to be a real estate agency with just us two brokers and a secretary.  We don’t have to split commissions with agents, so every commission is our own.  It also means we work six days a week yearround, and we’re available 6am to 9pm, 365 days a year by telephone.  Not a whole lot of people can keep up that pace, but we love the real estate business and enjoy our relationships with our clients.  Many have become lifelong friends.

Life is all about doing what makes you happy.  For us, a weekend looking at properties with clients makes us content.  It kinda gives us that warm, fuzzy feeling.  I guess our motto sums it up, “You’re more than a customer, you’re a friend”!

- Mountain Man

To find out more about properties available in the Wildwoods, visit our website at http://www.JewellRealEstateAgency.com

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Roll the Dice

Saturday, February 2nd, 2008

When people think of Cape May County, New Jersey they focus on the fabulous beaches, fishing and boating opportunities, world class boardwalks, great restaurants, the laid back atmosphere and low crime rate.  Let’s face it, these are the attractions that swell the yearround population of 100,000 up to 750,000 in the summertime.

But Cape May County offers the accessibility to much more.  Millville, just 20 minutes up country roads, unveils its new 700-acre Thunderbolt Raceway this August.  A 2.3 mile road course, plus a 1.7 mile road course, will assure that sports car and grand prix car racing will be a regular weekend venue.

Just 30 miles to the north of Cape May County is Atlantic City, which as their slogan says, is “Always Turned On”.  As you may know, gambling came to Atlantic City in 1978.  There are now 11 casinos, with many touting expansions and new ones are on the drawing board.

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How big is the casino business?  There are a total of 35,603 slot machines, and they paid out 3.46 billion dollars last year.  Note, that’s billion, not million.  There are 1,612 table games, which forked out $1.45 billion in 2007.  The casinos currently employ 40,788 folks.  That’s a lot of impact.

The 11 casinos, with the year they were opened are: Resorts (1978), Caesars (’79), Bally’s (’79), Harrah’s (’80), Hilton (’80), Tropicana (’81), Trump Plaza (’84), Trump Marina (’85), Showboat (’87), Trump Taj Mahal (’90), and the Borgata (2003).  A new downtown oceanfront casino, plus a 140-acre mega-casino at the edge of town, appear to be the next to add to the city’s appeal.

The future of AC looks bright, so expansions are in the works.  The Borgata, which is AC’s first Las Vegas style mega-resort, completed an expansion in 2006, and a new hotel tower nears completion.  Harrah’s new digs open next month.  Donald Trump’s Taj Mahal will be opening its new addition this fall.  Resorts pushed skyward in 2004, the Tropicana expanded in 2004, Showboat added in 2005, and Trump Plaza remodeled in 2004.

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The casinos have realized that to expand their patron base, non-gaming activities had to be implemented.  Restaurants, spas, and retail stores were the answer.  The Borgata has many restaurants, with three featuring celebrity chefs Bobby Flay, Wolfgang Puck, and Michael Mina.  Harrah’s has 172,000 square feet added for restaurants, retail, and entertainment.  The Showboat added the 2,380-seat House of Blues music club.  The Tropicana opened The Quarter, a sprawling ground floor retail, restaurant, and entertainment mall.  Several upscale non-casino shopping malls, catering to Boardwalk and casino foot traffic, have brought hundreds more name outlets into the fold.

Nightlife is what Atlantic City is all about.  All the casinos have showrooms, bringing the biggest names in comedy and music to the public every night of the year.  There are also Broadway musicals, holiday spectaculars, and specialty events, like the popular Mummer’s bands.  Bally’s, Borgata, Tropicana, and now the Showboat regularly host boxing cards, highlighting some of the biggest names in the sport.  Caesars hosts boxing at the AC Boardwalk Hall, also a venue for everything from Andre Rieu to college basketball to midget car racing and monster trucks.  AC has minor league baseball with its Atlantic City Surf.

As you can see, Cape May County life offers a lot more than the county itself.  If you can’t find something to do here within a half hour’s drive, you’re not trying.

- Mountain Man

To learn more about Cape May County, visit our website at http://www.JewellRealEstateAgency.com

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A Good Realtor

Tuesday, January 29th, 2008

Once in a while, I’ll get into a philosophical discussion with someone concerning “what makes a good realtor?”.  Sometimes it’s a client, sometimes another realtor, or sometimes someone you happen to meet that initiates this dialog and shares their thoughts.  Let me share mine.

The first criteria of a good realtor is honesty and being ethical.  Without those two ingredients, you can end this discussion.  We try to treat everyone as if they’re lifelong friends, almost kindred spirits.  I guess it’s a little of that “do unto others” thing, too.  As we are both hovering around 60 years old, we have reached the point in our lives where everything is about friendships.  It’s a certain bond that says, “I care about you”, and will look out for your best interests.

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The second criteria is sincerity.  Nobody likes a phony.  Be real.  When we tell someone something, we truly believe it.  Sometimes it’s not what they wanted to hear or expected to hear, but it’s what we perceive to be true.  If one of us is showing a prospective buyer a property and we don’t like it or think it matches their needs, we say so.  We don’t whitewash it, we don’t go along and keep silent just to get a sale.  We help you weigh the positives vs negatives.

The third criteria is enjoying what you do.  We both love being realtors, especially City Girl.  We both bounce out of bed in the morning anxious to get on with our day.  Our job is not a burden, but a pleasure.  And a challenge.  As baby boomers, we thrive on challenges.  It’s a generation thing, I guess.  Retiring just doesn’t seem to be in our future because we’re already doing the thing that makes us happy and gives us peace.

The fourth criteria is enjoying looking at properties.  We can both look at houses all day long.  My mother always jokingly told me, “Someday you’ll make someone a good wife.”  She was right, by gosh.  I appreciate kitchens, furniture, home decorating, flooring, etc - not typically “guy things”.  Curiosity also fuels our desire to see what a home looks like inside and out.

The fifth criteria is being proficient at the technical aspects of a real estate transfer.  Is the buyer’s mortgage process progressing?, is the home in a flood zone?, what expansions will zoning law allow?, does the roof need replacing?  There’s a hundred facets of a transaction that we must examine and successfully complete.

The final criteria is experience.  City Girl has been a realtor since 1978, me since 1996.  We are both brokers, a level above salesperson that required extra schooling.  We both have our GRI designations, again requiring extra schooling.  City Girl also has three more designations, all of which were earned through increasing her knowledge of the real estate business.

Experience also means practical experience.  City Girl once owned a hotel.  We once owned a bar/restaurant.  We both have been in retail and owned investment properties, and have a second home.  We’ve done renovation projects, I’ve worked for a surveyor, she’s been on the local zoning board for 20 years.  My point?  We’ve learned a lot of things in the real world that can’t be taught in books. 

No matter where you live in the country, a good realtor is a good realtor.  With one, you’ll make a friend for life.

- Mountain Man

To learn more about our agency, visit our website at http://www.JewellRealEstateAgency.com

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