From the Asbury Park Press:
A SLOWDOWN BY THE SEA?
BY DAVID P. WILLIS
A boom in townhouse and condominium construction has been a vital part of oceanfront redevelopment in the city, but the market here is not immune from the slowdown affecting the rest of the real estate industry.
Attracted by Pier Village, the oceanfront Victorian-style complex of shops and restaurants, builders rushed to put up 225 townhouses and 530 owner-occupied condominiums and rental units in the past five years, according to city Planning Director Carl Turner.
“That construction (along the ocean) was in reaction to the renaissance of Long Branch, coupled with an overheated . . . residential real estate market and the beachfront locations,” said Jeffrey G. Otteau, president of Otteau Valuation Group Inc. in East Brunswick.
Those units helped to meet a demand for condos and townhouses in Long Branch, a market that was underserved, Otteau said.
Now there are signs that the city’s real estate market is slowing down. As of Oct. 1, there was a 12-month supply of condos and townhouses on the market, compared with a nine-month supply a year ago, Otteau said. That’s an indication that it is taking longer for sellers to find buyers.
“Today, because of the large increase in home prices for many of those properties, coupled with the deterioration of the overall housing market, what we’re finding is that demand there is less because the prices are relatively high for year-round residents as far as condominiums go, and the vacation market has gone dormant for now,” Otteau said.
Some real estate agents say it is not clear what will happen.
Not immune??? Did they really think anything else?? Are they kidding with the headline?? Go ask Kara, its suppliers,workers and customers. I wonder if the guy who paid 1.25 mil ever got his windows adjusted???
I thought the Jersey Shore was unique??
The LBI market is dead according to an agent I work with. Nothing is moving, but askings are not dropping.
This is typically the busy season – after the summer rental income has come in – but she states it’s the slowest in recent memory.
Also interesting is that condo conversion buildings and multiunit homes (selling as “condos”) are sitting – and many are for sale. If I recall 1990, those were the biggest droppers.
I am curious whether the drop will in fact bring them to a point where the rental will cover the costs – or even close.
If homebuilders put no FREE INCENTIVES and just the real price… Home prices is ACTUALLY tanking folks !!!!
Buyers beware in the Home Pricing Slowdown !!!
Long Branch’s inventory has been sky high for months because asking prices are through the roof.
Along with all the new construction I would imagine there are a fair number of flippers caught holding the bag, as there are many high end townhouses and condos for sale (i.e. Grand Resorts).
I don’t have a good current count on the housing stock in the city, but I’d be willing to bet a lot of money that more than 5% of the total housing stock is currently for sale. If I had to put a number on it I might even be willing to double down all the way to 7%.
Here’s a few more fun facts:
right now the MLS for Long Branch has 106 condos priced $400K or more listed.
Dot Schultze mentions Grand Resorts, so I counted those up. I got 17 instead of 18, but I probably missed one. Oh yeah, she put the prices at between $600K and $1M.
One is listed at $539K (for a 1-BR!) and another is $559K
Ocean Villa, which is still under construction has to have 25-35 listings on the MLS.
I would imagine there are a few FSBOs in there as welland some new construction not on the MLS as well.
The end of the article speaks volumes about the Real Estate industry.
“Some real estate agents say it is not clear what will happen.”
If you can look at the local real estate market, consider all factors like inventory, demand, price, interest rates, etc. and still believe that it is “not clear what will happen”. Then, perhaps Real Estate is not the right profession for you (or more likely you are being less than honest with yourself and your clients re: the health of the mkt).
If you want to see how much real estate has dropped in Cape May County, go to http://www.capemaycountyherald.com. They have all of the property transfers from 2005 and 2006 listed as .pdf files.
There appears to be about a 60% to 70% drop in week to week activity. Also, many of the properties that are selling are recently constructed condos where buyers had deposits.