Sea Isle City Real Estate Blog

As a Realtor, that is always the question. Well, the numbers speak for themselves:

As of Saturday morning March 15th, there have been 37 closed residential sales this year (1/1/2008 - 3/14/2008) in Sea Isle City.  There are currently 48 residential properties Under Contract. There have been 17 residential properties that have gone Under Contract this month (3/1/2008 - 3/14/2008) - more than 1 per day!

How’s the market? You tell me ………

Andrew Fasy

Broker/Owner

NJ Realty, Inc

One of the Main Line’s star realtors has a bone to pick with the media

By Lavinia Smerconish

In any market, people are interested in the value of their home. But I’ve been in real estate for 24 years, and today, the intensity of interest in the market is unprecedented. It’s gotten so I can’t go anywhere on the Main Line without being buttonholed by some panicked acquaintance worried about the so-called “real estate crisis.” I’ve fielded inquiries over dinner at the Guard House in Gladwyne, in the Cosi coffee line in Bryn Mawr, in the frozen foods section at the Genuardi’s in Radnor, and at the movies in Edgmont.

I tell the curious what I know: Yes, the Main Line market has indeed softened, but it’s a far cry from any crisis. The softening has nothing directly to do with the sub-prime market, or the availability of quality real estate or mortgage money. The market forces in effect here are Matt Lauer, Diane Sawyer, Ann Curry and their ilk. Of course, not everyone in the media has nefarious motives. (I should know; I’m married to a member of their ranks.) But the media-driven perception of what’s going on in the marketplace has me concerned.

Let me explain. The din of the network morning shows fill all of our kitchens as we hurry the kids off to school or otherwise begin our day. Inevitably, we see a plethora of so-called market experts on TV telling us the industry is in decline and the worst is yet to come. No doubt this drives ratings. But on the Main Line, there’s no sub-prime failure to speak of, and we haven’t created a real estate bubble so large as to precipitate a burst. So why are we soft? Because we believe what we see on TV. I can’t imagine anyone changing the channel while being told that the greatest investment he or she will make in a lifetime is in jeopardy. There are never any exceptions offered. It’s a blanket prognostication for the country, overlooking the deviations, such as the Philadelphia suburbs.

The minute they say it, we’re on our way to a self-fulfilling prophecy. First, there are the buyers. They hear about the decline in the market and believe it must be the case everywhere. They certainly don’t want to appear foolish or unsophisticated by purchasing a home at anything close to an asking price, no matter how reasonable that asking price may be. So they either make ridiculously lowball offers, or stay home and wait for a complete bottoming-out — or until those same national experts tell them the water is warm enough to jump in again. Sellers, meanwhile, are frustrated about the absence of buyers. They try the usual array of staging, sprucing-up, painting and polishing. And when that fails, they bury St. Joseph in the yard. Finally, they significantly drop their asking price to get the attention of the few buyers who have to move due to life circumstances — ­relocations and new babies and the like.

Prices continue to drop, but because there’s been no public pronouncement that the market has recovered, homes languish on the market while buyers wait for the proverbial bottom to fall out, even though there are great values to be had. We have good inventory on the Main Line; interest rates are at some of the lowest points they’ve been in years; there’s still no shortage of mortgage money, and even jumbo mortgages are available at no penalty to qualified buyers. Sellers remain welcoming, but buyers are stuck in a holding pattern, waiting, waiting, waiting.

They’re waiting for clearance. Not from someone like me, who knows their streets and deals with the market forces in their community every single day. No, they won’t get in the game until somebody deemed a market expert, sitting in a TV studio far away, looks into a camera and tells them the crisis that never existed in their community has ended.

And where in the world is Matt Lauer then? On to the next big story.

The preceding article was printed in Philadelphia Magazine’s March issue. I could have easily replaced any mention of the Main Line with Sea Isle City - the same holds true. While our real estate market softened in 2005 - 2006 like elsewhere in the country, it stabilized and has begun to become active again. The number of homes Sold in 2007 increased by 68% over 2006 units Sold, and the first quarter of 2008 numbers are double those of 2007 so far.  Prices are certainly down from the 2004 highs, mortgage rates are very attractive, there is ample inventory, rentals are booming, and there is constrained demand. Like the author (and most would-be buyers) I’m just waiting for someone to say it’s OK to buy again!

Andrew Fasy

Broker/Owner

NJ Realty, Inc

What does that mean exactly?
OPPORTUNITY!
When there are more Sellers than Buyers, conditions favor the Buyer.
Currently, conditions really couldn’t be better for a Buyer at the Shore. Although the real estate market has begun to turn around; almost twice as many sales have occurred in Sea Isle in 2007 versus 2006, average sale prices are down 10 - 20% since the peak of the market in 2005. There is still ample inventory, and mortgage interest rates have dropped once again (current fixed rate mortgages are in the low 6% range).
What does all this mean to a Buyer?
Opportunity!
What may have cost $650,000 2 years ago, now is selling for $550,000. The real cost of that money is less, as the interest rate on the loan is lower. And, there are more homes on the market to choose from.
Opportunity!
“When people are buying, sell. When people are selling, buy!”
John D. Rockefeller

That’s right. If you’ve had your eye on the perfect Sea Isle get-away, but put off purchasing because you think mortgages are difficult to obtain, go ahead and take the plunge. Despite all the press accounts of an industry in crisis, if you’re a qualified borrower and choose the right lender, there’s plenty of mortgage money available.

What does the investor market have to do with getting a mortgage?

Typically, mortgage lenders sell their loans in the secondary market to generate money to fund new loans. If a loan becomes delinquent, the investor may ask the Lender to buy back the loan. However, if the lender lacks the capital to do so, the problems start. With delinquencies in some areas of the country rising, many investors have backed off purchasing loans, leaving mainly government agencies like Fannie Mae and Freddie Mac willing to purchase mortgages, and then, only if they are within the ‘conforming’ limit of $417,000.

What if you need a mortgage greater than $417,000?

That’s called a ‘non-conforming’ or ‘jumbo’ loan, and they are still readily available. There are mortgage companies and banks that don’t rely on investors to purchase their loans. Therefore, a customer with good credit, the necessary down-payment, income and reserves, will easily qualify for a jumbo loan.

My best advice is to choose a Lender carefully by researching their financial stability. Once you decide on a lender, make sure you fully understand the terms of the loan product you choose. Make sure it fits your needs and comfort zone.

What constitutes the right lender?

Liquidity and the ability to generate it. Most of the mortgage lenders that have failed or are currently in crisis made questionable loans in the past; and as a result, do not have the liquidity to continue lending. With solid lending practices and financial backing many mortgage companies experienced no disruption in lending because they were not dependent on investors in the secondary market to purchase its loans.

Don’t let the headlines scare you. Reliable financing is available to purchase your dream home. Rates are very good and homes are priced to sell. Happy house hunting!

Andrew Fasy

Broker/Owner

NJ Realty, Inc

Market Report

As a Realtor, the question I am asked most these days is: “Has the market hit bottom yet?” My answer today is: “Yes. I think so. I think we hit bottom in early November.” This is my opinion, of course. However, I base my opinion on statistics and what I see, not what I “feel”. What I see is an awful lot more prospective buyers looking, and alot more properties being sold. Those buyers began to come back to the Shore market in mid-November. The activity noticeably increased. Statistically, the first quarter of 2007 has seen more sales occurring (more than double that of 2006, in fact) than we’ve seen since the Spring of 2005.
I’m not exactly sure why the market stopped so abruptly. There are a number of theories. I seem to think there was more than one contributing factor; interest rates began to tick higher, Hurricane Katrina was scary, thefast pace of the market was intimidating for some. There were other possible contributing factors. When I receive my Masters in economics, I may have a more definitive answer. What I know is that the real estate sale market came to a halt at the beginning of the Summer of 2005.
Is the “correction” over? First, it needs to be said that there was a correction. As I look at sale statistics for the past
2 years, I see a 15% decline in average sale prices in Sea Isle City. Some areas of the market have experienced a larger
decline. Land values, for instance, have dropped closer to 20%. I believe that the reason for this is that those prices were driven by developers, speculating on future sale prices. The developers, by and large, are not purchasing anything at all right now.
So, yes, there was a correction. Is it over? Only time will tell of course, but as we head into the Spring there are fewer
homes on the market than the past year and more sales occurring than last year. So, I would have to say yes.
Is now the time to buy? Yes. That’s an easy answer. Why? Well, although the inventory is thinning, there are still a good amount of homes on the market. There is a good selection in all price ranges and locations. Also, although I don’t see “desperate” sellers like last year, there are “motivated” sellers. There are also mostly realistic sellers. It has taken some time, but most sellers have been forced to acknowledge market conditions and reduce their prices.
Further, we are seeing another strong year in the rental market. That income may help you transition into a second home with confidence.
Historically, prices in Sea Isle have increased by an average of 15% per year over the past 25 years. I’m not sure what the near future will bring in terms of appreciation, but unless you plan to “flip” the property, the long term outlook is bright.
Is it time for you to buy a vacation home at the Shore? That’s a question only you can answer. As a Realtor, I can tell you that I have more confidence in the market today than I’ve had in some time, and that the real estate market here at the Shore is stable. There are good deals and good values to be found. And of course there’s the beach!

Andrew Fasy
Broker/Salesperson
NJ Realty, Inc
4914 Landis Ave
Sea Isle City, NJ 08243
www.njrealtyinc.com
800-648-9316 * 609-263-2267
Fax 609-263-3707