Forecast Turns Bit Cloudier

The Philadelphia Inquirer; 6/26/2006

Jun. 26--Without a doubt, the Jersey Shore real estate market has had a fantastic run for the last eight years. Up and down the coastline, from the top of Ocean County to the tip of Cape May, construction boomed, sales exploded and prices skyrocketed.

Stories abound of overnight fortunes made by investors, like the one who flipped an Ocean City property in one day last year and made a $540,000 profit on a $4.1 million house.

An Inquirer analysis of 27,709 home sales last year in Atlantic, Cape May and Ocean Counties showed that about 1,000 houses sold for $1 million or more.

And five towns -- Stone Harbor and Avalon in Cape May County and Bay Head, Harvey Cedars and Mantoloking in Ocean County -- had median home prices of $1 million or more, the analysis showed. (The median is the middle value; half the houses sold for more, half sold for less. In any town, a drop in median price does not mean prices fell for all houses there.)

But this picture of sunny times is turning partly cloudy, observers of the Shore market say, as higher interest rates are beginning to dampen sales, and condo construction, mostly involving investors, adds to a growing surplus of properties.

"Whenever interest rates rise, the second-home market is the first one to take the hit," said Fred Glick, president of US Loans Mortgage L.L.C. in Philadelphia.

Long-term rates climbed to 6.71 percent Thursday, Freddie Mac reported, the highest since May 31, 2002. Adjustable-rate mortgages are at 6.4 percent.

"It's the condo and lower end of the Shore market that's taking a hit," said Paul Leiser, a broker at Avalon Real Estate. "These are the buyers who depend on lower interest rates to balance two mortgages, and with rising interest rates, they can't do it.

"We've sold fewer units, but our dollar volume in the first quarter was higher than it was in the first quarter of 2005, which was a record year," Leiser said. "It's the million-dollar-house purchases that push up the medians, and those are usually cash. And when you are talking about million-dollar houses, consider that an older rancher three blocks from the beach in Stone Harbor is $1.4 million."

The Inquirer's analysis showed the median price of homes in the three counties grew at a slower pace in 2005, to $274,000, a 16 percent increase over 2004 compared to a 21 percent jump the year before.

Only Atlantic County was able to maintain the same rate of growth from 2004 to 2005; its median home price rose 24 percent, to $223,357.

In Cape May County, the year-over-year median gain was less than half the increase experienced a year earlier. The median was up 11 percent in 2005, to $391,000, compared to a 26 percent gain in 2004.

Ocean County's median grew 15 percent in 2005 compared to 20 percent in 2004.

Fewer than 200 more houses were sold in 2005 than in 2004, an indication of declining demand. Another sign: Thirty-one municipalities had median increases of more than 20 percent in 2005, compared with 44 in 2004.

Although sales comparisons for the first quarters of 2006 and 2005 from the New Jersey Division of Taxation were incomplete, indications are that the market appears to be slowing further this year.

Sales in Cape May and Ocean Counties in the first quarter of 2006 were lower by a couple hundred sales each than in the first quarter of 2005. Atlantic County sales were a bit higher.

Market observers said Atlantic County, which for the last several years has been evolving into a bedroom community for Atlantic City, also is fast becoming a suburb of Philadelphia.

Major developers such as D.R. Horton, K. Hovnanian, and Ryan Homes have been building single-family developments and active-adult communities -- not necessarily with ocean views.

"We call them 'off-shore vs. on-shore,' " said Jerome DiPentino, broker at Premier Properties Real Estate in Longport. "More and more people are choosing to live here year-round, and that is stabilizing the market, although high-end sales in Margate and Longport also have been skewing the median upward."

Things don't seem as rosy in Ocean City, the scene of numerous teardowns and massive development since the mid-1990s. As of mid-June, there were more than 1,700 listings on the Ocean City Multiple Listing Service (MLS).

"They're saying that Ocean City is overbuilt by two years," DiPentino said. "That may be conservative."

Jay Lamont, the host of "All About Real Estate" on WPEN-AM (950), who has studied and owned real estate in Ocean City for about 40 years, said, "I have never seen anything even close to this debacle. Many legitimate and qualified buyers are waiting for fall, for the lender REO [real-estate-owned] listings and foreclosure sales on failed developer loans."

Weekly sales reported to the Ocean City MLS are 80 percent to 90 percent lower than they were in spring 2005, with seven or eight sales a week, he said.

What's going on?

"The short-term investors at the Shore were in the condo market primarily, and they're the ones pulling out," said Mark Zandi, chief economist at Moody's Economy.com in West Chester. "They don't buy multimillion-dollar homes."

(In Ocean City, condos made up a little more than half the 1,314 sales in 2005, The Inquirer analysis showed. The median condo price: $529,950, up 14 percent from 2004.)

Oversupply also seems to be a problem elsewhere in Cape May County.

Paul Schlimme, vice president of MLS Realty in Cherry Hill, said that between Jan. 1 and May 31 there were 189 listings on the Avalon MLS, with about nine houses selling per month.

"That means there is a 21-month supply in Avalon, and it is getting worse," Schlimme said. By mid-June, 29 new single-family houses were listed, and just 13 sold, "which means there are 16 more properties competing..."

Over the course of the 1998-2005 Shore boom, Wildwood, West Wildwood, and North Wildwood registered a more than 250 percent increase in median prices, The Inquirer analysis showed. (So did Stone Harbor, Longport, Avalon and Harvey Cedars.)

The Wildwoods, too, were a draw for investors, who razed motels and filled empty tracts with condos. But with for-sale signs sprouting and interest apparently tailing off, that boom could be over, local market experts say.

With summer here, the Shore market could get even slower.

In Ocean City, Lamont said, "open houses are held each weekend, sometimes as many as eight per block on Asbury Avenue, with almost no legitimate buyer traffic showing up even to use the bathrooms."

How This Analysis Was Conducted

The Inquirer's home-price analysis was based on nearly 250,000 residential sales in 2004 and 2005. Home-sale information was obtained from the five Pennsylvania counties and the New Jersey Division of Taxation.

Only sales at fair-market prices of $10,000 or greater were included in the analysis of single-family homes, condominiums, townhouses, and twins, or duplexes.

The median home price is the amount at which half the sale prices are more and half are less. The percentage change reflects the difference in the median price from 2004 to 2005.

A town with fewer than 10 sales is marked "N.C." because the median and percentage change were not calculated. Towns with no sales are marked "N.S."

All numbers are rounded to the closest whole number.

Contact real estate writer Alan J. Heavens at 215-854-2472 or aheavens@phillynews.com.

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Copyright (c) 2006, The Philadelphia Inquirer

O.C. lifeguards to extend hours on three beaches
Press of Atlantic City
By MICHAEL MILLER Staff Writer, (609) 463-6712
Published: Saturday, June 24, 2006
Updated: Saturday, June 24, 2006

OCEAN CITY — Lifeguards on three downtown beaches will be on duty later in the day starting this weekend.

The Beach Patrol will guard beaches at Eighth, Ninth and 12th streets until 7 p.m. on Fridays and Saturdays this summer.

The extended-hours program usually begins over the busy July 4 holiday weekend. But the city decided to launch its after-hours lifeguard program a week early this year because of unusually strong rip currents, Business Administrator Richard Deaney said.

A 7-year-old boy from Philadelphia drowned Sunday while swimming on an unguarded Seventh Street beach about an hour after lifeguards left for the day. Police said the child and his younger brother were caught in a rip current. The younger boy was pulled to safety.

On Tuesday, police and firefighters rescued a swimmer in distress on an unguarded 10th Street beach after lifeguards left for the day.

“The ocean has been rough this week. We decided to start them a week early,” Deaney said.

Beach Patrol Lt. John McShane said the department always planned to extend beach hours this weekend. He said the after-hours rescues this week had nothing to do with the extended hours.

“We always wanted to do the weekend before the Fourth of July as a dry run to make sure our procedures and policies are in place,” he said.

Meanwhile, police on all-terrain vehicles will patrol downtown beaches in the evenings this summer, in part to watch for swimmers in distress.

“We'll notify the police if there has been a troublesome area during the day so they can keep their eye on it,” McShane said.

Deaney stressed that the police officers are not lifeguards. The Beach Patrol warned that swimmers should swim only off guarded beaches.

Lifeguards are counting visitors several times a day this year to monitor beach activity. The city is trying to see if beachgoers are staying later in the day as some people suspect. The city plans to use this information to modify lifeguard hours next year.

The city has options, Deaney said. It could guard a few downtown beaches later in the evening or have lifeguards start and finish an hour later to cover all beaches into the late afternoon.

The city's after-hours program on Fridays and Saturdays and post Labor Day will cost between $15,000 and $20,000 this year, he said.

McShane said the extended hours will give late-arriving visitors a chance to enjoy the ocean safely on their first day of vacation.

“The check-in time is 4 p.m. They can run down and get wet before nightfall,” he said.

To e-mail Michael Miller at The Press:MMiller@pressofac.com

OCEAN CITY CAMPAIGNS
Curb the cost
Press of Atlantic City
Published: Wednesday, June 21, 2006
Updated: Wednesday, June 21, 2006

Ocean City has a refreshing and exciting idea — to be the first town in the state to adopt its own public-finance law for local political campaigns.

The town is ripe for such a law. Mayoral elections in Ocean City have become increasingly expensive, reaching a record $250,000 in spending this spring. There is momentum in the city for public financing, which is aimed at lowering the cost of elections and cutting the ties between politicians and wealthy special interests.

Under the plan, the city would set up a public-financing fund; candidates who qualify by collecting enough signatures and enough small contributions of $5 could opt for public financing. They would then be restricted as to how much they could spend and would not be able to raise any additional money.

It's a worthy, welcome concept that's being tried as well on the state level.

The only problem is that city Solicitor Gerald Corcoran says it's illegal on a municipal level. State law does not allow municipalities to dedicate money in their budgets for that purpose, he said.

Well, lawyers can and do disagree. Two lawyers at an Ocean City Council meeting last week — a local attorney and an out-of-state lawyer who helped draw up the ordinance — maintained that such a law is, indeed, legal.

The ordinance failed by a 3-3 vote during a sometimes-testy meeting.

Corcoran's opinion may be right. But the city could find out. Surely it would not cost much, if anything, to seek an opinion from the courts or from the state attorney general's office.

Even better, state lawmakers should simply change the law now to specifically allow towns to dedicate funds to public financing of local elections, clearing up any ambiguity on the issue. Assemblyman Jeff Van Drew, D-Cape May, Cumberland, is hardly shy about introducing legislation to solve problems in his district. We're sure he or another lawmaker could put this bill together pretty easily.

Public financing is a great idea — but it's important the city do it correctly, so it isn't open to a court challenge. State lawmakers should support the idea of offering this option to towns. After all, they're already trying it themselves.

Two after-hours rescues prompt police to close Ocean City beach
From Press of Atlantic City staff reports
Published: Wednesday, June 21, 2006
Updated: Wednesday, June 21, 2006



OCEAN CITY — Police and fire crews rescued a swimmer in distress at about 6:30 p.m. Tuesday, about an hour after being called to another emergency at the same beach.

Emergency crews were called to the 10th Street beach at about 5:30 p.m., just 30 minutes after Ocean City Beach Patrol left the beach for the day. But when they got there, family members had already pulled the swimmer safely from the water.

The adult, who was not identified, was caught in a rip current and swept into deeper water around 10th Street.

About an hour later, police and fire crews were called to the same beach for another report of an adult swimmer in distress.

This time, police officers and firefighters entered the water to rescue the stranded swimmer who was caught in a similar rip current. The swimmer, who was not identified, was pulled to safety and did not require medical attention, police said.

Police officers remained at the 10th Street beach until dusk to keep swimmers out of the water there.

On Sunday, a 7-year-old boy from Philadelphia drowned off an unguarded beach at Seventh Street.

Beach access in N.J. is extensive, but obstacles remain
Posted by the Asbury Park Press on 06/9/06
BY LEANN FOSTER
With another summer upon us, residents across the Garden State are preparing for the annual pilgrimage to the Jersey Shore. But before you settle into that beach chair, you ought to reflect on how lucky you are to access the beach.

In New Jersey, you don't have to be a member of a private beach club or a full-time resident of a quaint Shore town to be able to get to the beach in the summer, to park, to walk through dunes or cross a boardwalk in order to get to this year's favorite spot for fishing, surfing or just plain relaxing.

No, the public has a protected right to enjoy the best the summer has to offer. You'll pay a badge fee, and sometimes you might have to walk a little farther than you'd like in order to get to the restroom or to find those cheese fries. But in general, New Jersey's beaches are available to you for your use and enjoyment.

It's been a year since the New Jersey Supreme Court's decision in the Atlantis Beach Club case, where the Public Trust Doctrine was employed to order public access to a private beach from which the public was being forcibly excluded. The decision also recognizes that beach access consists not just of access points — places along the shoreline where you and your family can get to and from the beach — but something of a package of opportunities that includes meaningful use and enjoyment of the water, the wet sand and a reasonable amount of the dry sand area.

Similarly reinforced is the necessary relationship between your badge fee and the costs of maintaining the beach for public access and use. You'll still think the price increase for this year's badge is outrageous, but it must by law be justified by the municipality and related back to the cost of lifeguards, trash pickup, beach security, badge checkers and other people whose job it is to make your summer at the Shore pleasant and safe.

Of course, public access in New Jersey isn't perfect.

There remain beaches from Monmouth County to Cape May that are not as public-friendly as they should be. Here, private clubs or private residences dominate waterfront property, and "Keep Out" signs signal the message that the public is not at all welcome. In these communities, the public must search, sometimes to no avail, for select and often overcrowded spots where a family can settle in for a day.

With New Jersey's rapidly privatizing shoreline, this exclusivity is not only a current problem, from a legal and a sheer convenience perspective, but something that, unless the public is vigilant, is likely to get worse. Many of these exclusive communities are located on beaches that have been built up with public taxpayer dollars to secure the homes of the very residents whose "No Trespassing" signs make a simple trip to the beach a challenge for out-of-towners and inland residents alike.

Limitations on parking and the availability of restroom and concession services also continue to make life difficult for the public in some beach towns. And let's not forget the "redeveloping" towns where many longtime residents are finding themselves denied physical and even visual access to beaches they grew up on.

Also problematic are our bayside beaches and waterfront areas, where access is very limited, signage to indicate public access areas is scarce and public marinas are every year becoming fewer and farther between as they give way to private, once again exclusive, condominium developments.

Despite these shortcomings, the future is bright in New Jersey for public access and the public trust. This year, we find the New Jersey Department of Environmental Protection refusing beach nourishment dollars for towns that deny adequate public access, holding to a standard that's not only fair but consistent with the DEP's historic practices and the guidelines of the U.S. Army Corps of Engineers for the nourishment program.

With news of shorefront communities from northern Ocean County to Long Beach Island losing beaches to erosion, and related stories raising concerns about the safety of people and property during this year's hurricane season, the DEP's efforts to prioritize access sets an important precedent for the implementation of a program that will no doubt play a significant role in New Jersey's coastal future.

The DEP is also working to improve outreach tools so the public can more readily know where access points are located and where support facilities like restrooms and parking are available. They may not be able to guarantee you water temperature in the 70s, but the state is working to secure our public trust legacy. Coastal grass-roots groups are also doing their part to pry open the doors to the public in communities where access, parking and other necessary support services are difficult, uncomfortable or impossible to come by.

So whether you choose Belmar, Lavallette, Island Beach State Park, Surf City or Wildwood, get out there and enjoy. Make it a point this summer to make the most of your right to access the beaches and waterfront areas across New Jersey.

Leann Foster is policy director of the American Littoral Society, a coastal conservation organization headquartered on Sandy Hook.

People come out to support Greate Bay development
By MARTIN DeANGELIS Staff Writer, (609) 272-7237
Press of Atlantic City
Published: Friday, June 9, 2006
Updated: Friday, June 9, 2006

SOMERS POINT — A parade of people spoke up Thursday in favor of Greate Bay Country Club's plans for a condo development on part of its property, but opponents questioned where that show of support came from.

The backers praised everything from the golf course's environmental commitment to its support for Boy Scouts to its bolstering of its neighbors' property values. And most got a loud round of applause after they addressed City Council, just a few days after Greate Bay's owners got back into the news by applying to join an affordable-housing suit another developer filed against the city.

Still, a few opponents argued that many of the people in the show of support make their livings at Greate Bay. Two of the supporters agreed they are country-club workers but said they also live in the neighborhood.

Ruth Natello, who said she got signatures from 250 neighbors last year opposing development on the 83-year-old course, said after the meeting that owners “packed” the room with supporters to argue their cause.

But owner Gary Massey dismissed that accusation.

“There were a few who were employees, and they acknowledged they were employees,” Massey said. “Our employees are coming forward and our members are starting to come forward and people who live in the golf course area are going to come forward, and that's what you saw tonight.”

The owners have scheduled a June 27 public meeting at the country club to show off their plans for building as many as 550 housing units on 30 acres of the 150 they own. They say their plan would let them keep an 18-hole course by rerouting some and reclaiming a waste area, and they would raze their current clubhouse and build a new one. The closest neighbor to any new building would be 500 feet away, Massey says.

But Natello, the only person to publicly speak against Greate Bay's plans, charged that Massey and his partner, Mark Benevento, were opportunists when they jumped into the ongoing suit against Somers Point last week.

“Every single taxpayer in the city is going to have to bear the burden of them trying to enrich themselves,” Natello said.

Golf-course supporters warned, though, that if the owners can't make a profit on their investments, they could sell the course to developers who would want to build far more homes. They also argued that a deed restriction on the course often cited by opponents is invalid because other housing developments were built on the property despite that clause.

Bob Viola, of Greate Bay Villas, which borders on the course, said most people look at a golf course and see “grass, trees and open space. But a developer sees hundreds, perhaps thousands of homes.”

To e-mail Martin DeAngelis:
MDeangelis@pressofac.com

Beach property owners should pay a bigger share for insurance
The News Journal - Wilmington,DE,USA

Payouts in the aftermath of Hurricane Katrina were overwhelming. The only thing that will save the program is congressional authorization to impose large premium increases, bigger deductibles and other limitations. Unless, of course, Congress can be talked into pushing the country further into debt to save some exclusive beachfront property.

Congress should take a hint from private insurers. The price of insurance is going up near Delaware's beaches -- as it is up and down the Atlantic and Gulf coasts.

For private insurers, last year's hurricane damage was a costly lesson. Premiums to protect coastal homes from hurricane-force winds are rising, as are deductibles. In many cases, insurers are canceling policies. They don't want to subsidize risk.

However, some people want the federal government to help pay for a relative handful to live near the beach.

But that is getting too expensive. According to a Brookings Institution report, seven of the 12 most costly natural disasters in American history happened in the last two hurricane seasons.

Global warming or not, the region is in another decades-long cycle of powerful hurricanes. Unlike the last such cycle more than 25 years ago, the beaches along the Atlantic and Gulf of Mexico are thoroughly built up. A hurricane that might have just kicked up sand decades ago now means widespread death and destruction.

The only sensible thing for Congress to do is to raise those rates.

Congress is also considering limiting subsidized flood insurance to owner-occupied housing in the affected areas. Vacation homes and rental properties would not be subsidized.

Congress should recognize reality and increase the payments.

N.J. shore a scary place, preparedness official warns
By MARTIN DeANGELIS Staff Writer, (609) 272-7237
Press of Atlantic City
Published: Wednesday, June 7, 2006
Updated: Wednesday, June 7, 2006

EGG HARBOR TOWNSHIP — He came to learn, and he came to warn.

And Richard Canas, the new state director of Homeland Security and Prepar-edness, learned on a fly-over tour of the shore Tuesday that from the air, the view of life on New Jersey's coastline is “very impressive, and probably scary.”

The frightening part for someone new to New Jersey included “the congestion, the narrowness of the strip (of land) and the fact that there's only one way in and one way out,” Canas said, after he and a dozen or so other state officials stepped off a National Guard helicopter at the Tony Canale Training Center, on Egg Harbor Township's mainland.

And that difficulty of getting away from the crowded coast led to the most ominous warning of the visit, which Canas and his colleagues tied to the start of this year's hurricane season: If a major hurricane is headed for New Jersey, and emergency officials order evacuations of the coast, “We're looking at a lot of deaths if people don't leave those areas,” Canas said.

The good news is that there will be warnings for days in advance. And those warnings will come in several different forms, including possibly some very personal ones.

“If we have to personally go out and knock on every one of those doors, we will do that,” Canas said. “And we will not be crying wolf. ... You have to go. That's not an option.”

Vince Jones, Atlantic County's emergency management director, said later that police in Atlantic City and Ventnor have made door-to-door checks on residents in past evacuations. And Freeholder Frank Sutton, a former Egg Harbor Township committeeman, added that police in his hometown will do the same if needed.

But evacuations cause their own sets of problems, officials acknowledged.

Mariana Leckner of the State Police emergency management section said a traffic consultant is working on new estimates of how long it would take to clear out specific areas of New Jersey. But the current figure is that an evacuation of Cape May County would take 30 to 34 hours, she said. Atlantic County would take another 24 hours.

Emergency officials know they can speed up that process if they have to, for example by shutting down all eastbound traffic on the Atlantic City Expressway and opening those lanes to a westbound exodus. But Leckner added that's not a decision anyone wants to make lightly, because an all-westbound expressway slows emergency responders and supply trucks from getting to the sites of the expected worst disasters, along the coastline.

Another way state officials try to facilitate fast getaways will be by announcing them as early in the day as possible — ideally at 5 or 6 o'clock in the morning — to give people as much daylight as possible to leave in, Leckner said.

State Police Major John Hunt, who visited New Orleans and the Gulf Coast after Hurricane Katrina devastated that area, talked about another evacuation-produced problem — gasoline shortages for all those people trying to drive away at once.

Hunt said state officials have plans for making sure people have enough gas to follow orders and get far enough inland to get out of danger, but he noted he has a personal rule for not getting caught short on fuel:

“I tell my wife and my daughter to always have at least a quarter-tank of gas,” in case the order comes to evacuate, said Hunt, the commander of the special-operations section in the State Police homeland security branch.

He also made a pitch for residents to consider joining or starting Community Emergency Response Teams in their towns. CERT volunteers are trained in basic first aid, disaster preparedness and other skills that help them help police and firefighters and other officials deal with emergencies.

But several officials stressed that no matter how many concerned volunteers and trained professionals there are, residents have to take responsibility for their own safety and preparations for storms.

“All emergencies, like politics, are local,” Canas said. “So it's really up to you to prepare locally for this.”

He warned that state, county and local officials have to be prepared for their areas to survive for at least three days before the federal government can start getting help to New Jersey.

And individual residents have to get ready the same way: Officials advised that that if a hurricane or other major emergency strikes New Jersey, you should have at least three days worth of water and food on hand — because that's how long you should expect to be on your own before help can get there.

To e-mail Martin DeAngelis at The Press:MDeangelis@pressofac.com