Bids Being Accepted for Ocean City Beach Replenishment
January 31, 2008
By Herald Staff
Cape May County Herald.com

OCEAN CITY -- The New Jersey Department of Environmental Protection has started the bidding process for a $6-million beach replenishment project in this resort.

On Jan. 10, 2007 the DEP released bid specifications for the needed beach project that should result in a beach re-nourishment project this spring. The project will result in additional sand on the beaches from the north end of the island to 12th Street.

“This has been one of our priorities and it is good to see that the State is fast tracking this project,” Mayor Sal Perillo stated in a Jan. 28 release.

State funding will pay for 75 percent of the cost and the remainder will be paid by the city. Ocean City funding for this project was budgeted as part of the 2007 Capital Plan.

Once bids are received and revised, the state will award a contract and the contractor should be mobilized by April.

Additional improvements to the stormwater piping on the beaches are also planned as part of this project.

Shore home prices, sales escape brunt of market downturn

Saturday, January 19, 2008
By WILLIAM H. SOKOLIC
Courier-Post Staff

AVALON
Chip Moran just put the family vacation house up for sale.

His father died in July and his mother is in an assisted living facility. Selling the house would help offset the costs for his mother's arrangement, said the Westmont resident.

Moran and his two brothers are asking $2.1 million for the five-bedroom, beach block house on 20th Street. His parents paid about $350,000 for it in the early 1980s.

"If it sells for the price we're looking for, that's the best. But there's no rush on our part. If it doesn't sell and we end up keeping the house, great," Moran said.

The Moran situation typifies the real estate market at the Jersey Shore as the new year unfolds.

While the home-sale market nationwide has gotten hammered since the real estate bubble burst in 2005, the shore has weathered the downturn better than much of the country, said Drew Fishman, president of the New Jersey Association of Realtors.

As a corollary, the repossession market has not hit the shore area, said Lester Argus, president of the Atlantic City & County Board of Realtors. Because so much of the market consists of second homes, neither sellers nor buyers are pressed to transact a sale.

"The shore does better because buying and selling are discretionary," said Richard Perniciaro, director of the Center for Regional and Business Research at Atlantic Cape Community College.

"People are not moving in or out for jobs. Most are in a position to wait a year or two to sell," said Matthew Iannone, president of Freda Real Estate in Sea Isle City.

Yet, real estate experts say the time is better than ever to buy. Prices have come down from the bloated figures of a few years ago. Interest rates are favorable, dipping below 6 percent.

And inventory is high.

"There's more inventory than buyers by a 4-1 margin," said Alex Linsk, a Realtor with Farley & Ferry Realty Inc. in Margate. "Lenders are anxious to get the market started and lend, but they will look a little closer into the buyer's credit history. Still, it doesn't cost anything to make an offer."

Back in 2005, there was a dramatic increase in the number of homes on the market at the same time buyers throttled back, said Randy Leiser, a Realtor with Avalon Real Estate Agency.

"Demand decreased, supply increased, and there were more on the market ever since."

The ups and downs are a cyclical thing, Linsk said. "It happens every seven or eight years. I've seen it three times since the early 1980s."

A lot of professionals, steeped with cash in 2002 and 2003, were sold on real estate.

"They didn't think there would be an end to the boom. Now they're paying the price. They can't sell their properties. Those who spent $500,000 to $1.5 million and thought they can flip with a 20 percent increase, they got hurt," Linsk said.

In 2005, the last strong year at the shore, some 435 units sold in Avalon and Stone Harbor.

Last year, the figures were around 300, Leiser said. But the turnaround began this past year.

"We had a good run in 2007, much better than 2006," Iannone said.

The market experienced a 13 percent drop in the volume of sales in the last year. But prices have not taken the hit other areas did, Argus said.

In Ocean City, the number of sales was up compared to 2006. November and December numbers picked up over the previous year by as much as 25 percent, Fishman said.

"It's not 2005, but it's not bad, and the dollar amounts are well ahead," Fishman said.

Said Iannone, "The asking and selling prices are not far off nowadays. We haven't had a distress sale to any great extent." Certainly, sellers are not going below what they paid for the property, Leiser said.

"One unit came on the market at $740,000 two years ago. It came off for a while, then went back on for $649,000. However, the folks paid $200,000 10 years ago. What has happened, sellers have gotten the message and depending on the situation, are reducing asking prices."

The average sales price has declined from $1.7 million in 2006 to $1.57 in 2007 in Avalon and Stone Harbor.

"The market is not as strong as we'd like it to be," Argus said. "But indicators for 2008 are looking pretty good. Mortgage companies are getting a lot more activity. We hope that translates into sales."

"We believe barring any major economic disaster, there's no cause for a further decline in values during the next 12 months," said Ian Lazarus, president of the Cape May County Association of Realtors.

Moreover, interest rates tend to ease in a presidential election year, he said. Outside of some high-end properties, Realtors aren't seeing bidding wars anymore.

"Buyers can take their time for inspections and due diligence. I think lots of buyers are on the fence figuring when they can get a good buy. Sellers are willing to negotiate," Leiser said.

Not Moran and his brothers. Then again, they don't really have to. Properties over $1.5 million sold even when the market turned, Linsk said.

Shore home buyers come in with their own financing, and larger down payments. They come in with more income. In Ocean City, there was a bidding war for a million dollar home that sold for over the asking price, Fishman said.

So the prospects look good for Moran, a 47-year-old facility manager.

If the house sells, he has a condo on 78th Street in Avalon he'll use more often. Or he and his brothers will get together and buy something else a little less expensive.

"The Jersey Shore is great. I've been all over the country. I'll put Jersey beaches against anybody," he said.

Reach William H. Sokolic at (609) 823-9159 or bsokolic@camden.gannett.com

N.J. Beach Town Scraps Rain Forest Deal
By WAYNE PARRY – 8 hours ago
Associated Press

OCEAN CITY, N.J. (AP) — A plan to buy $1.1 million worth of tropical rain forest wood to fix the boardwalk was scrapped Thursday following a year of delays and protests from local residents and environmentalists around the globe.

"This has become a big embarrassment for the city of Ocean City," said Councilman Scott Ping.

The wood carried a hefty price tag because it was certified as having been harvested responsibly. But environmentalists say such harvesting is still denuding the rain forests and said the city should use domestic wood or synthetic alternatives.

Several council members said they now prefer using domestic yellow pine to cover a block-long section of the boardwalk that has been ripped up in anticipation of the wood being delivered.

"This is amazing, fantastic news," said Rhonda Van Wingerden, head of a local environmental group, Friends of the Rain Forest, which has been fighting the plan for the past year.

In a 6-0 vote, the council passed a resolution declaring the Louis J. Grasmick Lumber Co. of Baltimore in default of its contract with the city. The company said Monday the delays in shipping the wood were due to unavoidable factors, including record low water levels in the Amazon jungle that made it hard to float the logs to mills.

The council does not intend to pay for any of the wood, including the 3 percent of the order it has already received and another 15 percent that is supposedly on its way, Councilman Keith Hartzell said after the meeting.

"Our preference is to send it back," he said.

The only way the city would pay for the wood it has already received is if it were ordered to do so by a judge, he said.

City Attorney Gerald Corcoran, said the council's refusal to pay the bill could lead the lumber company to sue, but said he doubted that would happen.

Ocean City may scrap rainforest wood boardwalk deal
By WAYNE PARRY | Associated Press Writer
Newsday.com
5:04 PM EST, January 14, 2008

OCEAN CITY, N.J. - Since this southern New Jersey beach town broke a decade-old promise last year not to use wood from tropical rainforests on its boardwalk, just about everything that could go wrong with the plan did go wrong.

Environmentalists picketed and the mayor's office was flooded with 50,000 protest e-mails from around the globe.

The wood, which was supposed to be certified as having been harvested responsibly from trusted sources in the Amazon, cost anywhere between 30 and 70 percent more than wood without the certification.

And the Baltimore lumber company that was supposed to have the wood here by the end of the year still hasn't. It blamed, among other things, unfavorable currency exchange rates, and low water levels in Amazon jungles that made it hard to float logs to mills.

Now, after suffering serious damage to its reputation as an environmentally friendly community, the city that calls itself "America's Greatest Family Resort" may be ready to scrap the $1.1 million deal _ even if it means a costly legal battle.

A majority of the City Council is considering voting Thursday night to refuse to pay for the wood, claiming the Louis Grasmick Lumber Co. has defaulted on its contract with Ocean City.

"We've taken this entire community down a path of divisiveness, for reasons I still don't understand," said Councilman Jody Alessandrine. "It has put our city on the map and on the Internet and in the newspapers for all the wrong reasons. Some people are just unwilling to admit their mistakes."

That was a reference to Mayor Sal Perillo, who since last January has championed the use of Brazilian ipe wood for a block-long section of the boardwalk. He likes the durability of the wood, and says the environmental certification it carries proves the city is doing the right thing. He also said breaking a contract could expose the city to damages, and hurt its reputation among other companies that do business with it.

Perillo did not immediately return a call seeking comment Monday.

Ten years ago, Ocean City voted never to use tropical rainforest wood again for its 2{ mile-long boardwalk that is a mixture of ipe and domestic yellow pine, citing the damage that logging operations are doing to the Amazon. But last January, it decided that using wood certified as having been harvested responsibly would be OK.

Ipe is a flowering tree that towers over others in the forest canopy and can grow to 100 feet. Because it lasts longer than pine, it has been used in boardwalk projects from coast to coast, including Atlantic City, New York, Baltimore, Chicago, Miami Beach and Long Beach and Santa Monica, Calif.

Ocean City bought wood certified by the Forest Stewardship Council, a group of industry and environmental groups who seek to improve forestry management practices. Certification means that loggers operate in ways designed to damage the ecosystem as little as possible, including not over-harvesting or wasting trees.

But environmental groups are split over whether that represents true progress or just a fig leaf covering for practices that still denude the rain forest.

Matt Miller, a sales representative for Grasmick, said the company has asked Ocean City for more time to deliver the wood. He said an additional shipment left for Ocean City on Monday, and would not comment on what the company would do if Ocean City refuses to pay for the wood.

So far, only about 3 percent of the wood has reached Ocean City. And only part of that bears stickers claiming that it meets responsible forestry guidelines, said Georgina Shanley, one of many local activists trying to get the city to kill the plan.

"We look ridiculous in the eyes of the world," she said. "We have all these wonderful initiatives _ green cars and solar buildings, but then we have this absolutely ramming through of something that is incredibly damaging to the environment."

The delay in delivering the wood has left a gaping hole in a block-long stretch of the boardwalk, which was ripped up in preparation for the new boards. And several councilman are worried that if work doesn't start immediately, the boardwalk won't be ready by Easter _ the traditional start of the spring season for boardwalk merchants.

"We all agree that the boardwalk has to be ready by Easter, even if it means we have to use a different kind of wood," said Councilman Greg Johnson. "If a correction needs to be made, we will make it."

Yahoo! Travel: December 31, 2007

Yahoo! Travel's biggest domestic ''Movers & Shakers'' -- destinations that got the biggest increase in page views in Yahoo! Travel Guides -- were Lancaster, Pa., Ocean City, N.J., South Lake Tahoe, Calif., Wildwood, N.J., Helen, Ga., and Pigeon Forge, Tenn.

Housing market should weather dire forecasts
Published: Sunday, December 30, 2007

The latest housing market forecast from Moody's Eco-nomy.com predicts Ocean City and Atlantic City will see home prices fall more than most anywhere outside the overheated Sun Belt.

It predicts that the median price - at which half are higher, half lower - for single-family homes in Ocean City will plunge by 24.9 percent from now until early 2009.

For Atlantic City, a drop of 18.6 percent in home prices is expected.

Nationwide, Moody's Eco-nomy.com expects home prices to decline 13 percent.

Those are shockingly worrisome numbers. But how likely are they to be accurate?

The forecast for next year by the National Association of Realtors is for the median price of an existing home to increase by 0.3 percent, after falling 1.9 percent this year.

The Realtors expect prices in the Northeast to do better than average.

"The improvement in the Northeast reaffirms a trend apparent for some months now that shows signs of recovery, noteworthy because that was the first region to slump," Lawrence Yun, chief economist for NAR, said in a statement accompanying the forecast.

That outlook seems as optimistic as the Moody's view seems pessimistic. How can these be reconciled?

It's worth noting that Moo-
dy's Economy.com issued a similarly distressing forecast last year for the two local markets.

It predicted home prices in Atlantic City would drop 12.2 percent by early 2008, and those in Ocean City would fall 7.6 percent by 2010. (It takes either courage or foolishness to predict where a volatile market will be in four years.)

Weighing in on the pessimistic side is the Standard & Poor's/Case-Shiller home price index, which this week reported that nationwide home prices dropped 6.7 percent in October. That index tracks 10 major metropolitan areas.

The National Association of Realtors too have reported price declines this year, but much smaller ones. Most recently, it said prices in the third quarter declined 2 percent from the same period the year before.

In Atlantic City, however, it found that the median home price increased 6.2 percent from the prior year for the third quarter.

Part of the explanation for the wide discrepancies in these surveys is that they use different methods for tracking prices.

The Case-Shiller index, for example, tracks particular houses and compares how the prices for those houses change. The Realtors, on the other hand, round up all the housing prices for a survey period - so the character (and therefore value) of the housing being sold can change from period to period.

There's another housing price database that is fairly comprehensive but also tracks price changes in particular homes to ensure less volatile data.

That's the Office of Federal Housing Enterprise Oversight's House Price Index, and it seems to support the view of the Realtors.

The OFHEO's index for the third quarter found that prices in Atlantic City were 0.78 percent higher than in the prior month. Those in Ocean City were 0.54 recent higher.

For the nation as a whole, the OFHEO found that prices declined 0.4 percent from the second quarter, but were up 1.8 percent from the year-ago period.

The southern New Jersey housing market saw a big runup in home prices during the housing boom earlier this decade, as did many (particularly resort) areas around the nation.

But our market was less driven by investors fleeing the declining stock market than other areas and more driven by two factors particular to our geography and economy.

The first is our proximity to the huge populations of northern New Jersey and New York, in which a large cohort of boomers is looking for a retirement place. We're convenient to where they've spent their lives, and our home prices are substantially lower than theirs.

The second is the substantial expansion of the casino industry, which provides a level of confidence in the area's growth for the next decade.

As we've been saying for the couple of years, these factors are mitigating the effect on our area of the national housing slump. The sales and price figures have so far born that out.

I expect that to continue, and for our housing market to do as well or better than the National Association of Realtors expects, and far better than the more pessimistic forecasters.


To e-mail Kevin Post at The Press:
KPost@pressofac.com