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Jersey Shore Real Estate Market Update August 2014

Jersey Shore Real Estate Market Update August 2014

By Ian Lazarus

How is the Real Estate Market?  It is a good time to buy and an even better time to sell!  Predicting the real estate market is just like predicting anything else, it is best to look at its history .

So I went into my home office and checked out the local sales data from the past 15 years.  I looked at sold and new listing information (to see what the supply and demand) in Cape May County. Then I identified a few of the monumental mania and crisis points by date to the last real estate cycle of 1983-1998.

The top of the last real estate market (December 2004-December 2006, depending the town.) was the period that started the rollover and decline. Inventory was high and was also priced very high.  As a result, the buyer’s stopped buying at these over extended prices.

The steady decline of “sold properties” and prices took place in the years 2007-2010. The crisis point was when the investment banking debacle and the mortgage industry problems collided. With many properties having values below mortgage principle balances this was putting stress on the banks when it came to defaults. They were considered under water.

This was becoming more apparent. Investment banks were holding billions of dollars of worthless mortgage backed securities and this caused the financing market to seize up and stop. Interest rates rose and jumbo loans (over $417,000) were almost impossible to get or were at extremely higher rates. Panic set in throughout Wall St. and Main St. People couldn’t sell and people couldn’t buy and prices continued to slowly decline.

To make matters worse, lenders foreclosing and now being the owners of distressed properties, which needed to be resold in order to clean up their balance sheets which put additional pressure on the market.

The first ray of light was in late 2011 when interest rates hit an all-time low (down to 3-3.25% rates for a 30 year fixed rate). We saw demand pick up and started buying the remaining distressed supply of inventory.

Our market was stabilizing, when Hurricane Sandy came through and we experienced a large decline in transactions due to the uncertainty of flood insurance coverage caused by new rules from FEMA.

Since the Spring of 2013 when FEMA introduced the new area flood maps the market began to stabilize and we saw inventory decline, prices increase and days on the market reduced.

This year has been interesting with sales volume lower, prices have still been steady and with less homes for sale, we consider this a normal market.

So what’s happening next?

If history repeats itself the next year or so, this new market should bounce around and go sideways.

The Jersey Shore market is poised for a recovery over the next ten years!

A two main points for this recovery is the shrinking rental market and the “Baby Boomer” population. The Baby Boomer population could have the biggest positive effect on the Jersey Shore real estate housing market. With the Baby Boomers using their shore homes more often, renting less or even retiring in them, will bring on a shortage of beach rentals to an increase in sales and an increase in rental rates over the next 10 years.

Depending on your short term and long term plans this is one of the most important times to meet with your Realtor, Accountant and Financial Advisor to make the right moves. If you are thinking about selling or buying contact me so I can bring my team of experts to help you make the right choices.

 

 

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Sea Isle City, NJ l Sold Property Annual Analysis 2001-2013

Posted on Wednesday, August 6th, 2014 at 8:16pm.

From 01/01/2013 to 12/31/2013:
Average # of Units Sold Per Month:  21
Average Selling Price:  $671,633
Median Selling Price:  $615,000
Average Days on Market:  183  (6 .1 months)
Total Properties Sold in 2012:  249
(Total solds includes retail & vacant land)
From 01/01/2012 to 12/31/2012: From 01/01/2011 to 12/31/2011:
Average # of Units Sold Per Month:  23 Average # of Units Sold Per Month:  17
Average Selling Price:  $600,188 Average Selling Price:  $634,089
Median Selling Price:  $565,000 Median Selling Price:  $590,000
Average Days on Market:  218  (7 .3 months) Average Days on Market:  212  (7 months)
Total Properties Sold in 2012:  279 Total Properties Sold in 2011:  201
(2012 was about 39% more sold than in 2011) (2011 was about 9% more sold than in 2010)
From 01/01/2010 to 12/31/2010: From 01/01/2009 to 12/31/2009:
Average # of Units Sold Per Month:  16 Average # of Units Sold Per Month:  15
Average Selling Price:  $651,265 Average Selling Price:  $631,905
Median Selling Price:  $600,000 Median Selling Price:  $615,000
Average Days on Market:  213  (7.1 months) Average Days on Market:  203  (6.8 months)
Total Properties Sold in 2010:  183 Total Properties Sold in 2009:  179
(2010 was about 2% more sold than in 2009) (2009 was about 3% less sold than in 2008)
From 01/01/2008 to 12/31/2008: From 01/01/2007 to 12/31/2007:
Average # of Units Sold Per Month:  16 Average # of Units Sold Per Month:  19
Average Selling Price:  $641,674 Average Selling Price:  $774,602
Median Selling Price:  $650,000 Median Selling Price:  $720,000
Average Days on Market:  221  (7.4 months) Average Days on Market:  231  (7.7 months)
Total Properties Sold in 2008:  183 Total Properties Sold in 2007:  236
(2008 was about 22% less sold than in 2007)
From 01/01/2006 to 12/31/2006: From 01/01/2005 to 12/31/2005:
Average # of Units Sold Per Month:  14 Average # of Units Sold Per Month:  23
Average Selling Price:  $829,723 Average Selling Price:  $790,277
Median Selling Price:  $790,000 Median Selling Price:  $795,000
Average Days on Market:  207  (6.9 months) Average Days on Market:  204  (6.8 months)
Total Properties Sold in 2006:  162 Total Properties Sold in 2005:  258
From 01/01/2004 to 12/31/2004: From 01/01/2003 to 12/31/2003:
Average # of Units Sold Per Month:  26 Average # of Units Sold Per Month:  26
Average Selling Price:  $677,517 Average Selling Price:  $531,068
Median Selling Price:  $650,000 Median Selling Price:  $529,000
Average Days on Market:  161  (5.4 months) Average Days on Market:  175  (5.8 months)
From 01/01/2002 to 12/31/2002: From 01/01/2001 to 12/31/2001:
Average # of Units Sold Per Month:  30 Average # of Units Sold Per Month:  21
Average Selling Price:  $420,340 Average Selling Price:  $374,750
Median Selling Price:  $390,250 Median Selling Price:  $364,000
Average Days on Market:  194  (6.5 months) Average Days on
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Sea Isle City sold and transferred properties by month for 2009-2014

Sea Isle City sold and transferred properties that went Under Contract or Sold in the following years.
 Jan.   Feb.  March  April  May  June  July  Aug.  Sept.  Oct.  Nov.  Dec.  Total:
 2014   Sold or Under Contract 13 15 22 27 17 14 21 ** ** ** ** ** 137
 2013 Sold or Under Contract 22 10 24 20 22 15 16 16 28 31 18 54 276
 2012 Sold or Under Contract 33 28 30 27 31 17 24 18 25 28 12 10 283
 2011 Sold or Under Contract 18 34 25 19 14 13 16 17 14 25 11 8 214
 2010 Sold or Under Contract 18 12 15 21 38 16 6 9 15 11 13 5 179
 2009 Sold or Under Contract 7 22 17 17 24 10 12 16 17 24 11 13 190
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Billionaire says Home Ownership the Best Investment Possible

REAL ESTATE NEWS | FRIDAY, JULY 18, 2014

 

John Paulson, a billionaire hedge fund manager, says that for those looking for the best investment possible, they need to look toward home ownership.

 

 

 

Who is John Paulson?

 

Paulson is the person who, back in 2005 & 2006, made a fortune betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell. What do others think of Paulson?

 

According to Forbes, John Paulson is:

 

“A multibillionaire hedge fund operator and the investment genius.”

 

According to the Wall Street Journal, Paulson is:

 

“A hedge fund tycoon who made his name, and a fortune, betting against subprime mortgages when no one else even knew what they were.”

 

At the Delivering Alpha conference, presented by CNBC and Institutional Investor, Paulson said: “I still think, from an individual perspective, the best-deal investment you can make is to buy a primary residence that you’re the owner-occupier of. Today, financing costs are extraordinarily low. You can get a 30-year mortgage somewhere around 4.5 percent. And if you put down, let’s say, 10 percent and the house is up 5 percent, which is the latest data, then you would be up 50 percent on your investment. And you’ve locked in the cost over the next 30 years. And today the cost of owning is somewhat less than the cost of renting. And if you rent, the rent goes up every year. But if you buy a 30-year mortgage, the cost is fixed.”

 

Paulson stressed that an owner-occupied home — not a home bought to be a rental — is what he views as the best investment individuals can make right now.

 

“To buy it as an investment and rent it out — I’m not so enamored with that concept,” he said.

 

Source: “Paulson: Buying a House Still Best Investment,” CNBC (July 17, 2014)

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Interest Rates fall to 4 1/8% on 30 year fixed

Yes, 10% down up to $1,000,000 mortgage amount!!  Call for program details and how we can make it work.  Loans to $417,000 are now as low as 4.00% so call now.  Rate sheet is attached for printing.  Thank you for the continued support and have a nice weekend.

cassidy_rates_718_791

Call Mark Cassidy for super advise and excellent service. I did. You will be happy. Ian

pma_cassidy_718

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Summer Shore rentals far ahead of last year’s pace

By Jacqueline L. Urgo, Inquirer Staff Writer

 

Bob Lawrence has no choice but to put behind him the memory of Hurricane Sandy ripping apart the deck and outdoor shower of his summer rental home.

 

“In this game you have to keep moving forward. . . . You can’t look back. You have to come back stronger and better from something like that,” said Lawrence, 57, who replaced much of the old wooden structure with fiberglass components to help attract renters to the three-bedroom bay-front Longport home that he privately rents for as much as $6,000 a week.

 

 

 

This four-bedroom Ventnor house rents for the summer season for up to $100,000. In some areas, bookings are up 25 percent over last year. (MICHAEL S. WIRTZ / Staff Photographer)

 

Homeowners such as Lawrence and real estate brokers and rental agents up and down the coast – except in areas of Monmouth and Ocean Counties where Sandy in October 2012 created so much destruction that many property owners are still rebuilding – contend that bookings for this summer are way up over last year at this time.

 

Business officials closely monitor such numbers because tourism is a $40.4 billion-a-year industry that directly supports 320,000 jobs in the Garden State. Findings of a new study released last week by the New Jersey Department of State indicate that if tourism in the state were a company, its sales would rank 70th on the nationwide Fortune 500 list – ranking higher than Sears, DuPont, or Hess Corp.

 

Despite the ravages of Sandy and a revenue decline in Atlantic City casinos of 5.9 percent in 2013, the state-commissioned study by the Oxford University-affiliated consulting firm Tourism Economics, found that visitor spending, capital investment, and government support in the state increased by 1.3 percent in 2013. The number of visitors to New Jersey also increased to 87.2 million last year, a 5.7 percent rise over 2012.

 

The outlook for this summer is also optimistic, according to state officials at a tourism conference in Atlantic City last week. Projections indicate a 2.2 percent increase in the number of tourists visiting the state in 2014.

 

Lawrence, an avid boater who stays on his 42-foot Sea Ray when his house is occupied by renters, said that in the wake of Sandy last year, he spent more summertime weeks on land at his Longport house than ever before. By contrast, this year his home is already booked for the prime season in July and August.

 

“Even though this part of the Shore didn’t have that much damage compared to other places up north, people still seemed leery about renting here last year,” Lawrence said. “But this year, it’s the opposite. They’re anxious.”

 

In Atlantic and Cape May Counties – and even sections of southern Ocean County on Long Beach Island – the number of signed leases is up by as much as 25 percent over last year at this time, according to Realtors.

 

“People do seem anxious to make their plans this year. And the best properties, in any price category, always go quickly, and that’s what we’ve been seeing this year,” said DJ Gluck, owner/broker of Soleil Sotheby’s International Realty in Margate, whose agency specializes in high-end properties in the Shore’s Downbeach area of Ventnor, Margate, and Longport. The 100 or so homes on Gluck’s sales roster sell for millions and rent for as much as $120,000 for the season.

 

Gluck insists Sandy is no longer a factor – except in the buyer’s market where concerns center on height restrictions and other post-storm regulations – to most vacationers seeking sun and sand this summer.

 

“People just want to forget all about this harsh winter and get down here,” said Gluck, whose agency recently launched a marketing program designed to reach a global audience of luxury consumers through a new iPad app and other digital format presentations.

 

Such digital communication – especially during a particularly stormy winter like the one that just past – is what is fueling much of the early renting this year, says Michael Mavromates, broker/manager at the Long & Foster Agency in Avalon.

 

With bookings running about 18 percent ahead in his office, Mavromates said the cold weather and snow spurred a lot of activity on his agency’s website, which offers Shore rental listings that range from a $600-a-week two-bedroom, one-bath condo in Wildwood to a six-bedroom, $18,000-a-week beachfront abode in Avalon.

 

“Nobody is talking about Sandy whatsoever,” Mavromates said. “They just want to talk about sun and sand and where they are going to be spending their vacation this summer.”

 

Carol Menz, broker/owner of Coastline Realty in Cape May, said the rental season so far had brought “stunning volume” to her agency. Knowing that Cape May suffered almost no damage from Sandy, many potential renters came back this year to book properties they stayed in last summer.

 

“Clients are saying they are so dismayed by such a harsh winter this year, they are really, really looking forward to summer,” said Menz, noting that volume in her agency had been pushed as much as 25 percent over last year at this time.

 

Even on Long Beach Island, where cleanup from Sandy’s wrath bore a lackluster season last summer, real estate agents say business has been brisk this year.

 

“We are doing great,” said Michele Timlin, a sales associate at the G. Anderson Agency in Beach Haven. “People are much less hesitant to rent this year than they were last year.”

 

Timlin says the agency has the keys to about 1,000 rental properties on the island and nearly half are already spoken for. Rentals on Long Beach Island vary from as low as $2,000 for a two-bedroom condo to as much as $20,000 a week for a beachfront home that sleeps 14.

 

And at the Fox Agency in Ocean City – a geographic locale that may be the Mecca of Jersey Shore summer rentals by sheer volume – things are looking up this year, too. Ocean City offers more rental units – as many as 10,000 by some estimates – than any other Shore town.

 

“My projection is that this is going to be a very good summer,” said Clay Rossiter, rental manager at Fox, where rentals are up 23 percent over last year at this time on the 4,000 properties the agency brokers for rent. “Between getting over Sandy and surviving this past winter, vacationers are really thinking about getting on that beach and enjoying themselves.”

 

Original article link:  http://articles.philly.com/2014-03-24/news/48494952_1_hurricane-sandy-tourism-economics-longport

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Mortgage Rates have dropped back down to 4.25% on a 30 year mortgage – June 13, 2014

Rates seem to be dropping again. Call the expert.

Please let Mark know you read this on my blog. Thank you, Ian

 

Good afternoon!  Here are the rates for Father’s Day Weekend.  Please remember, I am available all weekend by calling me on my cell at 609-517-6035!!   Call me anytime! We can now do 10% down up to $1,000,000 either with the traditional PMI or using a Blended Program with an Interest Only HELOC.  If you have a buyer looking for less than 20% down, please call for the details!  Have a great weekend and thank you for your continued support.

HAPPY FATHER’S DAY TO ALL THE DADS OUT THERE!!!

Mark

 

 

 

 

 

Mark V. Cassidy  NMLS#209223

Senior Vice President

Philadelphia Mortgage Advisors

16 E 9th Street

Ocean City, NJ  08226

609-398-8600 – office phone

609-517-6035 – cell phone

855-469-2429 – e-fax

mcassidy@phillyadvisors.com

Apply on Line At our Website: www.phillyadvisors.com/Mark

 

REPUTATION IS EVERYTHING!!

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12 Tax Tips To Consider When Buying A Shore Or Vacation Property This Summer

Each year on Memorial Day weekend, there’s a giant exodus from much of Pennsylvania towards the Jersey Shore. Some folks head for the glitter and night life of Atlantic City while others head for the relatively quiet Victorian gingerbread homes of Cape May. Still others opt for family-friendly Ocean City, tony Stone Harbor or any number of quaint shore towns in between.

Those lucky enough to score a prime vacation rental on the shore often consider the possibility of sticking around… perhaps permanently. If you’re thinking of buying a shore or other vacation property, here are twelve tax tips to consider:

 

 

  1. The Internal Revenue Service considers a vacation home or a second home one that is permanently in place (even though it could be moved, like an RV) and offers sleeping, cooking and toilet facilities.This would include not only a shore or lake home but a condo, co-op, mobile home, RV, house trailer, yurt or a yacht. It need not be fancy (a bare bones structure works) or located in a vacation area (somebody somewhere has to want a second home in Cleveland, right?). When you’re shopping around, keep in mind that you don’t have to have a Hamptons-style manse to take advantage of available federal tax breaks. It does, however, have to have a structure: bare land doesn’t count.
  2. For tax purposes, you can deduct “qualified residence interest” on a mortgage secured by a second home – that’s in addition to interest that you pay on a mortgage that is your primary residence.It also applies to additional loans on a primary home or second home including a second mortgage, a line of credit, or a home equity loan. If you itemize your deductions on a Schedule A and you have a mortgage on a qualified home in which you have an ownership interest, you can deduct the interest you pay on that mortgage. The total amount of debt that you can use for purposes of calculating the home mortgage interest deduction for your main home and second home cannot be more than $1 million ($500,000 if married filing separately); some exceptions apply for grandfathered debt. You can bump the number up even more if you have qualifying home equity debt.
  3. In addition to mortgage interest, local and state real estate taxes paid on a second or vacation home are also generally deductible.
  4. You can also deduct personal property taxes payable on the value of personal property at your second or vacation home, including those taxes due on your yacht or other boats (that deduction is available if you itemize regardless of your living arrangements).Personal property taxes are imposed by state or local government on certain kinds of property like your cars or boats. In some states, it might also be imposed on recreational vehicles like snowmobiles, ATVs and jet skis; if so, those may be deductible. Note, however, that only personal property taxes are deductible on these items for federal income tax purposes and not your registration fees.
  5. If the property is your own property and you never rent it out, you can claim those breaks (items #2-#4) but not the cost of upkeep of the property.As with your primary residence, home improvements are personal in nature and are rarely deductible (some exceptions apply).
  6. If you rent out your property, you may be able to deduct some home improvement costs.To qualify, you must not personally use the home for at least 14 days or 10% of the number of days you rent it out at a fair rental price (letting your favorite cousin stay there on the cheap doesn’t count). Assuming that you meet the criteria, you don’t take the deduction for home mortgage interest on a Schedule A but rather you claim the expenses related to the property together with rental income received on a Schedule E. Those expenses may include mortgage interest, real estate taxes, casualty losses, maintenance, utilities, insurance, and depreciation – the total of those will reduce the amount of rental income that is taxed.

 

English: Beaches houses on the western side of Misquamicut Beach, Westerly, Rhode Island. (Photo credit: Wikipedia)

  1. If your deductible rental expenses are more than your gross rental income, you will report a loss.Your rental losses, however, generally will be limited by the “at-risk” rules and/or the passive activity loss rules. Those rules can be tricky but here’s what you need to know: rental activities are almost always considered passive, even if you materially participate in them, unless you are a real estate professional.
  2. What if you’re somewhere in between hanging at your home for relaxation and renting it occasionally? So long as you rent the property fewer than 15 days during the tax year, you are still allowed to take the deductions for the interest, taxes, and (if applicable) casualty and theft losses.Additionally, you do not have to include the rent you receive in your income, though you may not deduct the corresponding rental expenses.
  3. If you use your vacation home for personal use and you rent it out for more than 15 days, you’ll pro-rate the income and the expenses according to the amount of time you (or your family) are at the property.You’ll report rental income and deduct rental-related expenses on your Schedule E and you’ll deduct the mortgage interest, property taxes, and casualty losses attributable to your personal use on your Schedule A.
  4. What about using your second home as a workspace (and I mean more than checking your smartphone from the comfort of your hammock)?If you rent part of your home to your employer and provide services for your employer in the rented space, you would report the rental income on your Schedule E. You can deduct mortgage interest, qualified mortgage insurance premiums, real estate taxes, and personal casualty losses for the rented part but you cannot deduct any business expenses: that’s because you cannot use your home for profit (rental) and still take a deduction for its business use. If you opt not to collect rent, you may not deduct the related expenses and the “regular” rules for business expenses would apply, including the requirement that your home office be your principal place of business.
  5. When you sellyour vacation home, you will likely be subject to capital gains tax. There’s an exception if you convert your vacation home to your primary home: remember, however, that you must have owned and lived in the home as your primary residence for two of the five years prior to sale. The years don’t have to be sequential: you can live in the house in year one and in year five and still qualify. You can only claim the exclusion for one home at a time so if you sell your primary home and move into your vacation house for two years (and otherwise meet the criteria), you can take the exclusion on a subsequent sale. Whether to make that change solely for tax reasons may depend on a number of factors including the amount of the gain or loss (see #11 below).
  6. What if the market turns sour on you? You can never claim a loss for the sale of a personal residence, no matter how much of a bloodbath you take.You may, however, claim a capital loss on investment property (assuming your vacation home as a rental qualifies) depending on the nature of the loss and whether you have offsetting gains.

So there you have it, a quick summary of what you need to know about buying a second home for vacation or for investment this summer… The rules can be tricky so be sure to check with your tax professional before making a move. For now, however, the sun is shining and summer is just heating up…  get out there and enjoy it!

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Homes with lots of bedrooms are popular at The Jersey Shore

By BRIAN IANIERI, Staff Writer

Maybe it’s for a large family. Maybe it’s a seashore vacation home expecting plenty of summertime guests.

The homes with the most bedrooms – five or more – represent the smallest portion of New Jersey real estate, behind only homes with no bedrooms, according to the Census Bureau’s 2012 American Community Survey.

This five-plus bedrooms segment is well behind the most popular (three-bedroom homes), but it still plays a critical role for homeowners who need space and are capable of paying the higher prices associated with larger homes.

Patricia Gray Hendricks, broker associate at Wilsey Realty in Cape May, said large homes are popular among the region’s second-home owners looking for ample rooms for guests and large families that can include children and grandchildren.

In Cape May, Hendricks said, buyers are drawn to large homes that are not in densely populated settings and are not duplexes.

“The traditional Cape May houses tended to be larger,” she said.

The number of bedrooms in a home is among the most vital pieces of information in sale listings, succinctly letting home hunters know if a property can fit their family and guests.

Among shore properties, homes with at least five bedrooms are generally more prevalent than in other areas.

In Cape May County, they make up 8.6 percent of total homes, the highest percentage in the state, according to the Census Bureau’s 2012 American Community Survey.

In Ocean County, these homes make up 6.5 percent of total homes, the seventh highest percentage in New Jersey.

Atlantic and Cumberland counties were both below the state average of 5.5 percent. Atlantic County had 4.5 percent; Cumberland County, 2.4 percent.

Hendricks had a recent client who wanted a place in Cape May in the three-bedroom category.

“Juxtapose that to the person who’s saying, ‘I’m now ready to have a house at the shore and have people here but not in stages. I want to have my girls and their husbands and their children at the same time,'” she said. “That’s also the reason people sell houses – they’re no longer using the house in the same way.”

Allan Dechert, broker of Ferguson Dechert in Avalon and Stone Harbor, said homes with lots of bedrooms are popular in the second-home region, particularly among three-story properties with master suites on the third floor.

Homes with five-plus bedrooms have their niche, but they can also be too large or too expensive for some families.

Richard Shaffer III, broker-owner at Resorts LTD in Egg Harbor Township, said five- and six-bedroom homes in mainland Atlantic County have a large disparity between asking prices and selling prices.

“If you look at five bedrooms, they tend in some cases to have two master suites, so it’s a good in-law suite for an elderly parent or in-law and then share the costs,” he said. “It’s a great situation for that, but for an average family that needs the space, a four-bedroom 2 bath, you can get a very spacious house. … You can still get a nice size four bedroom, 2 bath for under $300,000 or in the high $200,000s.”

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Moving Up? Do it now, not later.

 

There is no way for us to predict the future but we can look at what happened over the last year. Let’s look at buyers that considered moving up last year but decided to wait instead.

Assume they had a home worth $300,000 and were looking at a home for $400,000 (putting 10% down they would get a mortgage of $360,000). By waiting, their house appreciated by 13.8% over the last year (national average based on the Case Shiller Pricing Index). Their home would now be worth $341,400. But, the $400,000 home would now be worth $455,200 (requiring a mortgage of $409,680).

The table above show what additional monthly cost would be incurred by waiting.

Prices are projected to appreciate by over 4% and interest rates are also expected to rise by as much as another full percentage point. If your family plans to move-up to a nicer or bigger home this year, it may make sense to move now rather than later.