By KEVIN POST, Press of Atlantic City Business Editor
The island housing market in Atlantic County has gotten a boost from last month’s release of more favorable flood insurance maps.
New preliminary flood zone maps from FEMA reduced the land in high-risk velocity zones – where homes are required to be on piling as a condition of flood insurance – by 80 percent in Atlantic County.
Before the mid-June map release, property owners and potential buyers feared the potential cost of raising properties and insuring them against flooding.
“It was very frightening,” said Paula Hartman, of Prudential Fox & Roach Realtors in Margate. “Now the market is fabulous,” especially in ocean- and bay-front blocks and for new construction.
Hartman, who focuses on high-end properties, said she is having her best year ever – even a bit better than the housing bubble years, with 125 homes sold or committed in the first half of this year compared to 241 in all of 2006.
“When the storm happened, prices dropped 20 percent across the board, and more than that on the ocean and bay. Now interest rates are starting to go up and people are running to get these dream homes while prices and rates are low,” she said.
Hartman said homebuilders didn’t know what they had to build or what the costs would be before the new maps, but now they are buying ground and are very active.
Maria Schrenk, an agent with Coldwell Banker At The Shore in Brigantine, said last week she was preparing to show several properties to buyers interested in building new or rebuilding an existing structure.
There are good buys in the current market for builders and buyers “with a vision for the future,” she said.
“We’re busy. I think there’s some renewed hope,” Schrenk said. “Maybe the fear has dissipated a little bit.”
Paul Dzialo, of Weichert Realtors, Brigantine Realty, said he’s seeing a lot of new construction, particularly in areas spared by flooding from Hurricane Sandy.
He said the agency’s owner, Gary Woerner, is building 15 to 20 homes per year at the affiliated Woerner Custom Builders, including one that just sold for about $2 million.
Sales data for June from the regional Multiple Listing Service seemed to already show the increase in activity in the Margate market.
Margate home sales rebounded to the year-ago level of 16 properties, but now at an average price of $892,000, up from $591,000 in June 2012. In May of this year, the last month before the new maps, 12 homes sold in Margate at an average price of $624,000.
Hartman said reactions to storm damage have been varied, with some homeowners remodeling, some waiting, and some taking their insurance settlement and putting the property on the market as is. Investors and market watchers have been snapping up bargains.
“Before the new maps we didn’t have this many calls from buyers. Now we’re having bidding wars again,” she said.
She said people mostly have come to terms with having to pay more for flood insurance, which was going to happen with or without Sandy. Many others who weren’t carrying flood insurance because they had paid off their mortgage and weren’t required to have it, now are purchasing policies.
“They’re moving forward. People want to be here. If they have to pay a little more for flood insurance, that’s OK because there’s a magic to being here at the shore,” Hartman said.
Even the storm damage and the renovations it required have had a silver lining, she said,
“I know personally what it means to be forced to remodel. The storm forced me to remodel my house and the real estate office,” she said. “But the island looks beautiful now, with many of the houses and stores remodeled.”
A spokesman for the Federal Emergency Management Agency said the updated preliminary maps for Cape May County will be released in August.