Whether you are thinking about selling in the present market or not thinking of selling at all, knowing the condition of the real estate market in general and understanding your position in it is a responsibility that we all share as owners of second homes. Maintaining an awareness of a market that is in most instances hours from where we live is difficult. I know from my own experiences in South Florida. Having to use information taken piecemeal from here and there can be unsettling to say the least. Trying to make decisions or developing short/long range plans in that fragmented condition is risky.
My name is Stephen Freda and I am the Broker/Owner of Sea Isle Realty. I have spent hundreds of hours analyzing the last 10 years of our real estate market and now I want to share that data with owners of property that need to understand this market as it completes it’s correction. I want to help you develop and execute your ownership plan, be what it may.
If you are thinking of selling I can help.
If you are not thinking of selling but want to know what you need to know, then you should call me.
I am looking for business relationships with owners of real estate here in Sea Isle City. I pride myself in representing the interests of Owners. I am experienced, professional and informed. I welcome the opportunity to speak with you
Sea Isle Realty
Everything keeps changing. I am 56 years old in a few months and I can not believe how many times I have had to “ learn something new “. I was watching a show about Steve Jobs and Apple computer and thinking about having purchased one of the Macintosh computers that he was building at the time. I was so jazzed by that machine. People made a fuss about it when they saw it on my desk and were wowed when I would do something with it. I felt special for having it. I loved the idea of having something and learning something new. That was almost 30 years ago and I have to admit that I still like the feeling when I learn something new, I’m just tired of feeling like I have to always be doing it just to keep up. As a Realtor, I used to be able to keep up by just getting out of bed and remembering what had happened yesterday and “printing a flyer” was something I could get extra credit for because not everyone could. I am serious. People used to actually notice a flyer like it was amazing and if it was printed in color, well then look out.
My job keeps changing. My business keeps changing. Every time I look up there is a new Social Media “Thing” that I do not use nor want to, but somehow just the awareness that it is there being utilized by so many other people that I see makes me feel pressured in a not very subtle way. I am getting jealous of Bears. I want that kind of life plan. But as a person who makes a living in sharing information, I am forced to deal with all this “newness”. There is not going to be any wrap up on this ramble, I just needed to get that off my chest before I talked about the latest version of the same old info about what is happening in our real estate market here in Sea Isle.
I think we are going to have a very busy Spring and that the values will continue to increase. The last twelve months saw a marked uptick in every single category and there are short inventory rolls in everything except New Construction and the last time you could say that was about 7 or 8 years ago when we were finishing the run of that started in 2002. Beach Front and Bay Front lists are shockingly short and those values are going up. They had overcorrected and now they are balancing into the context of the market here in Sea Isle as they always had before. If you own one or want to buy one you should be talking about what the last 12 months mean to you and your investment here. New Construction condo’s have changed the entire market for owners of 2 and 3 bedroom condo’s that were built back in the day and those owners need to get a conversation with someone they know and trust so that they can better understand their position. Every owner of property in Sea Isle City can benefit from a conversation about their property.
It is going to be a good year. Someone said that the other day when I was in the room and it made me feel good. Isn’t it wonderful and simple that something like that can still happen. See you around town.
If you are an Owner of or have considered buying a property here in Sea Isle, you should take note that sales of New Construction units are exploding right now and it is having an effect on you.
New Construction activity has been the barometer used to forecast the Sea Isle Real Estate Market since I started to do this work. When it stalls the market is usually in some type of trouble or experiencing a correction downward. But when it starts to run then the whole market runs with it. It is the fast race car that all the slower cars get in behind to allow themselves to be drafted along. I have been a Listing and New Construction specialist since I started to work in Real Estate and I can state with great conviction that New Construction is starting a run. In the last 80 days since September 1st 2013 there have been 10 New Construction units that have gone under contract, with 9 of them being sold Pre-Construction. The Pre-Construction qualifier is a critical one. What that means is that these units were sold before the construction was completed or in many of these cases, before they had even broken ground. This kind of activity has not happened for a very long time and whenever it does it speaks to an undeniable condition. It only happens when buyers are fearful that if they wait they will lose out on the opportunity and when buyers start to think that way the advantage always shifts to the Seller.
Another important element to add to this consideration is the fact that we have at least three times as much New Construction inventory as we had last year at this time. So when you add the large volume of contracts for sale to the fact that there is so much inventory it amplifies the point being made. In the past 7 years whenever too much inventory hit the market it stalled out. Now with New Construction listings hitting the market every week, we are selling MORE New Construction that at any time in the last 7 years along with everything else in the store.
If you would like to talk about this and how it might be effecting you then give me a call at 609-263-5301 or email me at [email protected] and we can talk specifically about your property.
I know that many of the people reading this post own a property here is Sea Isle and often spend time here in town at this time of year as you prepare to close for the season. If you have the time and would like to talk about anything at all about your plans for the Sea Isle home and you think that I might be able to help with some information, then please drop me an email at [email protected] and we can make a time for me to stop by. Wether it be related to work that you are planning over the winter or just wanting to get a feel for where your properties value is at this point I will sit with you on your next trip and help if I can. Thanks……………..Steve
They say that numbers don’t lie and I like to believe that even though though they don’t always make as much sense as I want them too. The numbers from the first 10 weeks of 2013 don’t support what I think and what I think is that the market is very strong. So I went deeper and found what I was looking for. I found some numbers that speak to strength and not weakness. I will attempt to set the point up by starting with the 2012 story.
In the first 4 weeks of 2012 value shoppers drove the market as 50% of the volume was below the $600,000 price. As the inventory ran out below $600,000 the activity shifted to houses priced between $600,000 and $700,000 but the overall story of the first ten weeks of 2012 was that 65% of units sold in that time were priced under $700,000. That numbers spoke to weakness.
In 2013 the first 4 weeks were actually ahead with 17 units selling as compared to 13 in 2012. But in the next six week those numbers reversed dramatically with 36 units going under contract as compared to 12 units this year.
That was the number that confused me. Why such a bad year to year comparison of units sold when I am feeling the market is strong. The reason for the bad number is simple. We ran out of inventory at the price point where our buyers were shopping.
Our buyers in 2013 were a totally different type of customer than in 2012. No more crazy low ball offers. No more ignoring the middle price point. Out of the gate we were right back in our wheelhouse, selling the nicer products for numbers that were way ahead of the previous year. But then we ran out of the type of inventory that they were interested in and everything stalled. I’ll go back to the numbers to help support this position. In the first 4 weeks of 2012 only 23% of the volume fell between $600,000 and $800,000. In 2013 that rose to 71%.
That powerful indication of strength is impossible to ignore. We are low on inventory at the time of year when we are the busiest with sales . That combination of low inventory and solid demand from qualified buyers is always a good thing for property values so things are looking up for sellers and property values. Now its just a matter of time. The next few months will tell more of this story and I will try to keep you posted. If you would like an Excel sheet with the data that I used for this entry, just shoot me an email and I will be happy to send you a copy.
All numbers were pulled from 4 bedroom or greater sales
I don’t pay attention to the politics of the country, the interest rate or much of anything else that some other people do to help them develop their positions as to the relative condition of our real estate market here in Sea Isle City. But I do pay attention when owners start dropping in to the office and say hello or call me out of the blue in a volume that is more than normal. In the past month or so these seemingly random contacts have increased so much that I am shocked. The guy that sits next to me at work just keeps looking at me as I get all these visits and phone calls. He’s new at real estate and he keeps asking me what I have been doing to get all this activity. He wants me to tell him something but I have nothing the give him. The collective mindset is something I always think about. I am amazed at how it always presents itself in a sudden collective thought and then the action that is sometimes attached to it showing when it shows itself in my work life. People start thinking about taking action all at once and they go into a stall all at once. They start thinking conservatively or aggressively and they always do it at the same time without knowing each other or talking about it. Its like there is a special frequency out there that we are all tuned into without knowing it.
So anyway, the reason for me sharing this tidbit is just to let those of you that are getting antsy about what your doing with the Sea Isle position, your not the only one.
I remember writing a piece for a mass mail brochure we sent out in about 2004 or 2005.
The title of it was “Should I Sell Or Buy Another” and it explored the idea that many owners were asking themselves at that time. Prices were at an all time high and people were jumping in buying second and third positions in places like Sea Isle City. It kind of speaks to the nature of man when you look at it from some distance. Prices were at an all time high and I was personally buying anything that wasn’t nailed down and not even considering any other idea except that it was going to continue going up. I survived those decisions but it left me a little weaker in the knees if you know what I mean.
So now here we are at the end of a long correction cycle and the stars are lined up like they have not been since 1990 here in Sea Isle City. I am working with a customer right now that was talking about that period because that is when he bought his first property here. At the time you could buy a new house and the rental income would carry it or come damn close to it. Buy the time the market was peaking in 2005 and I was buying house after house, the properties ability to carry itself was not even looked at let alone considered. Can the property carry itself from it’s rental income was always the qualifying question that you asked yourself.
So here we are with that being the case and if I asked that same question I asked in 2005 “Should I Sell Or Buy Another” of myself and other people that own a property here in Sea Isle not too many people would start looking for a second investment even though on paper it looks like the time to step in again. Deep scars like the ones caused by the damage done over the last 6 years restrict range of motion.
It hasn’t been this busy in 5 years and if you look back at the pattern of growth here at the Jersey shore over the last 20 years it all adds up. Our growth has always come in sudden and dramatic busts after long periods of correction and if it keeps going like this we could be right at the beginning of one of those dramatic growth periods. Interest rates are at an all time low and rental income is at an all time high. If you want, you can list your house and sell it pretty easily. So once more the question for you and me is “Should I Sell Or Buy Another?
I have been specializing in New Construction sales for as long as I have had a real estate license, my family history of building homes here in Sea Isle is over 50 years old and my brother is still the largest builder here in town. So you think that would put me in a position to understand what is happening right now with FEMA and the State of New Jersey as the aftershocks of Hurricane Sandy continue to be felt. I met with a prospective customer yesterday at my brothers office and when he was done explaining things I still could not get my head wrapped around what he was saying.
So much of what has been written and talked about has been specific to Insurance costs and how Sandy would effect rates. The Governor sent a dictate down the line declaring that New Jersey would adopt the FEMA position lock stock and barrel. Some communities resisted more than others but all that aside the initial effect of this declaration was temporary paralysis in the builders community. They could not in good conscience start building someones home without knowing how the local inspectors and then eventual insurers would respond to these buildings. Now things are beginning to calm down and projects are beginning to move forward, but still a little bit under a cloud of uncertainty. Whole sections of town have been declared V Zones. The V zone used to be almost the exclusive province of beach fronting homes south of 57th street. The houses behind the promenade were not in that zone as the promenade served as a protective barrier. Now the entire bay front has been included in the V Zone along with other lower lying areas here in town. If an owner called me on the phone today, It would be just a little bit less comfortable for me THEN IT WAS ON MY FIRST DAY WITH A REAL ESTATE LICENSE. That is how confused I still am. I don’t like how that feels so now I guess I have to go learn something which shouldn’t happen to a 55 year old man. I should be getting comfortable. I’ll try to share what I find out. Maybe build a small website for owners with detailed maps and things like that. I’m glad I am a day at a time type of guy or this stuff could make me crazy. Ill be in touch.
V Zone Definition
We took a booth at the Philadelphia Home Show again this year and I was just sitting there on a slow Monday night when John Burke from our office looks over at a lady at the next booth over from us and says in a kind of I can’t believe it sort of way “Is that Mrs *******” and stands up and begins to walk up to this lady that turns out to be a woman that is in fact, Mrs. *******, a close fiend of his mother and his entire family and they do the whole I can’t believe your here thing, blah blah blah, hah hah hah……whatever. I mean its Monday night at The Philadelphia Home Show, no one is walking around yet and I give a shit why? So he starts to walk over with her and I start thinking of ways that I can start running without it being noticeable because I know were now going to do the whole this is blah blah blah thing. So he walks up and introduces me to this nice woman a few years older than me and we begin to talk about how she began working for this builder that was in the next booth over from ours just a few years back and all the other smalltalk that those type of situations are composed of when she breaks into a big smile and out of nowhere says “ You know, I know you from when you were like 6 years old”. I look at her again and try to recognize something in her face and the curtain starts to part. She then goes on and says, I worked at your aunt’s pizzeria in the shopping center on 63rd street. I tilt my head and keep looking at her face trying to see it as it looked 40 plus yrs. ago as she continues to talk about My Aunt Louise who was an absolute legend and on of the most infamous characters from the story that is still told by people who were a part of Sea Isle City back in the 1960’s. We had our own little subculture back then. We were shopping center people, our whole world centered on 63rd street. We had the pool and the arcade my aunts pizzeria and life was as good as it gets. People came down the shore back then for the “whole summer” and it was wonderful. So I ask her name and she says that back then her maiden name was Pat %%%%%% and BOOM there I was back in 1968 sitting at the counter eating a slice of my aunts pizza with the best friends a kid could ever have listening to my aunt scream “PAT” from her kitchen domain. I could literally hear her voice screaming “PAT” because that was what she did, when the food was ready she would screech the name of whatever young girl was responsible to come and get her food and bring it out to the counter. But “PAT was the one that had stayed for the whole time that era was composed of. She came back for seven consecutive summers and she always smiled this beautiful smile and she was never anything but this sweet person and in my families world back in the shopping center days sweet and selfless stuck out. I instinctively reached for my cell phone to call my best friend from back then whose name was Richard. I wanted to tell him I had run into “PAT”. I didn’t dial because he died a year ago but I still reach for the phone in moments like that. So anyway “PAT” and I talked and talked and out of nowhere a nothing Monday night at the Philadelphia Home Show became special. As I sit here and write this I am still “feeling It”. A kind of buzz. The feeling that comes when I feel connected to what is going on around me, energized and hopeful. Turned from one side of the coin to the other by a moment as random as random gets.
There is no actual point to this entry so if your like my wife and always want to have the story wrap up in a neat ending then I apologize in advance. I just felt like sharing last nights experience with this blog. I still have no idea what I’m supposed to put in this thing. I don’t read blogs so I don’t know. But I know that I cant just write about real estate because that would be unsurvivable for both of us. So I shared this story with you because it made me think about how effected we are by each other. How inspiring and hopeful it is that people can help us by simply remembering and caring and sharing a memory. Before I met Pat the only thing on my mind was that there was no way I was renting a booth at The Philadelphia Home Show next year and this morning I’m thinking next year, maybe a bigger booth. Go figure.
They say its a long road to reconstruction. That sure has been true as it applies to the position of strength for a seller of real estate for the last 5 plus years. Buyers had all the cards and sellers were left playing Indian Poker. Long lists of options and not a lot of prospective buyers created a reality for sellers that discouraged many owners from listing the Sea Isle house for sale. They wanted to sell but did not believe that they could get a good price or even get any offer at all.
In January of 2012 the worm started to turn. We saw stronger sales volume than we had in previous years and the solid activity continued through the Fall. Inventory that had been listed and re-listed for years was finally cleared out and the prospective buyers began to lose the advantage position. As 2012 closed I was wondering if that solid year would be followed up by another strong selling season or if we would fizzle out as we had with some other false alarms in the past 5 years.
This is what has happened so far.
The 2013 prospects began showing up in solid volume as soon as the new year began and they were immediately confronted with lists of possible options that were painfully short. I was out with a customer last week and they only had 3 houses they could look at that fit their needs and in the past 7 days, all of them have sold. For the first time in a long time the market is not delivering more product that it can sell and the buyers are being forced into the difficult position that was the exclusive province of sellers since 2008. Only time will tell how this is going to go but it’s nice to have a more balanced condition. It’s healthier and in the long run, better for both sides of the aisle.