Defying Recession, Cape May NJ Summer Visitors Will Return, Poll Suggests

Cape May, New Jersey is optimistic that people interested in the summer shore area last year will return, recession notwithstanding, says the Cape May County Herald.

Among the 2,000 visitors queried in a recent poll, 77 percent of the respondents said they are planning to vacation in Cape May County this year. One reason: lower gas prices.

Many Cape May vacationers live one tank of gas away from this area. “The lower gas price is going to help put their budget back in order,” said Diane F. Wieland, tourism department director.

What's more, the region will benefit from the large number of second home owners.

Wieland noted that 50 percent of all second homes in the state are in this county and 47 percent of the county’s dwellings are considered vacation homes. A majority are used by owners but others are often rented out.

Vacation home owners "are going to save the day again for the fact they are committed,” Wieland told the paper. “They may not be able to take that cruise or go somewhere else on vacation but they’ve got a vacation home in Cape May County and they are going to come.”
(Photo: 4 BR West Cape May house for sale -- $699,000)

Drop Price in Slow Real Estate Market? Yes!

A lesson from New Jersey -- bidding wars can erupt on a vacation home when you drop your price low enough.

Too many folks can't bear the thought of lowering their asking price. But a seller in Tenafly, NJ did. After a house did not sell for many months at $810,000, she told her broker to lower the price progressively. When it reached what she called "the sweet spot," $699,000, she suddenly got multiple offers, she told the Bergen Record.

Her broker was then able to set a deadline for best bids and got an extra $6,000 on the sale. Point of story? " it's about value....It's not affordability," according to the agent. It was not a vacation home, but idea is still valid in today's slowing environment.

Real estate agents in the Pocono Mountains of eastern Pennsylvania are touting the area as an affordable alternative to other vacation-home meccas within striking distance of both the New York City and Philadelphia metro areas. They estimate that one-quarter of the houses in the Poconos are vacation homes. Typical buyers? Couples under 40, with kids, who don't have a fortune.

What's available? From one broker, ERA Anderson real estate in Stroudsburg, come these examples:

1. 3 bedroom, 2-bathroom chalet on 1½ acres for $159,000
2. 11-room, 4,738-square-foot traditional-style home, built in 2000, with four bedrooms and 2½ baths on 1.3 acres listed for $379,900
3. 1-acre lot to build on, with an existing septic tank, priced at $34,000

Thanks to Shannon Roxborough of www.northjersey.com, whose story this is adapted from.

High Winds Blow NYC, DC No Good, Sez Expert

Thinking about buying a pied-a-terre in New York City or Washington, DC? Or a second home in Naples, Fla.? Keep your checkbook in your pocket, says real estate consultant John Burns. His "barometer" of housing affordability blows these cities off the charts in terms of bubbledom. "Nine markets have even worse affordability levels than when mortgage rates were 18%+ in the early 1980s: New York, Washington, D.C., Los Angeles, Seattle, Portland (Oregon), Baltimore, Edison (New Jersey), Nassau (Long Island, NY) and Naples," says Burns's latest newsletter.

Hot Spots Could Be Ripe for a Cooldown

These areas saw some of the biggest gains in vacation home sales between early 2001 and 2005. Now many of these markets are beginning to cool, says Fiserv Lending Solutions.

               Av Gain (2001 - 2005) Gain (2005 - 2006)
Cape May, N.J.                 16%               9%
Cape Cod, Mass.                12%               3%
Florida Keys                   24%               13%
Lake Tahoe, CA                 13%                7%

Is The Party Over?

Be worried. Be very, very worried, if you're a second-home seller. It may be time to declare officially that the bubble has burst. A front-page New York Times article today says: "The once-bustling deal making in a wide variety of popular locations for second homes -- areas like Florida, the Jersey Shore and Lake Tahoe, as well as the high-price playground on the East End of Long Island -- has slowed markedly in recent months. As the overall housing market weakens, the interest in buying vacation homes, from the most modest condominiums on up, appears to be falling faster."

The Next Summer Sizzle

So you thought there were no more beach resorts suitable for smart investors or second-home hunters? Think again. EscapeHomes, the popoular Web site, spotlights a bunch of them, including Door County, WI, Holden Beach, NC, and Long Beach Island, NJ. Each has properties for sale at prices that wouldn't buy a closet in the Hamptons or Miami Beach.

You Paid Too Much

If you just bought a second home in Naples, Fla. you probably paid nearly double what the property is really worth.

A Barron's study based on info from National City, a Cleveland banking and mortgage outfit, says homes there are overvalued by 96 %. Second on the list is Port St. Lucie/Fort Pierce, Fla. Top 10 overvalued cities include Tucson, Prescott and Phoenix in Arizona; Bend, Ore.; Napa, Calif.; Barnstable, Mass.; and Ocean City and Atlantic City, N.J.