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Quarterly Land Use Wrap, Part I - Condos Predominate, Medians Soar Over National Averages 4.5.2006

Real Estate | Thu, 04/06/2006 - 11:00 pm | Updated 9 years 1 week ago | Read 2113 | Commented 0 | Emailed 0

By C.M. Mattessich

During the first quarter of 2006, county land use engendered news stories, community debate, and casual conversations, on a daily basis.  Giving context to the stories are the basic statistics representing sales and purchases in the county.  It's these that show, without gloss, spin or omission, the vast changes that are taking place in the configuration of residents (part or full time) and in our physical environment.
So for starters in its first "Quarterly Land Use Wrap," the Herald studied 1,092 residential deeds filed at the County Clerk's Office between December 18, 2005, and March 11, 2006.  These deeds included arms-length transactions recorded during the studied period for all of the county's 16 municipalities.
Excluded were deeds transferred without charge, transfers between family members, and transfers where only a partial interest in the property was being conveyed.
Several significant conclusions are supported by the data:  throughout the county, more condos are being sold than single family homes;  median prices continue to rise, now significantly exceeding national medians;  and, while the majority of buyers continue to come from New Jersey and Pennsylvania, other states show intriguing upticks as points of origin.
The chart on this page shows the ten county towns registering the largest number of sales during the studied period.  Each town's count is further broken down to show the proportion of single family homes and condominium/townhomes sold within the town.
In six of the top ten towns, sales of condominium/townhomes (that is, condos in multi-unit structures and condos in the newer configurations of "townhome" projects) clearly predominated over sales of single family homes.
Ironically, the town with the highest proportion of condo sales was Cape May, a town whose very name conjures visions of free-standing Victorian structures surrounded by the lawns that are so rare in many other beach communities.  Sales at the recently converted 52-unit Sandpiper Resort provide the main reason for Cape May's ranking.  Of the 56 condo sales in Cape May during the studied period, 38 were for units in the Sandpiper (which sales together have totaled approximately $23 million to date).
The four towns in the "top ten" whose condo sales did not predominate over single family sales were Avalon, Lower Township, Middle Township, and Upper Township.  Not coincidentally, Avalon has the highest median and average prices in the county, and the three "Townships" are inland, where single family homes - and even vacant lots - are still in strong supply.
Four county towns had no condominium/townhome sales whatsoever:  Dennis, West Cape May, Woodbine and Cape May Point.  Not only have those four towns traditionally had a high stock of single family homes, but together they registered only 29 sales during the three-month period studied.
When it comes to the total value of properties studied, a "top ten" list includes almost all of the same towns as the "top ten" in unit sales, but in a slightly different order.
The towns, in ranked order of total sales, are:  Ocean City ($160.2 million);  Avalon ($107.6 million);  North Wildwood ($79.4 million);  Sea Isle City ($59.1 million);  Wildwood ($40.4 million);  Cape May ($37.6 million);  Wildwood Crest ($37.3 million);  Middle Township ($32 million);  Lower Township ($27.6 million);  Stone Harbor ($26 million);  Upper Township $17.7 million);  West Wildwood ($4.1 million);  Dennis ($3.7 million);  Cape May Point ($2.9 million);  and Woodbine ($845,000).
The "total value" approach also suggests some interesting differences and similarities among the county's towns.
For example, Avalon's 57 transactions had a total value of $107.6 million;  North Wildwood transactions, while over three times the number of Avalon's, had a total value of a significantly lower $79.4 million.
On the other hand, Cape May and Wildwood Crest - a short boat trip apart across Sunset Lake, Jarvis Sound and Cape May Harbor - show remarkably similar patterns in some respects.  Both showed a significant portion of condominium/townhome sales even though, outside of their commercial areas, they appear visually to be communities where single family homes would predominate.  Cape May had a total of 60 sales during the three-month period studied, and Wildwood Crest registered only five fewer.  The total value of transfers in the two towns also was extremely close ($37.6 million for Cape May and $37.3 million for Wildwood Crest).
Median and average prices for each town, which are set forth on a separate chart (at page 64),  also tell interesting stories.
Note how, in many cases, the median and average prices for the same town are significantly different.  This reflects the presence of homes at one extreme end of the price range tugging at the average number to the extent that the average figure is not quite representative of the whole.  During the studied period, extreme figures appeared on the high end of the price scale in many towns.
Median prices, on the other hand, represent the price at the middle of all of a town's sales;  half of all sales were higher than the median figure, and half were lower.  Most land use experts consider medians as the most reliable markers of an area's market.
The medians in all towns except Woodbine exceeded national medians, a fact of considerable concern to planners, local officials, and ordinary residents who are concerned with keeping housing affordable to the wide range of persons who have called the county home for generations.
According to the National Association of Realtors, the national median existing-home price for all housing types in February was $209,000.  For single family homes, the national median price was $208,500, up 11.6 percent from a year ago, and the national median price for existing condos was $214,300, up 3.5 percent from February 2005.
A review of the hometowns of buyers, as identified in the deeds studied by the Herald, shows that the majority of purchasers continue to come from hometowns in Pennsylvania and New Jersey.
Among Pennsylvania towns, Philadelphia sent the highest number of buyers into Cape May County.  Multiple buyers also came from towns such as Downingtown, Drexel Hill, Holland, Kennett Square, Maple Glen, Media, Newtown, North Wales, West Chester and Yardley.
Feeder towns in New Jersey included Cherry Hill, Deptford, Haddonfield and Haddon Heights, Marlton, Medford, Moorestown, Mount Laurel, and Sewell.
New Jersey buyers also came from the county itself.  Purchasers already domiciled in Cape May County accounted for more than 20 percent of the recent sales.
The number of purchasers from outside the traditional buyers area is slightly up, with a specific rise in the number of buyers from New York, Virginia and Maryland.  Earlier this month, developer Eustace Mita, who has developed projects in Ocean City and the Wildwoods, told the Herald that he is projecting significant purchases from such states for the luxury units at his latest project, the Grand in Diamond Beach.
Watch for even more details about buyers in next week's Herald, when Real Estate Update will include Part 2 of its Quarterly Land Use Wrap.

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