Not just selling shore homes, selling a shore way of life. Your resource for the best homes, hotspots, & happenings in Margate, Ventnor, & Atlantic City.

Monday, November 2, 2009

Why Is The Jersey Shore a Better Buy?

Today I received an email from a potential Buyer who was concerned about buying in Margate. She sent me this email:

"I am not sure Margate is a good investment. $400/square foot for a home, although renovated, built in 1925 doesn't sound like a great investment in this economy....considering that it is about $160/sq foot to build brand your personal specifications. Average price per square foot for Margate City NJ was $247, a decrease of 49.9% compared to the same period last year. The median sales price for homes in Margate City NJ for Jul 09 to Sep 09 was $407,500 based on 52 home sales. Compared to the same period one year ago, the median home sales price decreased 6.9%, or $30,000, and the number of home sales decreased 13.3%. "

This was my response:

I understanding your concerns but let me give a few facts and opinions about the market here.

There are two major factors that I think have not been considered in the data you shared with me:
1) Location, Location, Location!!! - I have heard the analysis of how much you are paying per square foot for a home in Margate before. That is because it is a standard used in New York and Colorado and I am sure many other places. Unfortunately or fortunately that is not the measure that determines value here.

Location is "King" here, because that can not be changed.
An older home is often preferred, but again condition is a major determining factor. Homes are not quantified merely by square footage. Location, views, condition, history and even renovation potential effect the value.
2) How Does That Compare To The Rest Of The Country?

Margate home prices, like the rest of the country, have experienced price reduction over the past two years. That is exactly why it is the right time to buy. Luckily while the rest of the country experienced a "National home crisis" with reduction of 30-50% in home prices, and short sales and foreclosures rampant, Margate only experienced minor price reductions (about 7-10% depending upon the price point) and a small decrease in the number of sales. This made Margate an excellent investment.

There are a few good reasons that Margate has held its value:
1) proximity to the beach, 2) accessibility to nightlife and the city, 3) it is not a weekly rental community and 4) there is a quality and pride of ownership of the homes.

So let's talk about now.

The stock market broke 10,000 again.
It goes up and down but it's been announced on the news repeatedly that the recession is over.
Nationally, existing home sales jumped 9.4% in September to their highest level in two years. Consumers are optimistic and the home market and our economy is recovering.
Personally I believe in Margate as a financially opportunity. I also believe it is a window that is closing for greatest opportunities; especially with mortgage rates as low as they have been.
The market is not perfect and it did go down, but that to the Buyer's advantage. The good news is that our market is so strong that even a crisis that the last one we experienced did not have a major effect on it. If Margate is not the right opportunity, I would be very interested in knowing a better place to invest my money.

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