After two years of declining real estate sales, Ocean City appears to be poised to ride a comeback wave that could make 1991 a refreshing respite from dry seasons past.
That was one of the conclusions of a recent report by the real estate consulting firm of Lippman Frizzel & Mitchell. The firm, which has offices in Baltimore and Silver Spring, has been tracking the Ocean City housing market for nearly 20 years. The report characterizes 1990 as the second consecutive year of declining sales, but predicts 1991 may reverse the trend.
An informal survey of brokers in the Ocean City area found the market apparently rebounding over the last several months "as buyers are acquiring potentially undervalued real estate with the help of attractive mortgage financing and worried sellers," the report says.
David H. Brooks, a partner with Lippman and author of the report, says the survey included only a "handful" of brokers but the responses were consistent.
"The attitude was, 'Wow, we have a lot of buyers coming in,' " Brooks says.
The report says that, if the trend continues, "1991 may prove to be healthy." No predictions are made about how large the rebound may be.
A steady trend, however, would pull Ocean City -- the state's most popular vacation area -- out of one of its worst real estate sales slumps in 16 years.
Since 1988, the value of overall sales within the Eastern Shore resort community has dropped approximately 16 percent annually, from $263 million in 1988 to $221 million in 1989 and $185 million in 1990, the report says.
While sales have fluctuated during the two decades Lippman has followed the Ocean City market, the 1989 and 1990 declines are matched only by a 36 percent drop that occurred in 1974.
The Lippman report attributes the 1990 decline to "oversupply, reduced demand and lack of consumer confidence."
Brooks says the Persian Gulf war may have prolonged the slump, creating pent-up demand as buyers "waited to see how deep the bottom was."
When the war ended in March, buyers in search of vacation homes headed for Ocean City, say several real estate brokers.
Among them were Mary Ann Crosby and her husband, Stephen, who decided they could finally afford a vacation home now that their three children are out of college.
The Crosbys, who live in Ellicott City, were aware of the sagging real estate market and were hoping to get a good deal when they started looking earlier this year.
They found it, and in April settled on a bayside condominium that Crosby said they got for $3,800 less than the list price.
Now Crosby says she is glad to see signs of a rebound.
"I'd like to think I bought it during a buyer's market, and I think when I unload it, I'd like to think its a seller's market," she says.
But there is disagreement about whether there was ever a buyer's market in Ocean City. While the Lippman report suggests that a rebound is being driven by over-anxious sellers, brokers think otherwise.
"I think property right now is reasonably valued and reasonably priced and you have cooperative sellers," says Jim Waggoner, manager of Long & Foster Realty in Ocean City.
But Wagoner, who says his office is "unbelievably busy" right now and logging some of its strongest sales records since the office opened in 1985, says he does not see Ocean City as a buyer's market.
"We're not seeing foreclosures here, we're not seeing desperate sellers," he says.
Dan Clayland, vice president of Miller & Associates, also takes exception to the Lippman report's assertion that sellers are too eager. Clayland says sellers listing with his Ocean City firm may be pricing their homes more realistically but they are selling them at no less than 96 percent of their asking price.
But Brooks says brokers typically don't like to admit when prices may be softening, fearing it may frighten buyers into believing properties are no longer appreciating.
Brooks says that, while ocean-front properties may have stable prices, better deals may be found among properties that are set back from the ocean or situated along the bay.