Lower prices, rates lure buyers in Ocean City


July 25, 1992|By Greg Tasker | Greg Tasker,Staff Writer

OCEAN CITY -- After years of looking, Michael and Cindy Watkins of Arbutus decided the time was right to buy a condominium in this resort town.

"We got a good deal," Mrs. Watkins said. "You couldn't beat the price for a three-bedroom, two-bath unit on an ocean block."

The Watkinses, who delayed buying during the recession, bought the unit on 139th Street for $88,500. It was financed by the seller at 9 percent interest.

As the Watkinses worked toward completing the sale, three other prospective buyers came forward offering contracts on the unit.

"That's the first time I've seen that happen in a few years," said Max Trapp, a real estate agent for RE/MAX in Ocean Pines. "It's an example of how things are starting to pop here."

Lower interest rates and lower prices have given a boost to the real estate market in the first half of this year, pushing settled sales of vacation homes beyond the totals for the first half of 1991, according to the Greater Ocean City Board of Realtors.

The outlook for the second half remains murky.

"It's no secret that the past few years have been bad," said Mr. Trapp, who also is president of the Realtors board. "But things are definitely picking up."

During the first six months of the year, 710 single-family homes and condo units were sold in Worcester County, up from 676 units for the same period last year and 665 in 1990.

Besides Ocean City, the county includes developments such as Ocean Pines that are west of the bays that separate the resort from the mainland.

"The activity has been primarily here in Ocean City and the bay area," said Jean H. Jerread, the executive officer of the Realtors' group.

Of those sales, 474 were condounits, up from 454 units in the same period last year, according to the board's figures. Ninety-nine percent of the condos were in Ocean City, said Laura Bussink, multiple-listing sales coordinator for the board. But pending sales are down compared with the previous year's level, to 873 from 955.

The drop in the number of pending sales is not unusual, said Bob Lefenfeld, vice president of Legg Mason Realty Group in Baltimore. "We're seeing that in a lot of markets," he said.

The decline is indicative of the overall economy, Mr. Lefenfeld said. "Traffic has slowed down," he said.

Nevertheless, real estate agents remain optimistic about the year's prospects.

"This year will be as good as last year and a lot better than two years ago," said Dennis M. Roarty, general sales manager for O'Conor, Piper & Flynn. "We're in a fairly stable marketplace. Ocean City is a stable area. There are some very good values here right now."

Like the economy, the real estate market appears to have bottomed out in Ocean City, with sales of condos and single-family homes on the rise after declining in the mid- to late-1980s, according to a report by consultants Lipman, Frizzell and Mitchell.

In the Lutherville firm's annual "Ocean City Revisited" report, it noted that condo sales, which plunged in 1989 and 1990, increased 8.6 percent in 1991. Declining prices have stabilized.

The average price of a condo unit or single-family home has dropped from $105,000 in 1990 to $97,335 this year.

"It hasn't gone down as much as buyers would like," Ms. Jerread said, "but it's still a buyer's market."

F. Basil Burwell, sales manager for Moore Warfield & Glick in Ocean City, said the resort was attracting families and investors from New Jersey, New York, Pennsylvania and Ohio.

"Sales are great," he said. "Our sales are up 28 percent from last year. We're very happy."

On a recent Saturday, 25 people attended an open house for a two-bedroom, oceanfront condo on 145th Street, he said. The unit, listed that day, sold that afternoon for about $140,000, he said.

"The oceanfront is still more popular," Mr. Burwell said. "But the bay side is coming on strong. Interest rates are still low. We're still seeing adjustable-rate mortgages in the 5 percent range."

Lot sales also have been brisk.

Sales at Assateague Point, a bay-front resort community, were 30 percent higher in the first six months of 1992 than in the first half of last year, said Troy Purnell, one of the owners of the 522-lot development.

His firm has sold 43 lots this year, up from 33 the first half of last year, he said.

"I think affordability is the bottom line," Mr. Burwell said, noting that a furnished home and lot sell for about $44,000 at Assateague Point. "We have a lot of second-home buyers wanting something affordable at the beach."

Barry Weir, sales manager of English Realty's Ocean Pines office, said lot sales have remained steady.

"I haven't seen a major boon in lots," he said.

Agents say the rental market also has been doing well.

"We're about neck and neck with last year," said Dee Rigsby, director of rentals for O'Conor, Piper & Flynn. "The week before July Fourth was real busy. It's a little slower than last year, but people are starting to come back."

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