Hot times on the beach

Ocean: Short supply and growing demand have created a rising tide of prices for beachfront property.

September 16, 2001|By Lisa Wiseman | Lisa Wiseman,SPECIAL TO THE SUN

The kids are back in school. The weather is turning cooler. And the last hurrah of summer in Ocean City comes next weekend with the annual Sunfest celebration.

Ocean City: home to sand, surf and surging real estate values.

As in many neighborhoods in the Baltimore metropolitan area, sales of residences in this vacation resort, as well as the Delaware beaches, are still seeing a high level of activity.

"We are in a kind of unique market," said Lauren Alberti, an agent with O'Conor, Piper & Flynn ERA. "We have little inventory and our market [of buyers] has grown. It is not just Washington, Baltimore and Philadelphia, it is New York, New Jersey and Connecticut."

Last month there were 379 residential properties for sale in Ocean City.

Of those, 47 were single-family detached homes.

Want a new condominium or townhouse? Only 115 were listed, but many of those are under construction and will not be ready for settlement until 2002. That left only 217 available re-sales of townhouses and condominiums.

"Well, it's definitely a sellers' market," said Joe Wilson of Moore, Warfield and Glick. "Sellers are naming their price and getting it." It's a simple matter of supply and demand, he said.

"There are 350 agents in town," Wilson said, "and each one of us has a group of clients and we are all calling them and we are all trying to get a contract."

Alberti, who sells primarily in Bethany Beach, easily gave examples of how prices have increased for oceanfront properties.

One buyer purchased two side-by-side units - for $590,000 and $610,000 - at Seaside Plantation, a new construction project on 123rd Street in Ocean City. He combined the unfinished units into one and added finishing touches costing $300,000 to complete the project to his taste.

Along Delaware's Middlesex Beach, a bayside home that Alberti sold for $152,000 in December 1999 was resold for $300,000 this month.

An unimproved lot listed at $359,000 sold in days for $385,000.

Alberti acknowledges that even though the economy shows signs of softening, she doesn't see the same happening in the resort marketplace.

"When resales come on the market ... [chances] of them staying on the market for very long are slim [and] I think if there are buyers who are waiting for [a slowdown] to happen, they will be surprised when it doesn't."

Bob Wisner was one of those people who last year bought a place sight unseen. "I didn't see it until settlement," he said.

He and his wife, D.J., had wanted a three-bedroom condo at the Golden Sands property in Ocean City. "We knew the building and the floor plans and told our agent to contact us as soon as a place was available."

The couple got the call last year while vacationing in Lake Tahoe, Nev., and felt that they should jump at the opportunity for an oceanfront condo that didn't need a lot of updating.

Tangible investment

Wisner said he and his wife are treating the home as an investment and a vacation home. They rent out the place during the majority of the summer and use it themselves for a week or two during the peak season and during the rest of the year.

"There were already renters set up when we bought the property," he said. "We wanted an investment we could enjoy."

The couple is considering purchasing two more units as investments for their two sons, who are 4 and 5 years old.

If the Wisners do buy at the Golden Sands this year, they will have to pay more than they did last summer.

Prices at the luxury building range from about $169,000 for a one-bedroom unit to $400,000 or more for three-bedroom units. Compare that with the $85,000 to $300,000 selling prices just last year.

"Overall prices have gone up 30 percent, sometimes even more, over the past two to three years," said Ken Church, an agent with Coldwell Banker.

"It's a crazy, fantastic market," said Mark Fritschle of Prudential Caruthers Realtors. "People who looked at places two years ago and did not buy are now coming back to me and saying `Whoa!' about the prices. They are getting higher and higher every day, especially for the nicer, luxury buildings."

For example, a two-bedroom, two-bath and den condominium at the Plaza sold for $174,000 in 1995. A similar unit in the Plaza sold for $308,000 this year. A two-bedroom unit at the Sea Watch on 115th Street, purchased for $121,000 in 1996, just sold for $220,000 in June.

"If we were looking now, we could not afford to buy," said Cindy McCarty. She and her husband, Dennis, purchased a condo near the Ocean City-Fenwick Island line two years ago. "The place has gone substantially up in value. It's amazing."

Current listings show units in her building on the market costing almost 60 percent more than the price they paid two years ago. Still, the couple did not buy the condo to make a killing in the real estate market. "We bought it for ourselves and our family," she said.

"At the time, we figured even if it never increased in value it would be worth it to us. ... It was not intended to be an investment. It's an investment in relaxation."

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