Joan Farrell Ocean City Real Estate

North End, Ocean City  -  Announcing a price reduction on 839 Fifth Street, a 3 bath, 4 bdrm townhouse "Two story reverse floor plan". Now MLS® $609,900 - OCEAN VIEW! REDUCED!!.

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Weathering a highly-publicized storm like Irene was a great learning experience.  I was lucky enough to have power, cable and internet access throughout the storm, and this is what I learned:

1)   The Weather Channel has high entertainment value and can also provide a source for warnings and tips, but its primary function is to attract viewers, not to educate.

2) Local news stations can fall victim as well to the entertainment trap.  It is disconcerting to watch a reporter lean into the wind and talk about how hard it is to stand up while someone is riding by behind him on a bicycle.

3)    It is invaluable to have access to two specific websites:  The National Hurricane Center (NHC) at http://www.nhc.noaa.gov/ and the National Data Buoy Center (NDBC) at http://www.ndbc.noaa.gov/ .   I narrowed the map on the NDBC  to cover only our region and bookmarked that to make reference easier.  Both of these sites are manned and maintained by the National Atmospheric and Oceanic Administration (NOAA), a federal agency whose roots go back to 1807  http://www.noaa.gov/.  Their data is the most important source for weather forecasters covering coastal areas.  Their sites are easy to use and you can just explore and learn all kinds of things.

4) While the Weather Channel was predicting 75 mile per hour winds in our area with higher gusts, its internet site, www.weather.com  was calling for winds at 40 mph, rising to 50 - 60 mph during a three hour window as the eye approached.  At the same time, the NDBC offshore buoys that record and transmit wave height, water temperature, air temperature, pressure and wind strength and gusts, were showing wind speeds of no more than 35 knots anywhere from north Jersey to Virginia Beach six hours before the eye of the storm was expected to reach us.  At the NHC, the wind probability data was showing that Atlantic City could expect winds of 34 knots or more (about 40 mph), it was highly unlikely that it would see winds over 50 knots (57.5 mph).  

5) Because hurricanes are classified by wind speed, everyone focuses on wind.  The danger of a huge storm like Irene is that the bigger the storm, the more moisture it holds. Radar during the storm was showing extreme bands of rain to the north and west of the eye, yet the media stayed focused on the what-ifs at the shore and in New York City, not emphasizing the risks of severe flooding to the north. Check out rainfall maps from the storm and you can see that New England had by far the worst flooding, with roads and bridges destroyed in many locations.

6) No one seems to know how to measure a storm surge.  The television media kept referring to the surge as "above ground level" while my understanding was that it was measured from mean sea level.  Turns out I had it right. You then add the surge to the predicted tide to get an idea of how high the water will be (the storm tide).  If the land you are on is at risk of flood at a normal high tide, then it is safe to say that the storm surge would be "above ground level."  

7) The projected track was highly accurate.  I just got my Saturday Atlantic City Press that had a map of the projected storm track, printed Friday night.  Bingo.

8) Real data from my home weather station:  Maximum wind speed: a single gust at 62 mph, well below what we have seen in some winter storms.  Highest winds from about 4 pm to 9 pm Saturday, with relatively steady 20 - 40 mph following that.  More than 9 inches of rain.  Having had a station for about six years, I would not want to live near the shore without a good one.

9) TWC (the Weather Channel) is not a good thing to watch if you are in the storm being covered.  AMC (American Movie Classics) is much better for the blood pressure and sanity.

It is now just before midnight, Saturday August 27.  Irene is scheduled to pass by in a few hours, with the worst of the storm from 1 am to about 4 am.  Right now in Ocean City, we have winds hovering around 25 mph and a very light rain.  This has been the general condition since about 8 pm when we recorded a gust of 62 during a heavy downpour.  Having a working weather station that we can monitor from indoors really helps separate fact from feeling! 

I did step outside to dump the rain gauge, which had registered over 5 inches of rain since the start of the storm.  It is warm, mild and relatively calm here, but we are bracing for what is coming.  Our house has vaulted ceilings and clerestory windows and heavy rain and wind make quite a racket.  We could retreat to our lower floor, but it is full of porch and patio furniture, awnings and outdoor equipment.   

We expect the eye to pass by between 4 am and 5 am, while the tide is still low.  The wind will shift to the west and push water out of the back bay and away from the beaches.  If the track and forecast hold, this news is about as good as it gets with respect to bayside flooding. 

We have not lost power at all, and had a slight disruption of cable and internet for a few minutes, just once.  At least we don't have to worry about trees coming down across the wires. 

It looks like there is some conflict in the latest reports, but it is clear that you have to be a long, long way from Ocean City, NJ to get away from Irene.

I walk every morning with our dog, sometimes along the beach, sometimes heading cross-island toward the bay and back, all depending on whim and wind.  Each morning is different, especially in April. 

One day last week, the air was warm and the wind off the ocean. The chop was building on the water, and the ground fog obscured all but the tops of the tallest towers in Atlantic City across the inlet.  For the first time this season, I could smell the sea before I crossed the dune line.  That salty, briny, earthy rich smell that is the North Atlantic was back.  For me, on this charming sand bar that I call home, it is as much a sign of spring as the greening of the grass or the song of the robins.  Although there were others out and about, the sea fog dampened all sound and wrapped us in solitude.

The following day, the dog and I lowered our heads and beat to windward against a driving rain in a strong northeast blow.  The ocean boiled, looking angry. Not even the dog wanted to sniff for signs of spring.  The mercury dropped, the barometer dropped, and our spirits dropped with them.  This time, we were the only fools in sight.

All it takes is a simple change in wind direction to change everything.  By late afternoon the wind had shifted, the clouds blew away, and a confused and angry ocean had sorted itself into a beatiful ground swell while the west wind stood the waves up nicely and blew the foam off the crests.  The rollers in the inlet looked like steam locomotives under full power as they raced toward the bay.  Along the boardwalk, surfers were taking full advantage of the longer daylight to enjoy perfect surf conditions, riding waves as the lowering sun lit up the crests like spotlights on their efforts.  

Tomorrow, we will walk again.  The wind will tell us which way to go, but only time will tell what we will see.

The Standard and Poors 500 gained only 4% over the last decade.  The Ocean City real estate market gained 81.5% over the same period, making it the clear winner even before one considers the intangibles.  Investors in seashore property faced the same kind of risks that Wall Street investors did, and both markets exhibited a roller-coaster performance over the decade.  At the shore, the ride was often as wild, but the views were much better. 

Those purchasing early in the decade were the clear winners, and those buying in late 2004 and onward might have suffered a loss if they were to have sold in 2010.  The worst hit, as expected, were those who bought in 2005-06, when irrational exuberance was the norm, it seemed like everyone had become developers, and new construction projects were trading like futures, with two or three flips before a building was finished.  Buyers in that time period are down 20 – 25% on average. 

Perhaps the biggest losers were 2004-2006 buyers of dated 4BR/2BA beachfront condos on 40 x 100 lots.  These buildings typically had carports or garages with low ceilings and first floors with negligible views.  Those owners, selling today, are looking at prices 20 – 33% below what they paid.  The newer beachfront condos are facing a different kind of loss – loss of buyers.  There are simply far fewer buyers of the highest-ticket properties, and increasing inventories.

But how about the market as a whole?  It is such a diversified market that any shift in the mix of properties sold can skew the overall statistics.  The average sale price is about $500,000, but the inventory includes $40,000 hotel efficiency units and $5,000,000 beachfront condos. Priced at just about $500,000, the 3BR/2BA duplex condo is the closest the market comes to a commodity in terms of availability, similarity, and popularity.  Those owners saw improvements in value of up to 93% if they purchased in 2000; losses only as high as 15.6% if they bought in 2005, and have actually seen price increases since 2009.  The inventory of these properties is being depleted, and as a result we saw fewer sales in 2010 but at an average price 7.5% higher than in 2009.  The attached performance graph tells the story.  We also saw a big jump in activity for 4BR/2BA condos, with a more than 60% increase in the number of units sold from 2009 to 2010, and with stable pricing.

Those who have relied on summer rental income to help defray some of the costs of ownership found rental occupancy fairly steady throughout the period, with more fluctuations due to weather patterns than to the economic climate.  The average owner might maintain that rental pricing has seen little improvement in the decade, but a quick check of some rental histories do not bear that out.  One of the premier beachfront properties was renting for $7000 per peak week in 2000, and commands a healthy $17,000 today.   Other less unique properties have not seen that kind of climb, but an increase in asking price of 25% over the period is not unusual.