Seashore - Cape Home Values Grow, Despite Nationwide Crunch
Thursday, February 28, 2008
Cape home values grow three percent despite nationwide crunch
By BRIAN IANIERI Staff Writer, 609-463-6713
Press of Atlantic City
CAPE MAY COURT HOUSE - For years, the growing value of property in Cape May County has been its own economic force, posting double-digit percentage increases each year since 2001 and bolstering revenues from property transactions.
But figures from 2007 show the lagging national home market has hit Cape May County's ratable growth.
It grew about 3 percent for a total value of $54.6 billion, according to preliminary figures from the county Board of Taxation.
During the past seven years, the increase averaged about 19 percent per year.
"All in all, 3 percent is not a bad number in a very bad year," said Richard Perniciaro, director of Atlantic Cape Community College's Center for Regional and Business Research.
Experts said the county's demographics - many homeowners and potential buyers who have the time and ability to wait out the market - make it stabler than other areas of the country hit harder by a sagging market.
The ratable base is the overall value of property that governments use to determine county, school, municipal and fire taxes.
"We still don't have evidence for anything other than a decline in sales volume, and that seems to be across the board. Our major selling area is Ocean City, and their volume is down proportionately to the other communities," said George R. Brown III, the county's tax administrator.
"The volume's down, but the selling prices are still up. I have been through a couple of these down cycles. What happens first is the sales volumes decline, and then the values decline. That's not unusual. It's whether or not the values will decline. We don't really have enough evidence to make that conclusion. Certainly things have slowed dramatically," Brown said.
Because the value of property increased dramatically during the housing boom, the county and some municipalities could reduce their tax rates while maintaining or increasing their budgets each year.
Cape May County, which saw nine straight years of significant cuts to its tax rate, will not reduce its tax rate this year, Administrator Stephen O'Connor said.
Also in 2007, fewer properties changed hands, which means Cape May County collected less money from realty transfer fees through the county Clerk's Office.
Revenues decreased about $600,000 from the previous year, according to County Clerk Rita Fulginiti.
The revenues at the Clerk's Office grew significantly from $5.1 million in 2002 to $9.6 million at its peak in 2005, according to office statistics.
"The numbers reflect the ebbs and the flows of the real estate market," Fulginiti said.
In 2007, the total revenues were about $5.8 million.
Whether the market has bottomed out will depend on a lot of factors, including the public's attitudes and confidence in housing markets and favorable mortgage rates.
"(As) a primarily seashore resort community, the demand for Cape May County properties has always been great. So we have survived, virtually gone through some of these cycles unscathed. It's been practically unheard of there to be a loss in value for properties in towns like Stone Harbor and Avalon. That's part of what drives the high demands: You've never had a loss in values. Values keep going up: It's almost guaranteed," Brown said.
Cape May County has many discretionary buyers and sellers - people who don't need to move immediately, as for a job, and can wait, Perniciaro said.
"I think people are sitting and waiting. There is a larger overhang of unsold property, things that are sitting on the market longer," he said.
"I would think quite frankly in an election year mortgage rates will be good. There's a lot of political pressure to keep them lower and manage them," he said.
To e-mail Brian Ianieri at The Press:
BIanieri@pressofac.com
To see the original Press of Atlatic City Article, click this link:
http://www.pressofatlanticcity.com/news/local/capemay/story/7525970p-7427195c.html
Published: Friday, January 4, 2008
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