OC: boom or bust
By Don Klein
 
The speculators have gone, the flip artists are no longer flipping, and the Ocean City condominium building craze is settling down to a sensible pace. The real estate boom may be over, but there is still plenty of good business being done.
 
There is still a market for three bedroom oceanfront or bayfront condos with a view at prices around $1.4 million. However, those dwellings in the interior along Coastal Highway or on the side streets with inconsequential views are described as “dead.”
 
That may be a harsh term, but from a developer’s point of view, with the increased cost of land and construction, the best return on investment depends to a great extent on location. That’s been a real estate axiom for as long as people have been buying and selling land.
 
“Besides a great view, condo buyers demand a pool, fitness center, granite kitchen work tops, stainless steel everywhere, boat docks, all the amenities,” according to Ocean City developer Jeff Thaler. “Customers are more select,” he said, they do not settle for just a place to flop.
 
There is a distinct difference in appeal between new sales and resales, mostly because of amenities. This is forcing many long time owners who wish to sell condos they have had for some time to reduce prices in order to counter the higher priced new dwellings which include contemporary modern appurtenances.
 
Mr. Thaler, a partner at Atlantic Coast Developers, explained that the seaside real estate market has returned to its normal level of activity after a wild ride of three or more years when condos were springing up so fast that many residents began to worry that Ocean City might sink into the sea.
 
Speculators who knew little about Ocean City real estate saw a way to make a quick dollar and bought up every available acre during the boom to furiously built condos. Many of them sold the units as soon as possible, some even before they paid off on the deal according to some developers. This is called “flipping,” and is a way to corner quick cash.
 
“Now things have settled down to pre-boom days,” Mr. Thaler said, “the flow of construction is easing and good steady sales by long term investors will eventually absorb the available condo market.”
 
He added there is no lack of buyers, “The right product, at the right time and place, is selling.”  In previous years, he explained, there were some 500-600 condo units on the Ocean City market each season.
 
Currently the available condo market has increased to about 1,600 units estimated Dan Clayland, real estate team leader at Coldwell Banker. “Business today is as steady and good as it was in 2003,” he explained, “we were on the speedway in 2004-2005, but now we are back on a regular highway.”  According to Mr. Clayland, the current market breakdown includes some 1,000 resales in addition to just over 600 new units.
 
Atlantic Coast Developers, whose other partners are Jay Bergey and Lewis Bush, have two projects that are now on the market and doing relatively well, Mr. Thaler said. Bahia Vista, at 10th Street and the Bay, is a 60 unit complex which is three-quarters sold and Oceans Mist at 6th Street and the Boardwalk with a dozen units is also three-quarters sold even though the construction phase will not be finished until later this month.
 
Most of these units are being purchased for more than $1.3 million each and are good investments because the rental business is flying high these days. Condo owners rely on 10-15 week rentals to pay off their annual mortgage and insurance costs and that equation is healthy at the moment.
 
Actually, there are many more units being offered but many of them are still in the planning stage and probably will never be built. Cost of land and construction is up about 45 percent from pre-boom days.
 
Oddly enough the hot properties these days are along the Boardwalk, which at one point was considered honkytonk. The 130-year-old seaside resort, which for decades drew thousands of hormonal teenagers and was the destination beloved by blue collar families as an inexpensive getaway, is gaining a new upscale image.
 
That slender stretch of island between the Atlantic Ocean and the Bay still has its piercing parlors, endless bars and more miniature golf courses than you can count on both hands and feet. But merchants are also starting to condition themselves to cater to an influx of high-end condominium buyers who want flavored martinis and do not flinch at $100 menus.
 
Whether visitors count themselves among the virtually disappearing blue collar crowd in the area or the fashionable latter day high spenders, Ocean City's main attraction remains the endless diversions that appeal to all -- golf, sport fishing, parasailing, arcades, skateboard parks, fine restaurants and miles of wide, clean, sandy public beaches.
 
This change is most easily noticed in the real estate market which has brought to the surface another hidden problem. The recent boom years gave birth to the extraordinary growth in the number of agents selling real estate. Although figures are not available, it is generally felt that everyone and his brother went into property sales during the boom years with an eye to making lots of money and now with business settling down there are too many real estate sales people to keep them all busy. 
 
In the end, the resort has been regenerated, has put on a new look, has embraced and integrated a new style of resort living with the old, and became like the old Parisian adage: The more things change, the more it remains the same.

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