CAPE MAY COURT HOUSE — The COVID-19 pandemic changed the real estate market in many ways that continue to alter the demographics of Cape May County.
Homes once vacant for half a year now are being occupied full time, either by those with the ability to work from home or others who discovered the slower lifestyle of life and didn’t want to go back to the hustle and bustle.
The demand, especially in barrier island communities, has long passed uncharted territory and now is making its way into the mainland towns.
The Cape May County Chamber of Commerce hosted a panel discussion May 8 at Avalon Links Restaurant regarding the state of real estate in New Jersey’s southernmost district.
“Realtor Perspectives on Modern Challenges” featured experts in the field from agencies representing coastal and mainland communities on the peninsula.
— Patricia Gray Hendricks, broker-associate, Long and Foster Real Estate in Cape May
— Dutch Dechert, broker owner, Ferguson Dechert Real Estate in Avalon
— Rachel Mammele, broker-associate, Freda Real Estate in Sea Isle City
— Micah Yerk, managing broker, deSatnick Real Estate North Cape May office
— Kathleen Satt, broker-associate, deSatnick Real Estate
Tanya Curran, an agent with Keller Williams Jersey Shore from Upper Township who works mostly on the mainland, attended the forum hoping to learn more about the county.
“I want to see the perspectives from the other brokers in the area and talk about the trends of what’s happening,” she said.
Curran said lack of inventory, rising prices, high interest rates and economic uncertainty are hampering the industry.
“We call it the Golden Handcuffs — the interest rates that they have now are very low, so they have the equity and can sell their house and make a good amount of money to put on the next house, but now the interest rates are higher, the cost of the next house is much higher — there is no financial benefit for them to do it,” she said.
Panel discussion
Hendricks organized the event and also served as moderator, asking questions and following up amid the free flow of thoughts from the panelists.
The COVID-19 pandemic that began in 2020, killing more than 7 million people worldwide, 1.4 million in North America, had a dramatic effect on shore real estate.
Due to forced isolation, millions of workers started doing their jobs from home. The fortunate suddenly realized they could do the same thing from their shore house. They quickly flocked to them in droves, staying into the fall, winter and spring, only to find themselves back there the next summer.
According to Mammele, the secret was out. What was obvious to locals for centuries — that the county is a terrific place to spend more than just the summer — was catching on with the city folk. And some of them decided to stay permanently.
Mammele said the area is now seeing a different group of people who no longer have to work in an office five days a week.
“If you have a job in Philadelphia or New York or Connecticut, you can still drive to that job and be in the office one day a week, but have the luxury of working from home from here. Imagine opening the door in the morning and seeing waves crashing. It’s a whole different reality than what was available 10 years ago, and I think people really like it,”
Dechert called it the one positive to come out of the pandemic, noting the county is within a five-hour drive of 25 percent of the nation’s population.
He said people staying through the winter resulted in more people seeing what there is to do besides going to the beach.
“There’s so much diversity — beach, woods, horse farms — there’s just so many reasons why people want to come down here,” he said. “The beaches are great but there is so much aside from the beaches that Cape May County has to offer, contributing more and more to people moving here year round.”
Yerk agreed.
“CMC is a very unique place and experience. It’s founded on small businesses and unique individuals, which isn’t the flavor of the entire state. So when you get a taste of that down here, it’s hard to let it go,” he said.
Market growing
Mammele said the market is growing because people are increasingly moving full time into their former second home, noting it’s a bonus that people continue to buy vacation homes.
“We have a nice balance of that,” she said.
Dechert, who works primarily in Avalon, Stone Harbor and Sea Isle, said the demand is incredible.
“People just want to be here,” he said. “I’m amazed at the prices properties are going for on the island and I’m amazed at the age of the people paying the prices — and it’s not just because I’m getting old.”
Satt said there is greater demand for real estate in the county than ever before, noting the secondary market insulates the area somewhat from broader national trends.
“Inventory is record-low and demand is record-high, and we’re seeing more and more cash buyers coming into the market, and that’s coming from the cities. The population of the cities will always be what’s pushing people toward Cape May County,” she said.
Hendricks said that despite the low inventory, the demand continues and the prices keep rising.
“For every disenchanted buyer that leaves the market, there are three that come in — it’s like a revolving door,” she said.
Yerk said there simply are not enough homes for sale.
“When you have a place that’s so exciting to move to and buy homes in and there’s not enough of it, that’s going to push the price up and we’ve seen that since before COVID and that just put it into hyperdrive,” he said.
Satt said prices in West Cape May have doubled and do not look to be stopping. Those who are selling are moving to North Cape May or Cape May Court House, as close enough to the beach, driving prices up there in turn.
Satt said the prices are trickling down.
“When looking at a more national market, if you are looking to buy in the Hamptons and Avalon is a steal at $16 million, Cape May is a better deal at $3 million,” she said.
Hendricks agreed.
“We have an edge where we are not as expensive as other towns,” she said.
Dechert said prices in Villas are now “skyrocketing,” affecting prices in other areas.
Mammele said increased demand is driving buyers to the area from farther away.
“They can’t find what they want in their original target area, so they are broadening their search and we are very enticing down here,” she said.
Yerk said low county taxes are also attractive to buyers.
Dechert noted New Jersey has the highest property taxes nationally but Cape May County is a lot different than those up north.
Lower taxes may be part of what’s driving plans for “a large number of homes in Middle Township and Lower Township,” which Hendricks said she is privy to as a member of the county planning board, because that’s where there is vacant land.
People continue to find ways to create more living spaces.
Yerk said the lack of land on the islands is driving more subdivisions and flips. Mammele noted homes that used to be vacant in Tuckahoe are now being rehabbed.
Dechert said he sees more and more demolition, noting he lives in a “$2.8 million teardown.”
Technology
The pandemic also changed the way real estate agents advertise, show and sell homes.
Demand immediately exploded along the shore, but with contact restrictions and the speed at which transactions were taking place, agents were forced to find new ways to show homes.
They began filming homes with their cell phones or streaming the view via an app. Programs such as Mattefort provided a way to show a 3D image of the home, both inside and outside, and allowed people to move through. Now many listings come with a virtual tour.
Mammele said she sees technology as an opportunity to reach more potential clients.
Yerk noted it has its challenges.
“Sometimes there is a dissonance between what they see and reality,” Dechert said.
Satt noted that many rental homes now have cameras, and the owner can check to see what’s going on in their home.
“Technology is a double-edged sword,” she said.
– By CRAIG D. SCHENCK/Sentinel staff