Home > OC News > September 2006

9/22/06 - Foreclosures
9/21/06 - Bridge
09/07/06 - Housing Market

Foreclosure trend not catching on in southern N.J.
Press of Atlantic City
Published: Friday, September 22, 2006

The U.S. real estate market is showing another sign of heading south, while this region remains reluctant to follow.
As home prices skyrocketed the past couple of years, economists worried that buyers might not be able to keep up with their big mortgage payments if the economy slowed.

They repeatedly warned that buyers using adjustable rate mortgages, often sold with artificially low initial "teaser" rates, might find themselves in the hole if (or when) interest rates went up.

Now that house prices have started dropping in many areas of the nation and rates have risen a little, the watch is on for signs of distress among homebuyers. Nothing impairs one's ability to consume, and keep the economy growing, like taking a bath on one's biggest purchase.

The first alarm bells have sounded.

Last week, the Mortgage Bankers of America reported that foreclosures on adjustable-rate mortgages rose 29 percent to a four-year high in the second quarter of this year from the previous quarter.

Foreclosures are recorded when a lender tries to seize property for nonpayment of the loan or the overloaded borrower simply walks away from it.

RealtyTrac, which maintains a national database on foreclosure properties, reported the same day that they increased 24 percent for all loans just from July to August.

How far this trend goes will depend on a confluence of factors, including stagnating household incomes and rising expenditures on energy, property taxes and insurance. If energy prices and interest rates moderate, we probably won't see a lot of people losing their homes.

In southern New Jersey, an increase in distressed homeowners is even less likely.

RealtyTrac's figures for the region show that foreclosures in Atlantic County actually fell 19 percent from the first to second quarters of this year. In Cape May County, the drop was 18 percent, in Cumberland County 48 percent, and in Ocean County the decline was 37 percent.

Economist Richard Perniciaro, director of the Center for Regional and Business Research at Atlantic Cape Community College, said strong demand for housing in the region is keeping the market in better shape than most.

"The people who are buying are people who have been coming here all their lives and they didn't look anywhere else," he said. "So we have a pretty sure flow of demand, and that will only get bigger as the boomers retire. New Jersey might have the most Baby Boomers of any state."

Home prices in the region were up 15 percent in the second quarter, a smaller increase but still an increase, he said.

"What really would cause our market to falter would be if people wait six or eight months to buy," Perniciaro said.

But even that would be temporary.

"People just want to be here," he said. "They've planned for 10 years to buy into here."

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Five-year job to cost $400 million
Heavy construction to start next month
By MICHAEL MILLER Staff Writer, (609) 463-6712
Press of Atlantic City
Published: Thursday, September 21, 2006

OCEAN CITY — Work finally began this month on the new Route 52 causeway, the most expensive road or bridge project ever undertaken in southern New Jersey, after years of delays and much anticipation.

Construction crews began clearing a staging area and set up an on-site office on Garrets Island near the Ocean City side of the causeway. Several heavy trucks and a mammoth crane bearing an American flag were poised at the water's edge Wednesday.

The 2.5-mile-long causeway project is expected to cost $400 million when both phases are complete.

The new causeway will have four wide lanes, an emergency shoulder and a separate walking and bicycle path. It will have a boat ramp, fishing piers and places to fish from the bridge.

“It's good to see the project begin. The sooner it begins, the sooner it will end,” Ocean City Mayor Sal Perillo said. “It's not just the amount of money but the amenities the state is building into the project.”

“Heavy construction will start in early to mid-October,” said Erin Phalon, spokeswoman for the state Department of Transportation.

The first half of construction calls for rebuilding the 1.2-mile-long interior portion of the new causeway from Garret's Island across Rainbow Island to Elbow Island. The second half of construction will replace the two exterior drawbridges with fixed spans, rebuild the Ocean City Welcome Center and eliminate the Somers Point traffic circle.

The completion date is Memorial Day 2011.

The Route 52 causeway is a major link between Somers Point and Ocean City, and Atlantic and Cape May counties.

“There's no question over the next four years there will be disruptions and inconvenience,” Perillo said. “We'll work through it.”

The old causeway is scheduled to remain open throughout construction. On Wednesday, one of the two northbound lanes was closed. Phalon said that lane closure was temporary.

Meanwhile, Perillo said the city was advised that the causeway will see more lane closures later this year to repair the southern drawbridge that tends to expand in hot weather.

“It's a good feeling to see that crane,” said Assemblyman Jeff Van Drew, D-Cape May, Cumberland, Atlantic. “The important issue is to ensure that as construction takes place, we deal with other hazardous traffic conditions in southern New Jersey.”

Van Drew said he would push for new ramps at Exit 20 and the reopening of the Beesleys Point Bridge.

Cape May County Engineer Dale Foster said he is most concerned about keeping the old causeway open through the five-year construction schedule. Any prolonged causeway closure could stress the 34th Street Bridge to Ocean City.

Vibrations from pile-driving on the new Ocean City-Longport Bridge forced the closure of the old Ocean City-Longport Bridge more than a year earlier than planned and created miserable traffic jams on the island.

For this project, the state moved the new causeway farther from the old spans to prevent a similar problem. But Foster said that might not be enough.

“The existing bridges are still in poor shape. They still have to survive a few more years. Something could happen to them that is not construction related. Like old age,” he said.

The city plans to take advantage of the construction to dump dredge spoils.

NJ Transit spokesman Dan Stessel said construction might affect which lanes buses may take on Route 52 but will not interrupt passenger schedules or require detours.

“The level of coordination that has taken place between NJ Transit and the DOT has been very robust,” he said.

A public meeting on the project is scheduled from 4 to 8 p.m. Wednesday at Dawes Avenue School in Somers Point.

The official ground-breaking will take place next month, Phalon said.

To e-mail Michael Miller at The Press:MMiller@pressofac.com

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OCEAN CITY — As tourists stow their beach bags for another year, Ocean City is getting ready for the launch of its second industry: teardowns.

Builders say they are seeing a dramatic slowdown in home construction on the island, reflecting a national trend. That could spell fewer demolitions, new homes and jobs on the island this fall.

“Our busy season usually starts in the fall. I hate to say it, but it's not going to be half as busy as past falls,” said Mark Tietjen, manager of Peter Lumber in Ocean City.

The New Jersey Builders Association said the number of home starts is down 15 percent statewide over last year.

“The slowdown is gaining momentum,” trade group spokesman Patrick O'Keefe said. “The watchword in new home construction is inventory management. Builders are not starting units unless they have firm commitments of sale.”