Ocean City Maryland Condo Sales Plummet!

The real estate condominium market in Ocean City Md has continued to deflate and spiral downward towards  the doldrums of the late 1980′s and early 1990′s. It has truly now become a buyers market, with a historic high number of condo units for sale and monthly sales (settlements) dropping by almost 40 percent for the first 3 months of 2006 compared to 2005. Coastal Hwy in Ocean City MD is now afloat with unsold NEW condo’s in the midst of a drought in the number of anxious buyers who seem to have disappeared from the scene over the past year.

Data reported by the local MLS (Multiple Listing Service) indicate that as of March 31, 2006 there are 1600 condominiums listed for sale in Worcester County MD (Primarily Ocean City properties), compared to 1081 as of March 31, 2005. Coupled with the significant increase in available properties for sale is the substantial decrease in actual sales (settlements), which have dropped by 39 percent compared to the previous year.

Source: Coastal Association of REALTORS

 One wonders what factors contributed to these market conditions. Rising interest rates, recent high buying activity by speculators, overbuilding by real estate developers anxious to bring their condo’s to the marketplace, high gas prices, energy costs rising, real estate taxes skyrocketing, rising home and flood insurance costs,  uncertainty about the economy, etc….   Certainly all of the above play some role. Ocean City MD is not alone with a BURST BUBBLE in 2nd home condo sales. Statistics reported by Florida’s Real Estate Industry reflect a similar sharp downturn in condo sales, coupled with comparable significant increases in available inventory of unsold condominiums.

Source: Mish’s Global Economic Trend Analysis.

The bottom line is that once again, Real Estate in Ocean City MD can be a good investment, if the purchase price is right, and the buyer is purchasing the property for personal use as a 2nd home “at the beach”. As a rental investment, they also may be valued, but be prepared to treat such a purchase as a long term investment to realize it’s true economic benefit. The speculators have left the scene and reality returns to the real estate marketplace.

 On and off the beach single family primary home sales seem to be staying more in line with the national statistics and suffering a much milder decline in the area of a 10 percent decrease in sales, with a not so significant increase in homes for sale to compete for fewer buyers in the marketplace.

 I’ll chirp in again in a month or so with more insight as to the real estate market trends, observations and developments in Ocean City Maryland.

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