By DONALD WITTKOWSKI
Ocean City’s housing market slipped in 2023 for the construction of new homes, but appears to be off to a strong start for the new year.
Newly released figures show that 114 new residential units were built in 2023, compared to 195 in 2022. The number of new residential units added in 2023 was the lowest figure in the last five years, according to data compiled by the Ocean City Construction Office.
Neil Byrne, the city’s construction official, stressed that there is no need for alarm. He attributed the decline in construction permits in 2023 to the normal “ebb and flow” of the housing market rather than any long-term downward trend.
“Home values continue to appreciate and people still want to be here. From what I’ve seen, investors and residents still want to be here,” Byrne said in an interview Monday.
“The administration led by Mayor Jay Gillian and City Council continue to make Ocean City an attractive place to live. Residents and investors still want to invest and live in America’s Greatest Family Resort,” he added while referring to the city’s tourism slogan.
Byrne also emphasized that the city’s beachfront location makes it an inviting place for new home construction.
“There are only so many beachfront towns, and Ocean City is very lucky to be one of them,” he said.
Pointing to the number of permits already issued for 2024, Byrne noted that the new year is off to a strong start for home construction. He said he signed five construction permits on Monday alone.
“They’re continuing to build. It’s still early in the year, but I don’t see any reason why the historical numbers won’t be the continuing trend. We’re having a strong January to make up for the fourth quarter of last year,” he said.
Byrne said the lingering effects of the pandemic and supply chain disruptions may have been to blame for the decline in construction permits in 2023.
Renovation projects at existing homes may be another reason why the construction of new homes was down last year, he speculated.
Byrne said some homeowners are choosing to update their older homes instead of going through the more expensive process of knocking them down and building new houses.
“I’m seeing a lot of renovations – from new railings to multi-hundred-thousand-dollar projects. They could be lifting their homes, making an addition or increasing the flooring,” he said.
“They’re spending their money differently now. They like the house they have, but they’re doing a new kitchen, adding a bedroom or redoing the outside by adding a new deck,” he continued.
The rising popularity of renovation projects may be the reason why the number of demolition permits for homes was down in 2023, Byrne said.
Figures show that 86 demolition permits were issued in 2023, compared to 131 in 2023. The 86 permits represented the lowest number in the last five years for demolitions.
Homes weren’t the only structures that were torn down last year. Chapel By The Sea, a nondenominational church located at 55th Street and Asbury Avenue, was demolished in December after it was sold to a development group that plans to build a mix of residential and commercial construction on the site.
The church’s congregation relocated to Marmora in 2023 after the property was sold for an undisclosed price.
Meanwhile, a new report released Tuesday by Goldcoast Sotheby’s International Realty shows that the Ocean City real estate market has been hurt overall by tight inventory and higher mortgage rates.
“There is no great surprise for those who follow the Ocean City, NJ real estate market that we continue to see a downward trend of the number of properties sold and total sold volume in 2023 fourth quarter and year end results,” the reports said.
The report stated that 145 properties were sold in the fourth quarter of 2023, representing an 8.8 percent decline compared to the 159 properties sold in the fourth quarter of 2022. For the entire year, 2023 ended with 677 properties sold, a 14.8 percent decrease from the 795 properties sold in 2022.
Despite a decline in the number of homes that were sold in 2023, prices have been on the rise. The average sales price in 2023 was about $1.2 million, an 11.2 percent increase over the average price of about $1.1 million in 2022, according to the Goldcoast Sotheby’s report.
A copy of the Goldcoast Sotheby’s International Realty report is available at Ocean City Market Update 4th Quarter and 2023 in Review by GSIR_OCNJ – Issuu