On Cedar Drive in Ocean View behind Lord Baltimore Elementary School, there is a two-story home for sale with central water and sewer. The flyer for the home’s listing reads “Limited Offer Buy this Home, Get a Buick LaCrosse at Settlement.”
But even with the car as an incentive to buy, said Bob Methvin the Patterson Schwartz Realtor listing the home, he has not gotten any calls from people he considers serious buyers.
Even a Hummer offered as an incentive late last year didn’t attract buyers to the home, which stands as a symbol of a coastal real estate market that has slowed dramatically since late last year and almost came to a halt after years of some very good times. Methvin said, “People were slowing down to look at the Hummer but I did not have a perceptible change on the calls on the house.”
“In our case, it’s a pretty basic idea,” Methvin said of listing the car with the home. “By having that out there, we’re screaming to everyone that the seller is really motivated. We do whatever it takes.”
For the past few years, in a market that flourished on what now seem to be investment buyers, Methvin said he hadn’t had to employ such tactics.
“People would give us cars,” he said, laughing.
Ocean View, like all other towns in the area, receives a transfer tax, a percentage of the sale or resale of a home within town limits, and thus tracks such sales carefully. In Feb. 2005, Ocean View received $203,162 from the tax, as opposed to only $14,158 this year, as market sales continued to dwindle after a staggeringly slow December and January. The trend continued through May when the town only brought in $62,886. In May of 2005, Ocean View received $238,050 from the sale and resale of homes in the town.
“Since January (the transfer tax revenues) has been decreasing compared to last year,” said Kathy Roth, Ocean View’s town manager. “We make predictions on numbers but we knew the market would slow up. There was some feeling that the market may be saturated.”
Marc Grimes, a Realtor for more than three decades who has been working in the local area for six years, said that there are about 120 active home listings within Ocean View town limits and only 22 have reached settlement this year. At the same time last year, 115 had reached settlement, in what was obviously a different market.
“In the past, every two to three years, there’s been a pause in the market,” Grimes said. “This time it was like a six, seven year run, which is good. The interest rates are still attractive. The demographics are strong.” But Grimes added, “Most of the homes I deal with are vacation homes.”
Methvin agreed, saying that the investor market has slowed because there is no longer a threat of rising prices. Kathy Cramer, a Realtor with Coldwell Banker, said that in the past few years, prices have been rising in the double-digits. Because of the staggering market, prices might even drop soon, although not significantly, Methvin said.
“Until now, people would buy because they knew even if they weren’t in love with what they were buying they were going to make money,” the first-year Sussex County Realtor said. “They weren’t as particular. Now that prices have stabilized and there is some buzz they maybe will go down, the interest from the buyers is just not there,” he added. “Because the pressure isn’t there, they’re being very particular.”
Though some Realtors have reported a renewed upswing in sales in recent months, because of the market, other real estate agents are taking extra steps to sell a home in today’s environment.
Grimes said that he’s seen upscale homes offering $100,000 in savings if a buyer drops a down-payment on a certain day. Cramer said she isn’t offering much of an incentive on resale homes because “the market is cyclical” and may soon rebound. But many new-construction developments offer incentives with up to $25,000 to $30,000 discounts on the sale of new homes. Seacoast Realty in Ocean View recently advertised such a deal in local newspapers, offering “No Closing Costs for Quick Delivery Homes Up to $25,000 Value.”
Eileen Gallant, in the sales department at Toll Brothers’ Bayside at Bethany Lakes development, said that while only seven of the original 204 homes in the development are still on the market, incentives are still being offered. Buyers on weekends might receive a porch, free hardwood floors or other amenities usually offered at a higher price within the home, offered as motivation to buy that day.
Methvin said that, although it is not usual business practice, he has in slower markets in the past offered incentives that have attracted buyers to a home. In the case of the two-story new construction only two miles from the beach on Cedar Drive, though, nothing has worked thus far. The home, which has been on the market for about a year, now offers the Buick LaCross as an additional enticement for potential buyers.
“You want to solicit response,” Methvin said of offering such a deal. “I just thought this one needed something to grab people’s attention.”