Category: Seashore Real Estate

Another valuable report in the Sunday edition of The Press of Atlantic City regarding flood insurance. Click HERE for link to article.

A few key points:

1) Flood insurance rates were set to increase prior to Sandy due to the Biggert-Waters Act passed last summer.  In order to sustain the National Flood Insurance Program, the Federal government will phase out rate subsidies currently in place.

2) Under the Biggert-Waters Act, rates for primary home owners will remain subsidized until the house is sold or ownership is transferred.

3) Second home owners and businesses built prior to standardized flood maps (typically before 1982, and if structure is lower than current elevation code) will see rate increases as high as 25% each year until the full cost is reached. There is an effort by New Jersey representatives to reduce this rate to 12.5% (and therefore phase out the subsides over a longer period of time).

4) FEMA estimates that 81% of flood policy owners already pay full cost. However, we are hearing from insurance agents that a 10% increase is likely across the board for all policy holders.

My perspective as a real estate agent:

1) The high land values at the shore have fueled a “tear down” environment for many years.

2) Construction codes in Avalon and Stone Harbor require a property to be brought up to code (including elevation) if the renovations exceed 50% of the value of the structure.  This figure is based on the assessed value of the building…not the land.  Therefore a homeowner has to decide if the cost to elevate could be better spent toward a brand new structure.

3) I don’t expect higher flood insurance costs for the older structures to hurt values- because we already focus on the land value.  However, the insurance cost may force the buyer to make a decision sooner rather than later regarding elevating or building new.

And when that happens, you will want to be on the island 🙂

How about 5189 Ocean Drive?  Amazing custom home with 6 bedrooms, 5 full baths, and 2 powder rooms.  PLUS, a private pool in the back yard.  Available for weeks in August.

For more details:  Link to Rental info

Or, 215 49th Street?  Another newer family home with 5 bedrooms, 5 baths, and a private pool. Prime July/August weeks still available.

For more details: Link to Rental info

Search available rentals, and give me a call.  I am here all weekend to help with your Avalon, Stone Harbor vacation plans.  Power Play Realty web site

Hearing from contractors working for local homeowners in preparation of the summer season.

Two issues related to Sandy are causing great concern: electrical and air conditioning.

If there is a possibility that any salt water was in your crawl space during the storm (even if it quickly drained), please take the time to inspect the area.

I looked in a crawl space hatch for a house in Avalon last week-  the duct work was on the ground, and the insulation hanging down.  Now, with just a few weeks left before the first tenant arrives, an HVAC company has to remove all of the insulation, duct work and trunk lines, and replace with new.  An expensive and time consuming job; and the central air will not function until the work is complete.

Electricians are making repairs to junction boxes in crawl spaces, too.  Property owners may find their breakers tripping or appliances not working.  The cause: corroded wires in the crawl space (even with enclosed junction boxes) from salt water.  This is a serious safety issue and warrants an inspection by a licensed electrician.

Tenants expect their rental property to be fully functional and safe for their vacation.  If you need a recommendation for a local contractor, please let me know.

The reports regarding lack of inventory may sound like real estate spin, yet it’s definitely true for segments of our market.

The lower priced condos are selling ($300,000 to $500,000), and there is a strong demand for single family homes priced under $1,000,000.  The side by side townhouse style condos are still popular ($700,000 to $800,000 range depending on age/condition).

If you own an Avalon or Stone Harbor property and are considering selling (to move up??), this really is a good time.  Contact me to discuss in more detail.

Thank you for the opportunity to help!

Thank you to Michael McMahon of the McMahon Agency for meeting with the agents in my office to discuss the changes regarding insurance for seashore real estate.   His agency is based in Ocean City 609-399-0060.

In addition to the information I posted yesterday, Michael shared his expectations:

• The preliminary (advisory) maps are still under review; likely to be submitted to municipalities for final approval in October (after public meetings, too).  Until that time, the existing zones/elevation requirements are referenced to write flood policies.
• Flood insurance premiums are going up- on average 10% per year.
• If you own a home built prior to 1975, it’s worthwhile to obtain an elevation report to determine the structure’s actual rating.  Before the new rules,  older structures benefited from subsidies.  These subsidies will be phased out.
• For homeowner’s insurance, there are a limited number of companies willing to write policies on the barrier islands.  We are likely to see increases in the wind and/or hurricane deductibles for policies.

FEMA and the insurance industry are still working through the new regulations.  As a real estate agent (and property owner), I know it’s important to remain current regarding the regulations.  I am happy to answer your questions to the best of my ability…or direct you to the proper individual.

ann@anndelaney.com    609-967-7950 office