Investors are still taking advantage of investment properties in the region, but they're waiting a little longer for the payoff.
With housing prices still low, local real estate agents say, more investors are holding onto their properties longer, hoping to make their profit down the line.
But even if the market is still weak for sellers, buyers can still find a good value due to high inventory, continued low prices and good interest rates. So many sellers are looking to rent their properties to bide their time until they can make a profit when the market rebounds.
Allan Dechert, co-owner of Ferguson Dechert Real Estate in Avalon, said he is marketing properties to investors as more of a longer term investment than an immediate flip.
"I tell them to get it now, then wait a few years and you'll get your money back," he said. "There are a lot of people interested in properties. They just may not sell it now."
Investors are actually the most interested clients in today's market, Dechert said.
According to a recent survey by the National Association of Realtors, 78 percent of people looking for a secondary home believe it's a good time to buy compared to 70 percent of primary homebuyers.
"More people are buying their second homes," he said.
Joe Wilhelm, a real estate agent with Ocean City Realty, recently sold a four-bedroom home on the bay for $1 million that was on the market for eight days. The house was 33 years old and the new buyers intend to knock it down, he said.
"Five years ago you would buy it, fix it up and flip it really quickly," he said, but now they will wait until the prices improve.
With the market improving in Ocean City - especially for homes along the ocean and bay - more people are thinking about selling or even upgrading their second home, he said.
"I foresee more people looking to sell in the next year or so," he said. "They want to ride things out and see how the market goes."
While they are waiting, Wilhelm said, many have rented properties for what can be as high as $7,500 a week in some locations.
"It's a great way to make money and pay the bills," he said.
Kathy Pileggi, a real estate agent for Prudential Fox & Roach Realtors in Margate, said she has received calls from new clients interested in becoming landlords on Absecon Island.
There are still challenges despite the good market, she warned.
Finding properties in bad condition or under foreclosure, the traditional properties that get flipped, is not always easy, she said.
Interest rates for investment properties are higher than for a primary home, but still low enough that an investor can rent out a home and keep it as an investment property while they rent it out to pay off the mortgage, insurance and taxes, she said.
"People are definitely getting into it. One of the first questions I get from people coming down is, 'What is the rent potential?'" she said.
Contact Joel Landau:
609-272-7215
Follow Joel Landau on Twitter @landaupressofac
