The housing market shared in the summer economic slump, brought on by the downgrade of the U.S. credit rating, impotent congressional squabbling over deficit reduction and Europe’s self-inflicted debt crisis.

This single-family house on Simpson Avenue in Ocean City was among the homes in the region that sold during the third quarter for the median price, $220,000.

Home prices fell again, but by less in the southern New Jersey shore market, the latest data from the National Association of Realtors show.

Home sales, though, increased everywhere from a year ago — up 13 percent in New Jersey — helped by record low mortgage interest rates.

In the Atlantic, Cape May and Cumberland counties region, the median home price in the third quarter was down 3.8 percent from a year ago to $220,600.

That was better than the 4.7 percent decline nationwide and 6.5 percent drop in the Northeast.

Anthony D’Alicandro, president of the Atlantic City & Atlantic County Board of Realtors and broker/owner of Coldwell Banker Casa Bella Realtors in Linwood, said the price drop is a function of supply and demand, with too much inventory and too many distressed properties on the market.

Another factor is low consumer confidence, which is lower than it was in 2008, he said.

But overall, D’Alicandro said he feels good about the housing market and “the little bit of growth we’re seeing.”

A healthy market grows slowly, as it did in the early 1990s, he said, not like the housing bubble in the following decade that ended in the current oversupply.

“We will see an initial decline in prices, and then nine to 12 months from now, we’ll start to see true stabilization and a little bit of growth by the end of 2012,” D’Alicandro said.

Mortgage rates that remain about 4 percent will continue to motivate buyers as long as they last, and the shore region will remain an appealing market to home buyers, especially those looking forward to retirement, he said.

“We have an attractive place to live, near the shore, with lots of things to do, near the big cities of Philadelphia and New York, with a nice climate, and we’ve seen a tremendous increase in the quality of health care, which is important,” D’Alicandro said.

Jarrod Grasso, the chief executive officer of the New Jersey Association of Realtors, expressed a similar sentiment about the statewide market in explaining the strength of New Jersey home sales.

“The resiliency of Garden State infrastructure and industry, plus our location between the New York City and Philadelphia markets, places us in a strong position for employment and stability,” Grasso said in a statement.

Thanks to low mortgage rates and fallen housing prices, home affordability continues at record-high levels.

NAR’s Housing Affordability Index was 183.8 in the third quarter, the highest ever except for the record level in the first quarter this year. The index gauges how readily those with a median income could afford a mortgage for a median-priced home. The median is where half are higher and half lower.

A third of home purchases in the third quarter were for cash, and two-thirds of those cash buyers were investors, the Realtors said.

D’Alicandro said that with rents for homes soaring, housing makes sense as an investment again. “We’re seeing rates of return in the 9 percent to 11 percent range.

Distressed properties — either short sales or foreclosures — made up 30 percent of home sales in the quarter, down from 33 percent in the second quarter, the Realtor survey said. Those houses typically sold at a discount of about 20 percent.

D’Alicandro said that while there is a large backlog of distressed properties from the legal system’s slowdown of foreclosure processing, he doesn’t expect those to undercut demand much for normal homes.

“If you think about a 28-year-old who is exceptionally good at writing HTML code, I don’t know that he wants to buy the house that’s been sitting vacant for three years,” he said.

The 3.8 percent decline in the regional home price follows a 5.8 percent increase in area home prices in the second quarter.

The current median price in Atlantic, Cape May and Cumberland counties is about the same as it was in 2009, and 13 percent lower than it was in 2008.

Liz Davidson, Contributor  Forbes.com

As a financial education company, we often see financial crises coming because employees contact us when they have financial problems or concerns they need help resolving. With the recent mortgage crisis, we began to see a major spike in calls on debt in the year leading up to the meltdown. Debt calls in 2006 increased to an all time high—representing close to half of our total calls at the time. Even worse, many callers were frantic. They weren’t looking to simply reduce their debt load; they were struggling to make ends meet. They weren’t asking about putting together a plan to pay off high interest rate debts; they were beginning to consider drastic options like foreclosure and bankruptcy.

It was rather like seeing a car crash in slow motion. You know it’s coming and you can tell the driver to slam on the brakes or swerve out of the way, but it’s too late to do much more.

Move up, Move down.

Today, there’s another mortgage crisis in the works—that is, NOT having one—choosing to rent when you can afford to buy; choosing to forgo building equity in a home as a major source of retirement security—something that may be more necessary now than ever before with a soft stock market and low interest rates. This emerging crisis is not yet at the car crash stage– more at the reckless driving without a seat belt stage. There is time for Americans to resolve this one, but they must change their perspective on home ownership before it’s too late.

Why own a home when you can rent? We are hearing this question much more these days as people choose to “sit out” of the real estate market or disregard homeownership altogether after seeing many of their friends and family end up in short sales or foreclosures. Renting is the low-risk option for these callers. It’s the only way to ensure that nightmare will never happen to them.

The problem is that it will; it’s just a different nightmare. Consider this: A homeowner with a $1,500 monthly payment would still be writing the same check fifteen years later while prices everywhere increase around them. In August 2011 the Consumer Price Index included a .4% increase in rents, the biggest increase since 2008, which represents an annualized increase of 4.8%. If rents didn’t even increase that much but simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years. The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation) and of course would end with a final payment. There might even be some real equity in the property, even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement.

The renter, by contrast has no equity in their home, so in addition to almost $900,000 in rent in the above example, the renter would also be giving up $400,000 in retirement assets (and that’s at a growth rate of just 1%– far lower than even the lowest growth rate over a 30 year time period). At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference, not to mention the impact of NOT having to pay a mortgage. How much less would you have to save for retirement if you didn’t pay the mortgage?

And this doesn’t even include the tax benefits. The US government essentially subsidizes your house payment by allowing a mortgage interest and property tax deduction on Schedule A of the 1040. Any points you pay when you get the loan can also be deducted. Then an amazing thing happens: the IRS allows a tax exclusion on the sale of a primary residence. Owners who live in their property two out of the past five years, who have equity and sell their primary residence, receive a maximum capital gain exclusion of $250,000 (if married $500,000.) Where else can you get a tax break on an investment and then receive the proceeds tax free? I can’t think of another investment like it.

So, deciding that “renting” is safer and there’s no need to take the risk of buying a home or even waiting in an effort to time what is an unpredictable real estate market, buying only when prices have been up for a while, can be very costly. It doesn’t bring with it the emotional trauma of a foreclosure or short sale. But it is a slow drain on your finances, that over time, could compromise your ability to retire or at the very least, to retire the way you want, when you want.

All that said, I’m by no means advocating homeownership for everyone. For many, renting is the right option, at least for now. If you can’t afford to own a home, you shouldn’t even consider buying—one of the key lessons learned from the mortgage crisis. Your mortgage should be under 25-30% of your income not including bonuses or promotions and you should have an emergency fund of 3-6 months expenses in savings before you purchase a home. Also, if you don’t qualify for a reasonable interest rate on a mortgage due to credit problems, if your income is unstable, or if you crave mobility, renting is the better choice. Renting is cheaper than buying in the short term and has other advantages. Repairs: as a renter, when you turn on the shower and freezing cold water spurts out in your face, you simply make a phone call to the landlord and they have to install a new water heater instead of you footing the bill. Mobility: If you have a job opportunity or promotion in another state, you simply give notice and move. You don’t have to go through the arduous process of selling (or not being able to sell) your home. You are free from the obligations of homeownership. Property taxes: As a homeowner, even when your mortgage is paid off you still have to pay property taxes and insurance, and those costs will continue to rise.

Just remember that freedom has its price and, in this case, it is a steep one. It costs much more in the long run to rent, which is why homeownership can be the ultimate retirement strategy. When people are making decisions on whether to buy a house or not, many aren’t factoring in thirty years from now when the home is paid off. They are wondering if the market is at the lowest point possible, if interest rates will drop even lower or if the property will appreciate. This vital element of homeownership has a long incubation period. We always hear that an employee’s peak earning years come after age 50, when you combine high earnings with the elimination of an expense that takes up a third of most people’s take home pay, people have a real chance to meet their financial goals. Homeownership is the ultimate retirement plan.

Home ownership isn’t for everyone, but for many, it is the best choice. The smartest choice, of course, is making the right decision for the right reasons based on your own circumstances. Homeownership basics apply just the same as they always have: buy only the home you can afford, lock in a fixed rate loan with the lowest interest rate possible, and refinance only to get a lower rate and only for the same loan amount and same term. What got many people in trouble during the financial crisis was going to the extreme and buying a house they could barely afford with a variable rate loan payment. When the payments reset with higher interest rates, many couldn’t make the payment. They never should have been in the house in the first place.

If Americans don’t recover soon from their pessimism around homeownership, we predict another fallout from the financial crisis will surface many years from now when a nation of renters tries to retire. They won’t have equity in their homes. Their paychecks will be stretched to the limit, not leaving room for saving and investing for retirement and other financial goals such as college funding. Instead of their expenses reducing through retirement, they will look straight down the barrel of increased rent payments for the rest of their lives. Homeownership makes a significant difference in the long run so it is concerning to see so many walking away from the American Dream. We don’t want to see it become the American Nightmare.

Right now, is the most effective time in history to purchase a house in America.

These days, I’ll show you why… based on a few cold, challenging facts.

First, mortgage rates are lower than they’ve ever been in American history…

Most investors have only seen a couple decades of mortgages rates on a chart. But my buddies at Global Financial Data have databases – which includes real estate data – that literally go back centuries.

I had dinner with the Global Financial Data team over the weekend. And they told me about their “Winans International” real estate indexes, with housing costs back to the 1800s and mortgage rates going back over a century. I had to share it with you…

Take a look at this chart of mortgage interest rates since 1900:

In U.S. history, you can see that the current mortgage rates are the lowest.
The last time that the mortgage rates were so low was just after World War II.
And what happened, just after World War II, when mortgage rates were this low?
The greatest postwar boom in housing prices – by far.

Take a look. Mortgage rates bottomed in the mid-1950s, and house prices bottomed about the same time. Then the greatest boom in home prices in our lifetimes started.

Today we have record-low mortgage rates. And we have another thing in our favor…

Homes are more affordable than ever.

Based on the 40-year history of the Housing Affordability Index… houses are more affordable than they’ve ever been. Take a look…

“Affordability” takes three factors into account: home prices, your income, and mortgage rates.

Home prices have crashed. And mortgage rates are at record lows. But incomes (nationwide) haven’t fallen nearly as much… So homes are now more affordable than ever.

“Most people” out there will only tell you the bad news about housing… That’s the way it goes in a bear market. People drive looking in the rearview mirror.

Meanwhile, we have some darn compelling facts out there…

Home prices have fallen by a third… and mortgage rates are the lowest in history. Therefore, U.S. homes are more affordable than they’ve ever been.

You can listen to “most people.” Or you can choose to ignore them and stick to these facts.

Based on these facts alone, now may be one of the best times in American history – even the very best time – to buy a house.

Timing is everything ! Everything is timing !

Reuters is out with a new report on the state of real estate in Dubai. According to the report, prices in Dubai are expected to continue to decline. Here on the Jersey Shore in Cape May County, we are expecting prices to steady. Unlike many international markets we continue to have an influx of yearly vacationers to Sea Isle City and the Jersey Shore.

Buyers have been enjoying the benefits of the lower than normal interest rates are quietly buying up most of the low hanging real estate before next spring when the sellers seem to have some footing on the prices and have the benefit of the summer rental income wind at their backs.

My peers and I used to joke about having clients cruise down during snow storms with borrowed SUV’s to get a brand new property listing under contract before the weekend when herds of potential home owners would weigh down the Islands with cash filled pockets and deposit checks already written and signed before even seeing the house.

To put this in prospective this is the fall and winter season that buyers will be rambling down for the last of the distressed inventory. More of the available properties are priced to market than anytime in the past seven years.

Contact Ian or any well trained agents of The Lazarus Team, The Landis Co., Realtors, for market data that an engineer would cry for. We can explain the information so that your four old grandchild can grasp as long as he didnt just get off the boat from . . . . .

Get the point? We do easy, easy ! As my son Rami says “Relax and let use do the heavy lifting.” The apple doesn’t fall far from the tree I see.

For all of the reader who have been lulled to sleep over the past seven years and congratulating themselves in not getting caught purchasing a shore home at the top of the market for what ever reason. Don’t get to cocky because even the smart and very smart money are moving in.

Let us know what part of the buying process we can help. We are saving our clients thousands of dollars today!

For those who are interested we do have a Jersey Shore Foreclosure & Short Sale Email List Available.

From the beautiful beaches of the Jersey Shore to Florida , I serve discerning home buyers and sellers.

Sea Isle City, NJ – Outer Banks, NC – Corolla, NC – Greenville, NC – Fort Lauderdale, FL

By KEVIN POST Business Editor Press of Atlantic City

Joel Naroff, of Margate and Holland, Pa., is president of Naroff Economic Advisors and this year’s most accurate U.S. forecaster, as determined by the National Association for Business Economics.

His clients include the Susquehanna and Metro banks, grocery giant Ahold USA, Cumberland Advisors, eMoney Advisors and Prudential Fox & Roach. Naroff discusses the economic recovery, government interventions, lasting effects of the downturn, and the future of the regional economy.

Joel Naroff, economist and president of Naroff Economic Advisors, discusses the economy, Tuesday Oct. 18, in Pleasantville.

Q: Is the popular perception of the economy accurate? Should we be worried more or less about the strength of the recovery?

A: For about a year and a half I’ve been asking people if they think the recession is over, and if I get 5 percent of the group saying yes, that’s a lot.

Yet the recession ended in June 2009. That perception is being driven by job numbers.

We seemed to be coming out of it in the first part of the year. There were several months where we had job growth in the 200,000 range. That was signaling that the economy was on the verge of changing gears.

Unfortunately, before the job growth could get strong enough and be self-sustaining, we had $4 a gallon gasoline. And that really cut the legs out of what was always going to be a tenuous recovery.

You could never get a really strong recovery with housing not going to rebound the way it did in the past. Housing used to lead the recovery, but we built almost twice as many homes as we needed in the last decade, so housing’s going to be weak.

But if you look at the details of the economy, the manufacturing sector is really good, the service sector has been expanding, exports are really doing very well. The details are better than the headline popular number, which is jobs, and I think that’s why people are depressed, and with very good reason.

If you can’t find a job or are worried about losing your job, that’s job insecurity, and that’s what a lot of people have right now.

Q: What are the strengths and weaknesses of the Jersey Shore’s economy?

A: Clearly the attractive forces in terms of the shore communities and the summertime are not going to go away and are only going to grow. But I think the key factor over the next 10 to 20 years is the slow but steady retirement, or whatever they call it, of the baby boomers.

Baby boomers are not retiring all at once, but that process has begun and over the next 10 to 20 years it will ramp up. Baby boomers are looking for different things than their parents’ generation looked for. They’re looking for what I call high-density amenity locations. Places where they can get to and do lots of different things easily.

That changes where they’re going to locate. Center cities become not really great places. Areas around colleges become really nice places. The shore becomes a wonderful area. If you think of Atlantic City in terms of all the cultural amenities that is has to offer — the music, the shows — it’s a really desirable place not just for the summertime, but for the baby boomers it becomes a desirable place to retire to.

I think we’re beginning to see that. A lot of the rentals over time will be replaced by retired baby boomers living there full time. That will change the face of shore communities because the services that go along with more and more full-time and reasonably well-off residents will have to be developed.

Atlantic City is obviously the linchpin, but Atlantic City is also the risk in that, for the longest period, it had relatively little competition. Now that’s not the case. There are casinos everywhere, and Atlantic City needs to define itself in a different way.

Outside of Atlantic City, clearly what’s happening in the airport and (William J. Hughes) Tech Center area is potentially a huge plus over the next 10 to 20 years because that’s so much of where the world economy is going.

Q: Will the region’s housing market benefit going forward from its substantial second-home and retirement-home segments?

A: If my thinking about the Jersey Shore being a retirement community and not just a tourism attraction is correct, that’s very good for the stability and growth of the housing market.

That demand will continue and grow to a major force as more baby boomers retire. To the extent it requires a more diverse and stable base to support the residents, that’s going to bring more workers, more incomes, and more demand for housing throughout the area, including offshore.

Again this is going to take a long time, 10 to 20 years, but it does have a really good implication for housing market outlook.

Q: What is the potential for Atlantic City to set itself apart from the convenience gambling competitors around it?

A: Atlantic City faces a major challenge right now to identify itself in a different manner.

It can’t be the same Atlantic City that it was 20 or 30 years ago, and it isn’t. It has been trying to wean itself off of the day-trip model and become more of a destination. That’s critical.

The challenge is figuring out precisely what that image is. It’s got to be something else that really sets it apart.

It’s got a large enough mass now, with the Revel hotel coming in, that even if it loses some of its casinos, it’s a different place than anything that exists on the East Coast. It has to make that clear and sell that. I’m not a marketing expert, but I think there’s an understanding that it’s a tourism place, it’s got the summers, but getting people down here in the fall and spring is really important as well.

Q: Is there anything that government can do to reduce unemployment and strengthen the weak recovery?

A: With this really, really disappointing recovery, I think everybody’s turned toward the magic bullet. Can’t the government do something? We’ve spent all this money, bailed out the banks, had stimulus plan after stimulus plan. Why isn’t the recovery stronger?

With fiscal policy being restrictive and state and local governments cutting back on their budgets and their work forces, and with housing and finance not adding in the way they used to, it’s very difficult to get things going.

That said, could the government be doing more? Well, the problem with fiscal policy is that it takes a long time. Even the so-called shovel-ready projects we started are still being worked on. We have construction just beginning or not yet finished and it’s nearly three years ago we started that.

The government can’t simply say, gee, we’ll cut taxes. Businesses have $2 trillion in cash on hand. That’s not what’s stopping them from hiring more people and investing more. It’s uncertainty about the economy.

Q: Are there things government shouldn’t do during this period of prolonged economic weakness?

A: There’s a lot of debate about that. You don’t want the government to put up hurdles to business. At the same time we’re in a special situation.

We had been letting the financial sector handle things on their own, and while there were plenty of regulations to deal with the excesses that occurred, the regulators didn’t enforce those regulations nearly to the extremes that they might have to prevent things from happening.

I’m not saying the regulators were at fault, but now the question we’re having is what’s the right amount of regulation and what’s too much or too little regulation. We’ve gone through a period of too little regulation and we may be going through a period of too much regulation, but we know there are costs involved with that. We need to make sure there’s not too much regulation.

We need to make sure there’s confidence coming out of Washington, coming out of the statehouses across the country, coming out of local governments, that people are dealing with the issues rather than fighting.

In a period where psychology matters, the chaos that’s going on in Washington is not particularly helpful.

So what government can’t do is send the wrong messages and create major hurdles that will prevent households and businesses from doing the things they need to do.

Q: What is the soonest and the latest the economy might return to what we’d consider normal?

A: This is one of those questions that if I knew the answer I’d write it down. I’d like to say it’s probably going to be at 2:30 in the afternoon of March 14, 2012. The reality is that we really haven’t had to go through a recovery where we were dealing with two of the most critical components of the economy, housing and finance, that were so badly damaged that it was taking a long time for them to recover and get things going.

These are conditions we really hadn’t seen in previous recoveries in the post-World War II era, really in the last 60 to 70 years. That makes it a very odd situation.

The economy is going through what I call a slow but steady grinding recovery. It’s going to take a while. By the time we get to next spring or summer, we will clearly see that things are back. Are they going to be normal? Maybe not fully normal but getting there. If you think back to last spring, when job growth was coming around, we hadn’t flipped a switch, we hadn’t shifted gears, we were getting to that point such that, if gasoline prices hadn’t shut the recovery down, by now we’d be in pretty good shape.

We’ve essentially pushed that recovery back a year, so by the spring we’ll probably be in the process of shifting gears and by summer we’ll see things getting appreciably better.

Q: Will the severe downturn have lasting effects and, if so, what might the new normal look like?

A: Whether it has as deep an impact as the Depression did on that generation that lived through that, which became extraordinarily cautious for a long time, is unclear.

But the longer this goes with this kind of slow growth, this kind of uncertainty, with this kind of job insecurity, the more that perceptions and attitudes are going to change.

It’s going to be a long time before we have another go-go housing market. People are going to look at jobs in different ways. Job security had been defined by a lot of people as simply the ability to get another job. If I don’t like this one, I’ll just go find another one. Well, they’re going to be looking at trying to keep their jobs.

In addition, a lot of people are being scarred by changes in income and spending, and so their spending habits are going to change. Shop ’til you drop will return, but it’s going to take a long time. Maybe it will be shop ’til you’re tired.

Then there’s the idea of what’s a normal economic expansion. We think of the last 20 years as having really strong growth, but what drove the ’90s? It was a tech bubble. That created a huge amount of wealth and that wealth drove strong growth.

Similarly, what happened in the last decade? A lot of people saw their housing prices go up, they spent as if their $250,000 home was really worth $2.5 million, and that extra wealth on paper drove the strong growth.

Unless we have another bubble that creates huge wealth, we’re not going to have that strong growth.

So the new normal, which is an old normal, a non-bubble-driven normal, is significantly slower growth than we had in the bubble periods.

Q: How will the jobs of the future be different, and how should workers prepare themselves for them?

A: The job of the future is just a continuation of the changes that we’ve seen the last 20 years. The days of being able to get a basic high school education, go into a factory and make a decent living are pretty much behind us. Factory jobs are much more skilled right now, and you hear stories every day about manufacturers who even in current circumstances are having trouble finding the right people with the right skills.

That’s in part a result of our perception that manufacturing is disappearing so we don’t have to train for it. It’s not necessarily that the education system went wrong, just that we told everybody they should be in software, rather than getting the kinds of technical skills that every firm requires right now.

It shouldn’t be that we have so many manufacturers looking for skilled workers and they aren’t out there at a time when we have unemployment above 9 percent in the state and nation. That’s a lack of understanding where the skills were going and setting up the training to match that.

Q: What are your business clients most concerned about this year?

A: In the beginning of this year, the question I was asked the most was: When are we going to get out of this and how strong will the recovery be?

Then as we moved through the summer and the chaos of Washington with the debt ceiling, budget cuts and the downgrade, the question became: Are we going to go into a double dip?

Businesses are uncertain and they’re not hiring because of that. They want to have some confidence that if they make an investment and hire some people, the economy’s not going to fall apart three months from now. And while no one can give them certainties, my forecast is that’s not likely to happen, at least not unless there’s another shock to the economy.

By ROB SPAHR Press of Atlantic City Staff Writer

Merchants and crafters line the park Saturday during Sea Isle City's Octoberfest at Excursion Park and JFK Boulevard.

SEA ISLE CITY — When Charles Landis founded Sea Isle City in the early 1880’s, his goal was to create a city on canals, similar to Venice, Italy. Those plans never materialized, but 130 years later, hundreds of people gathered at Excursion Park to celebrate a different kind of European culture — a German-themed ‘Octoberfest.’

Oktoberfest is a two-week long beer festival held in Germany every year. But Sea Isle City’s Octoberfest is geared more toward families.

The music of the Philadelphia German Brass Band — whose members were decked out in traditional German attire — filled the air as children bounced to the beat inside inflatable castles or had their faces painted. A brightly-decorated man on stilts interacted with smiling families while another man created a herd of balloon animals.

Click here to see more photos.

“It is definitely a nice family day all around,” said city resident Bill Gallagher, 67, after taking a hayride on the beach with his children and grandchildren. “And it’s always great to be able to come out to support the city and the businesses here.”

This was the fourth year for the festival, and organizers said the event was by far the biggest.

“We never had vendors before. They were trying to make this different than other festivals we have in the city, but people were coming here and looking to spend money and had nothing to spend it on,” said Barbara Steele, the events planner for the Sea Isle City Chamber of Commerce and Revitalization, which hosted the event with the city. “But we brought in about a dozen local vendors, all of whom are members of the chamber, and the effect that that had is definitely noticeable. And the weather is beautiful, which also helps.”

While a majority of the vendors were selling ordinary items, some made sure to include a German flavor.

Bill McGinn spent the day grilling bratwurst under the “Bubba Dogs” tent, even though the delicacy is not typically on the popular hot-dog stand’s menu.

“The (organizers) asked us to do something with a German flavor for this event and they’re actually selling pretty well,” said McGinn, adding he expected to go through more than 150 brats and 350 dogs during the four-hour event.

And a block away from the park, more vendors were set up outside LaCosta Lounge.

LaCosta bartenders were serving seasonal Oktoberfest-themed beers from taps on a vintage fire truck while a DJ was spinning tunes from underneath a tent nearby.

“I think that Oktoberfest is so big in Europe that Americans are now catching on and are trying it out,” LaCosta bartender Jason Buck said about the recent rise in the popularity of Oktoberfest-themed beers and events.

The event’s popularity could help the city accomplish one of its own goals.

“So many people enjoy Sea Isle during the shoulder season, so the businesses here are trying to extend the shoulder season as much as possible,” LaCosta bartender Ken Merson said. “So having events like this be successful at the end of October is going to be very helpful.”

Never a dull moment or a bad sunset on the island of Sea Isle City, NJ. What an unexpected pleasure stepping out on the bayfront at 80th Street. The colors were amazing and I had to share my peaceful evening with you. And Jack Johnson’s Sitting, Waiting, Wishing isn’t bad either !  Namaste, Ian

Posted: Sunday, October 9, 2011

By KEVIN POST, Business Editor Press of Atlantic City

The new home market still looks grim for homebuilders, but pretty good for potential buyers: Houses haven’t been this affordable in decades.

Even so, local homebuilders are starting to feel a bit expansive, planning new developments in the area and extending their territories again.

U.S. households, with a median income of $64,200, could afford 73 percent of the new and existing houses on the market in the second quarter.

That’s slightly down from the 75 percent affordability in the first quarter, the highest ever recorded by the National Association of Home Builders.

Locally, affordability was nearly as good.

In the Atlantic City/Hammonton area, 66 percent of houses were affordable to families earning the median $71,100 income for the area.

In Vineland/Millville/Bridgeton, 65 percent of houses were within reach of the median income of $62,400.

The exception to this record affordability was Ocean City, where the data is skewed because houses priced for second- and vacation-home buyers living elsewhere are often out of reach to local household incomes.

This made Ocean City the least affordable of the 220 metro areas surveyed by the NAHB, with only 41 percent of its houses affordable with the local median income of $70,100 a year. While that income is nearly the same as in Atlantic County, the median home price there was $203,000. In Ocean City, resort homes pushed the price to $360,000 in the NAHB survey.

Halliday-Leonard kept to its stronger hometown market of Ocean City as the downturn hit, having built houses from Hammonton to Cape May for 33 years. Now, it’s reaching out again.

“The last five to eight years, we concentrated on Ocean City,” said co-owner Scott Halliday, also of Ocean City. “Now, we’re starting to look elsewhere too. I’m heading to Avalon now for a possible job.”

Tim Schaeffer Communities – which avoided most of the damage of the market collapse and finally sold off the last of its 123 homes at Pine Crest in Egg Harbor Township – also is making plans for an improving new-home market.

After recently starting construction on the 14-unit Walden Commons in Hammonton, the firm is preparing to build a model and sell six homes off Zion Road in Egg Harbor Township, said the Haddonfield firm’s president, Jason Schaeffer.

“We’re also planning to start a project in early 2012 in Vineland. That’s about 180 single-family homes in a development called Menantico Estates,” he said.

Joel Naroff, president of Naroff Economic Advisors, said the shore and New Jersey markets may do a bit better than elsewhere in the year ahead.

“Some of the shore areas have done reasonably well, and that’s pretty good. That’s an area less affected by distressed homes,” Naroff said. “To some extent, the upscale homebuilders have a greater chance.”

Statewide, although there are “a fair number” of short sales and foreclosures, “they’re more sprinkled around, so we’re likely to see more of a recovery in the New Jersey housing market,” he said.

The latest figures on new-home sales suggest that recovery hasn’t begun. The Census Bureau said sales of new single-family homes were down 2 percent in August from the prior month, but still up 6 percent from the same month a year ago.

Houses are more affordable than they’ve been in a decade.

Jersey Shore Waterfront Home

By Pat Mertz Esswein, Associate Editor

From Kiplinger’s Personal Finance magazine, October 2011

1. Prices have nearly hit bottom.

In most areas, most of the excess has finally been wrung out of the market. But if you’re buying a first home or looking to trade up, there’s no need to rush. Although prices may fall some more — blame foreclosures still working their way through the system and tighter credit — they won’t fall by much. Fiserv Case-Shiller, which tracks home prices, forecasts that the median price nationwide will ratchet down for about six more months, then stay flat for three or four years.

In most of the cities where home values experienced a double dip after the expiration of the home buyer’s tax credit in mid 2010, median prices won’t fall below their 2009 or 2010 lows, says David Stiff, Fiserv’s chief economist. These cities include San Francisco, San Jose, San Diego and Washington, D.C. But in cities with lingering oversupply of homes for sale, Fiserv forecasts a decline of 10% or more in the median home price (for the year ending March 31, 2012). These cities include Riverside–San Bernardino, Cal.; Las Vegas; and Miami.

2. Houses are affordable again.

Homes haven’t been this affordable since 1991. Economists often define affordability as the ratio of median home price to median family income. According to Fiserv Case-Shiller, the U.S. ratio now stands at 2.6 — down from a peak of 4.1 in mid 2005 and just under the long-term average of 2.8. Of course, some areas continue to defy affordability. In California’s coastal cities and the New York metro area, the ratio is 5 or more. Average mortgage payments are another way to look at affordability. Since the housing market’s peak in 2006, the average principal-and-interest payment in the U.S. has fallen from $1,063 to $645.

Renters considering the jump to homeownership may be encouraged by the price-rent ratio, or the median home price divided by the median annual rent. In 2005, the national median home price had inflated to nearly 21 times the median annual rent, according to Marcus & Millichap, a commercial real estate brokerage company in Encino, Cal. Since the bust, the ratio has deflated to 14, less than the historical average of 15. During the same period, the difference between the median monthly mortgage payment and median monthly rent fell from $745 nationally to $102. Marcus & Millichap expects rental vacancy rates to hit pre­recession levels this year, allowing landlords to raise rents by an average of 3.5%.

3. Mortgage rates won’t go any lower.

For the past couple of years, interest rates have hovered at levels last seen when the veterans came home from the Korean War. According to HSH.com, which tracks mortgage rates, at the beginning of August the national average 30-year fixed rate was 4.5%. FHA loans, which require only a 3.5% down payment, had a 4.3% rate. Adjustable-rate mortgages are even cheaper, and even rates for jumbo mortgages have hit lows not seen since the 1980s.

Freddie Mac forecasts a 30-year fixed rate of 5% by year-end and 6% by late 2012. Standard & Poor’s downgrade of the U.S. credit rating won’t have an immediate effect on rates because of the weak economy. But credit is tighter, and you’ll need a credit score of 740 or more and a down payment of at least 25% to nab the lowest rates. If you fall short of that, you’ll pay interest-rate risk premiums if the bank plans to sell your loan to Fannie Mae or Freddie Mac. For example, lenders must charge an extra 0.25 point if a borrower has a 740 credit score but puts down less than 25% (but at least 20%).

4. It’s a buyer’s market.

Demand is low; supply is high. In early summer, the National Association of Realtors reported that sales of existing homes (single-family houses and condos) fell by 9% from the year before. NAR also reported 9.5 months’ supply of homes. That’s how long it would take to sell all the homes on the market at the current pace of sales, and it strongly favors buyers. (Four to six months’ supply is considered balanced between buyer and seller.)

With so much selection, you’ll find more properties in good school districts or near your job, or homes that offer added value, such as a mother-in-law suite, says Thomas Popik, research director with the Campbell surveys of real estate professionals. You’ll spend less time shopping and competing against other bidders. And you don’t have to waste time with sellers who set unrealistic prices (although they’re still out there).

One caveat: If you’re searching among entry-level homes, which had more extreme price declines than upper-end houses did over the past year, you may face stiff competition from investors. They typically pay cash, which makes them attractive to sellers who want to close the deal fast. However, says Popik, you may find opportunities in homes that were bought and fixed up by investors, who intended to flip them but have had difficulty making a sale.

5. You may find a distressed property.

Bank-owned foreclosures (or REOs, for “real estate owned” properties) sell for an average discount of 35% off the per-square-foot price of conventional homes for sale, according to RealtyTrac. In the first half of 2011, lenders owned about 870,000 REOs but listed only about one-fifth of them for sale, concentrated in such high-foreclosure states as Arizona, California, Florida, Michigan, Nevada and Ohio; even with the slowdown in the foreclosure pipeline due to legal-processing issues and new supply exceeds sales. Find more on buying foreclosures.

Short sales, or homes sold with lenders’ permission for less than their owners owe on their mortgages, have also grown in number. Lenders have become more amenable to them as they seek to avoid the often huge losses associated with foreclosures, says Rick Sharga, of RealtyTrac. Short sales offer buyers less of a bargain than REOs, but the homes tend to be in better condition. Banks may still take two to six months to sign off on a short sale, so patience is imperative.

6. Homeownership is still attractive.

A home is the biggest purchase most people ever make. But deciding whether and what to buy isn’t purely a financial decision, says Chris Herbert, research director at Harvard’s Joint Center for Housing Studies. When you own a home, you can control your living environment and security, upgrade and change your home as you see fit, and create a sense of rootedness in your community.

You can offset some of the cost of homeownership by deducting mortgage interest. But don’t mistake a home for an investment, at least not in the short run. “If your goal is to jump in and get a return of 6% annually, that’s a bad idea,” says Fiserv’s Stiff, given the forecast for weak price appreciation. Instead, you need to commit to owning the home for at least five to seven years to ride out any further price declines and recoup your down payment and transaction costs. If you think that you might need a bigger home before that time to accommodate a growing family or that you might have to move to another area for your job, don’t buy unless you’re willing to become a long-distance landlord.

Shop carefully, and be patient. Exclusive buyer’s agent Michael Crowley of Spokane, Wash., tells buyers it may take three to four months to find the right house. “We can be in a hurry, or we can be particular, but we can’t be both,” he says.

GAY TALESE  never learned to swim and only occasionally ventures onto the beach. The wind makes it impossible for him to read the newspaper and, he said, during a recent visit to his second home in Ocean City, N.J., “I’m not going to sit on the sand swatting flies.”

Yet for the last 40 years, Mr. Talese, a writer, and his wife, Nan, a Manhattan book editor, have spent weekends and summers there, in the town where he was born, tucked into a rambling red-shingled Victorian they own that sits just one block from the ocean.

Unlike the Hamptons or Litchfield, Conn., where many of the couple’s Manhattan friends seek refuge, Ocean City has long been a getaway for middle-class Philadelphians.

SECOND-HOME TOWN Nan and Gay Talese at their 1902 house in Ocean City, N.J., where Mr. Talese was born

The Taleses like it because it’s the antithesis of the Manhattan literary whirl. So, don’t ask for a whole-wheat roll at the hoagie shop, or a chic mixed drink when you’re dining out. Ocean City has been dry since its beginnings as a Methodist retreat in 1879. Night life? Choose between the kiddie rides on the boardwalk or star-gazing on the beach.

“It’s a great contrast to New York,” said Mr. Talese, who is 75, as he conducted a tour around town, pointing out the building on Asbury Avenue where his mother owned a dress shop, his father ran a tailoring business and the family lived in an upstairs apartment.

Large parts of many of his books, including “The Kingdom and the Power”; “Thy Neighbor’s Wife”; “Unto the Sons,” a family reminiscence that’s largely set in Ocean City; and his latest, “A Writer’s Life,” were written in the third-floor office of his Ocean City Victorian.

“Nobody bothers me here,” he said. “I much prefer it in winter. It’s empty, and you can see the sky. It’s light, and cheerful.”

Built in 1902, the house sits on a tree-lined street in one of the resort town’s most desirable neighborhoods, the Gardens. As in most houses of its kind at the shore, the first floor is raised above street level to take advantage of sea breezes, with a wraparound porch, white wicker furniture and a green-and-white-striped awning. Although the original view from the front porch favored dunes stretching all the way to the Atlantic, by the time the Taleses arrived there were already houses across the street. Five years ago, those were torn down and replaced by town houses, which still did nothing to revive the old sea view.

If you squint, though, you can still see a bit of ocean from a wide window seat in the second-floor master bedroom. Mrs. Talese, who is publisher of Nan A. Talese/Doubleday books (her writers include Margaret Atwood and Ian McEwan), likes to read there in the afternoons after her morning swim and some weeding in the garden. “It’s marvelous with the sun on your skin,” she said.

The house has seven bedrooms, four on the second floor and three on the third, one of which is Mr. Talese’s office. The three bathrooms on the second and third floors contain original claw-foot tubs, each painted to coordinate with the wall color.

Their purchase of the house came about almost by accident. The couple rented it for the summer in 1967 when their older daughter, Pamela, was a toddler, and their younger daughter, Catherine, was a newborn. They were planning to rent it again the next summer when they discovered that another family was considering buying it to live in year-round.

“I said to Gay, ‘Buy it,’ ” Mrs. Talese recalled. They were renting an apartment in an Upper East Side brownstone, a building they would buy many years later, and had little money to spare. But it didn’t deter her. “It was on the spur of the moment,” she said. “He’s cautious. He wants to be unfettered. But I like real estate.”

It turned out to be a wise investment. The house cost $32,000, including the adjoining lot. Mr. Talese said he recently had offers of $1 million to $1.4 million.

Although the two considered buying a place in the Hamptons or Connecticut in the 1970s to be able to spend more time with friends, they decided it would be too much like their social life in New York.

“It’s a place to be away,” Mrs. Talese said. “When we come down, we just stay at home.”

One of the first major changes they made was to winterize the house so Mr. Talese could write there year-round. A deck was added on the back, and bookshelves were added to in the dining and living rooms. And a pantry wall in the kitchen was demolished to open up the space.

Mr. Talese’s third-floor office is set up so that he rarely has to leave. There is a bed that he sleeps in when he’s in Ocean City alone; an ancient IBM Selectric with a grimy plastic cover; and a five-year-old Power Macintosh, which is not connected to the Internet. (Mr. Talese does not engage in e-mail and prefers to hand-deliver his manuscripts to his editors). To reduce the glare from a skylight, Mr. Talese has put together a plastic foam canopy that swoops over his U-shaped desk like a sail on a blustery day. Mrs. Talese calls it “the suspension bridge.”

His summer routine is to write in the morning, play tennis in the afternoon, then maybe watch a game on the 36-inch Sony Trinitron with DirecTV service that he has set up in his office. His tastes run from the Yankees to Japanese skiing.

At the other end of the hall is a room that doubles as a home gym (Mr. Talese lifts weights, and Mrs. Talese uses a videotape for Pilates) and a guest room for visiting writers. The novelist William Kennedy and Mr. Talese’s cousin, Nick Pileggi, are among those who have stayed and worked there for extended periods.

The house is strictly a kick-off-your-shoes-and-stay-awhile place, even though Mr. Talese continues his habit of dressing formally — even in the heat of summer.

“There’s nothing spiffy about this place,” Mr. Talese said one 90-degree day earlier this summer, looking natty in a long-sleeve, pink linen shirt with contrasting white collar, cufflinks, tan pants, a yellow-and-green neck scarf, white belt and brown shoes. Outdoors, he covered his silver hair with a straw fedora and, by early evening when the sun had lost its edge, slipped on a beige jacket with a yellow silk handkerchief tucked in the pocket.

Memories are what seem to count most in the Taleses’ Ocean City home. In the living room, the surface of an old baby grand piano with yellowing keys that once belonged to Mr. Talese’s parents is crowded with family photos and pictures of him with his writing peers — John Irving, Kurt Vonnegut, William Styron, Norman Mailer, Joseph Heller. In one baby photo, the Taleses’ daughter Catherine, now a photo editor in New York, sits on the lap of the legendary Random House editor Bennett Cerf.

Journalist pals, like the late David Halberstam, have always been frequent guests. Pamela Talese remembers her father and his writing cronies lined up on the front porch in their chairs in the mornings, each with his own copy of The New York Times.

Growing up, the Talese children remember old-fashioned summers of swimming, biking and baseball games in the yard. But they also had chores. Each morning they would buy their father a glazed doughnut, leave it outside his office door, then return at 11 a.m. with a plate of poached eggs. After reserving a tennis court for her father in the afternoon, Pamela would bring him a hoagie sandwich and half a beer at 3 p.m. while he watched a ballgame on TV. “Then he would go back and write,” she said.

Although the Talese children have long been on their own, they say they still love visiting the Ocean City house. Once there, they fall into the old routine — padding around in bare feet and taking daily dips in the ocean with their mother, who’s an avid swimmer. On a rare day, they might even catch a glimpse of their father on the beach in a long-sleeve shirt, straw hat, neck scarf and swim trunks, struggling with a newspaper and swatting flies.