Ford: Overpasses Will Cut Travel Time, Result May Bolster Resorts’ Economy

WILDWOOD – What’s the link between new Garden State Parkway overpasses and the tourism industry? According to Jay Ford, president and CEO of Crest Savings Bank, “Take a half hour off the travel time to go on vacation, that’s huge.” The savings in time getting to the resort was deemed even more valuable than the reduction in price of a gallon of gasoline.
Ford made his prediction of the impact those six overpasses will have at his eighth annual local economic forecast to Greater Wildwood Chamber of Commerce Jan. 21 at Wildwoods Convention Center.
The Egg Harbor Township resident told the chamber his daily commute has been trimmed. “I can only imagine the impact that will have on visitors coming to Wildwood,” he said. “Our visitors will come down and say ‘This is just amazing.’”
As a result Ford said he was “very, very bullish from a rediscovery standpoint for Wildwood tourism.”
Ford compared the Wildwoods’ real estate market to the national one that “we just never came back from that gray area” from 2004 to 2007 when over 1 million homes annually were being built.
While he acknowledged Wildwoods’ market is significantly smaller, he said, “Wildwood’s real estate sales to me are a great indication what I would describe as liquidity in this market. There are willing buyers and willing sellers. There are some areas in Atlantic County where there is no liquidity. You cannot sell a home in Egg Harbor Township. There is no buyer.” That is one result of the closing of four casinos in Atlantic City, he noted.
He projected figures which showed average sale price of homes in the Wildwood area was $305,000 in 2014 as compared to $285,000 in 2013, and $402,500 in 2006.
Ford also cited tourism tax receipts for 10 months in 2014 that increased 8 percent or about $100,000. That amount, he noted, was “over what was described as the island’s strongest year in 2012.” Part of the increase he attributed to the weather, since the tourism industry is largely a “byproduct” of the weather.
Looking north to Atlantic County again, Ford cited the separation between the two areas. “I remember when these (casino revenue) numbers started to turn in 2009, 10 and 11, meeting with my board and saying ‘After the fact there are challenges in Atlantic City, Wildwood is not going to be impacted by that, our tourism, we don’t have a lot of workers up in that area. The numbers are staggering. In 2014 they closed four casinos. That was $225 million of purchasing power taken out, 6,500 employees’ average salaries $32,000-$32,500 with tips, that’s a lot out of the economic engine.”
Further, he said of 11,000 households in Egg Harbor Township, in November 2014 there were 1,700 active unemployment claims there, he said.
Showing a slide of $75 billion, Ford said that projected total savings in gasoline nationwide would mean more expendable income for families, or a potential boost to the retail sector. With area gasoline priced at about $1.86 per gallon, the impact could be widespread for restaurants and other businesses.
For those who watch the stock market, Ford projected the Dow Industrial Average would go to 20,000 in 2016. Along with that, he thought the U.S. economy is going to be relatively stable, while the equity market seems to have volatility.”
The ballooning national debt, currently at $18.1 trillion, means that every man, woman and child in the nation would have to pay $58,000 to reduce the bill. That number Ford showed was compared to 2010 when the national debt was $14 trillion, and everyone would have had to pay $45,000 to end the debt.
In 1990, the figure was $3 trillion; in 2000 it was $6 trillion.
For those who like to reflect on “the good old days,” Ford said in 1981 the Fed tried to choke inflation and pushed the interest rate to 20 percent. In that year, a 30-year mortgage rate was 17.5 percent. Today, the Fed interest rate is .01 percent, and a 30-year mortgage is 3.85 percent.
“I can’t imagine they will come down much lower,” Ford said, and urged those holding mortgages at those higher interest rates to consider refinancing to save money.
“I expect the Fed will raise interest rates in 2015, not dramatically, perhaps at the mid-year meeting they will start with 25 basis points, and at year end, another 25 basis points to give themselves some leverage,” Ford said.