WILDWOOD — Pastries on the table were sweeter than the financial forecast Crest Savings Bank President and CEO Jay Ford presented to the Greater Wildwood Chamber of Commerce Wednesday, Jan. 20 at Wildwoods’ Convention Center.
“We are back to where we were 12 months ago,” said Ford, “Jobs, jobs, jobs, unemployment and the housing market.”
Regardless of the overall bleak outlook, Ford remained “very bullish” on Cape May County’s tourist-based economy. “We have a niche,” he said, “We are standing in a facility that was a community effort more than 20 years ago to build. It was no coincidence we had a grand opening of this, and our renaissance of real estate happened.”
Prestige of the past meant two cars in the driveway, Ford said. Baby boomers or today view a second home at the seashore as the new status symbol. Given the relatively soft real estate market, many view the present as an excellent time to purchase such a home, he said.
New housing starts, over a four-decade time line, have seemingly hit bottom. “There has not been another time in the last 40 years that housing starts have been this low,” Ford said.
The prior slide showed a chilling statistic of housing foreclosures. Statewide, New Jersey is experiencing an 8 percent foreclosure rate on homes, he said.
“One in seven mortgages are in foreclosure or delinquent. Twenty five percent of us, as homeowners, are underwater with respect to the value of our property versus debt, 25 percent!” said Ford.
“Vacations are like Christmas, all take one,” Ford added. Although people may take them, they are more reserved spending cash, as was evidenced by tourism tax receipts Ford cited for 2009 locally of $3.33 million, an 8 percent drop.
Even faced with such figures, Ford said many with whom he discussed the tourist season commented the “shortfall in revenue was blamed more on the weather, not the economy. That is a huge validation to our industry.”
While employment numbers in Atlantic City’s casino industry have dropped about 18 percent from a peak of 47,379 three years ago, using July to July figures, the overall impact on Cape May County has not been that significant, Ford said.
“The good news for Cape May County and our economy, not speaking of employment goods and services, is not connected to Atlantic City to any great degree,” he said. He said there were some 6,100 firms, selling $4.1 billion worth of goods and services to the Atlantic City gaming industry.
Ford said there were 63 companies in the county that provide such goods and services to the gaming industry valued at $5.4 million, or “less than one tenth of 1 percent,” he added.
For all the nation’s economic woes, Ford noted, “We are still the biggest engine out there.” Of the world’s gross domestic product (value of all goods and services produced) of $70 trillion, Ford said the United States is responsible for $14 trillion of that total.
“We are the biggest by far. China is about 50 percent of us,” he said. But he noted that in China and India, potential economic powerhouses, their potential is yet to be realized, but will likely be substantial.
Such figures show why international markets are so sensitive to the United States GDP, he added. “Our challenge is to maintain the quality of our national debt, and the ability to continue to fund the debt,” he continued.
“It’s difficult to be optimistic, but opportunities will present themselves,” he said. In the economic gloom of the past year, Ford said Crest Savings Bank had made about $75 million in loans, as compared with about $35 million in 2008.
Like most Cape May County banks, Crest Savings did not receive federal TARP money. “Smaller institutions were insulated in what has happened on the real estate market.”
Ford believes inflation will remain flat, and that the Federal Reserve will not do much regarding interest rates. “There is not enough in the employment market or manufacturers, not enough pressure to push prices,” said Ford.
“Probably, 2010 will not be too dissimilar to 2009 in the status quo f many indicators. Maybe once the inventory of real estate is absorbed, ad the door is opened…what we face is a very challenging time from inflation,” Ford concluded.
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