Local Economy Showing Positive Signs

WILDWOOD — “We have liquidity. We’re selling 650 units every year. For Realtors and brokers, it is not near the heyday, but it is liquidity none the less,” said Jay. M. Ford, Crest Savings Bank president and CEO at the breakfast meeting of Greater Wildwood Chamber of Commerce Wed., Jan. 11 at Wildwoods Convention Center.
“Prices have stabilized,” Ford said during his annual financial forecast. Ford pointed to residential sales in Wildwood, with figures provided by Multiple Listing Service. In 2011, 647 properties were sold with an average sale price of $300,000. That is a 2.8 percent decrease from the 655 sales in 2010, with an average sale price of $308,750.
In 2006, there were 789 sales, with the average sale price being $402.500, Ford said.
Recalling his sentiments in the 1990s about Wildwood, Ford said he was “trying to convince real estate investors there was little, if any, downside risk” investing on the Five Mile Beach. “I have similar feeling today.” With more baby boomers, those reaching their 60s and retirement age, Ford said if the stock market appreciates 10-15 percent, those “boomers will be in the market heavily looking for places to entertain their children and grandchildren. We are very blessed.”
Tourism, the island’s and county’s driving economic force, experienced a good 2011 season, until Hurricane Irene headed north. Even calculating the loss of an entire week, “It would appear it was only down a couple of percent at the end of the day,” Ford said.
Executive Director John Siciliano of Greater Wildwoods Tourism Improvement Authority agreed with Ford, “Through July, numbers were up 20 percent. In August the numbers that came in saw the effect of (Hurricane) Irene.”
Casino revenues continue their fall in Atlantic City, Ford noted, as more gamblers stay closer to their home and try their luck at casinos in Pennsylvania and New York. He showed revenue figures, provided by the N.J. Casino Control Commission showing 2011 revenues of $3.025 billion, down 8 percent from the prior year, and far below the 2006 figure of $5.2 billion. Casino employment, too, has fallen from 45,000 in 2006, with 1,200 of those from Cape May County to 34,000 in 2010, with 800 of them living in Cape May County.
Ford was skeptical that the $2.3-billion Revel casino, still under construction, expected to employ about 5,000 bringing more prosperity to that city. Citing the casino revenues, Ford forecast the “demise of a couple of casinos, which is unfortunate.”
Casino revenues are important to the state coffers. “I hope that we stabilize,” said Ford, noting revenues were “down another 8 percent from last year.”
The national debt in the United States continues “out of control,” said Ford. With an unimaginable $15.2 trillion, the nation’s debt means every man; woman and child must pay $49,000 of that debt weight. In 2000, the debt was $6 trillion while in 1990 it was $3 trillion. Ford held out little hope, given the gridlock in Congress, that anything would be solved concerning the debt.
He urged everyone to compare the debt figure to what they make on an annual basis.
“I believe if it were not for (Federal Reserve Chairman) Ben Bernancke and the Fed, we wouldn’t be sitting here today in the throes of a great depression, not a great recession,” said Ford. By action of the Federal Reserve, Ford said mortgage rates, under 4 percent, offer homeowners an opportunity to refinance to save money, or a good time for “purchase opportunities.”
“Oil still is a variable that can inflict pain on the U.S. economy,” Ford said, although prices have stabilized somewhat. He projected oil will range from $90 to $110 per barrel.
On the bright side, “We are reducing some of our dependency on oil. About 25 percent of what we use comes from Canada.” There is potential for energy independence, he said. While political candidates speak of energy independence “in the campaign process, nothing has been done. We must become totally energy independent from all our country peers.”
Gold, “an interesting investment when at $1,900 an ounce it peaked…to get a 10 percent return at $1,900, the value would have to go to $2,100,” Ford reminded potential buyers. “Think about that. It is a good hedge against inflation, but inflation is not going to be the challenge going forward in the next number of years,” Ford said.
Ford said he enjoys delivering the annual financial forecast. “I love to see the expressions on faces. I am not an expert, I extracted (data) from many sources.”
Ford has been president and chief executive officer of Crest Savings Bank since 1993. He recently became chairman of the Audit Committee of the Federal Home Loan Bank of New York. He and his wife reside in Atlantic County.
Contact Campbell at (609) 886-8600 Ext 28 or at: al.c@cmcherald.com