Here’s why this Shore townhome building sold for $200K over asking price

A five-unit townhome building in Wildwood was listed, sold and closed within five weeks for $200,000 over its asking price.

The property, at 142 E. Youngs Ave., got about a half dozen offers. “We got offers almost immediately, within 24 hours, some site unseen,” said Brian Reed, the listing agent with Long & Foster Real Estate. “It got more activity than I imagined it would.”

The five townhomes each have three bedrooms and one-and-a-half bathrooms. They have granite countertops, wood cabinets, tile flooring, central air conditioning and heat. The building was listed Sept. 8 for $799,777 and closed Oct. 12 for $999,999, 25% above the asking price.

Sales data is not available for multi-family properties, but townhomes in New Jersey sold for a median price of $400,000 in September, according to data from New Jersey Realtors. That’s an increase of about 16% from a year ago when they were selling for $345,000.

In Wildwood, the median sales price of a townhome was $450,000 in September, up nearly 65% from a year ago when the median price was $273,000, according to New Jersey Realtors.

Four of the units are occupied year-round by tenants who have leases through July 2024. Reed said he thought those leases, which he believes are below market value at $1,200 per month, might be a drawback for potential buyers.

But demand from three different types of buyers made the property sell quickly, Reed said.

These include local business owners need places to house the international students they employ during the summer; people who want to do short term leasing, such as Airbnb, because in 16 weeks they can make 52 weeks worth of rent; and, investors who want to fix up the units and sell them as individual condominium units.

“At today’s market value, you’re looking at $400,000 per unit, times five,” Reed said.

Rising interest rates are decreasing buying power for single family home buyers by about 25%, according to data from the Otteau Group.

But they’re not impacting multi-family property buyers, Reed said.

“Most investors buy with cash,” he said. “And if they’re doing a condo conversion, they borrow short term money with a higher interest rate because they’re not going to be in the loan for more than a year.”

Are you an agent, buyer or seller who is active in this changing market? Do you have tips about New Jersey’s real estate market? Unusual listings? Let us know.

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Allison Pries may be reached at apries@njadvancemedia.com.