http://www.realestatejournal.com/secondhomes/20070615-hoak.html?mod=RSS_Real_Estate_Journal&rejrss=frontpage

As you can read from the above article just published on Wall Street Journal, Eastern shore region including Delaware beach and Maryland beach resort areas presents unique advantages in location. The key advantage is that it’s only 2 - 3 hours drive away from big metro areas like New York City, Philadephia, Baltimore and Washington DC. This is a proximity to more than 20 million population, one of the biggest population clusters in the USA. When people think about vacation homes along the east coast, they automatically think of traditional location like Florida. It’s no denying that Florida will remain as the key vacation depot. However, most people missed one key advantage to the Eastern shore: Close proximity to the biggest population cluster in the USA. From AARP studies, most baby boomers will not relocate to more than 3 hours drive away from their primary homes. The reason is that they want to be close to their children, frends and relatives. About 15-20% may decide to relocate to warm states like Florida or North Carolina’s outer banks, but the majority, i.e., more than 80% will move to vacation resort closer to home. Now, we can analyze the beach situation along the east coast near to the DC -> Boston Corridor. Most of the New England’s beach towns have become very expensive, with New York’s Hampton beach region to be the most expensive. Next came the New Jersey’s Gold coast, which has in recent years become very expensive as well, most of the prime locations in ocean front are priced above millions. Basically, these regions have almost become out of touch for regular income families. The riches already came and grabbed most of the prime locations while the middle incomes are still scrambling to find affordable properties in the metro regions. Currently, Eastern shore’s prime has also risen along with its sister regions up in the north, but I believe there is a difference in pricing that is making this region more affordable to the new wave of retirees that will soon arrive in the next 5-10 years. We can still find relatively affordable beach front or Bay front housing in Delaware and Maryland beach. However, this temporarily and relative “affordability” will not last for very long. The reality is that 75 million babyboomers will be in the pipeline of retiring. This trend will peak in 15 years from now. 80% of baby boomers currently living in DC -> Boston region will consider a second home in 2-3 hour drive. That will be a big demographic tidal wave coming in…, the fact is that Delaware/Maryland shore regions are one of the last few resort regions where middle class can still afford today. Also, standing out is that DE/MD beach regions are relatively warmer than their New England, NY and NJ beach areas. Combining these positive factors, I project that within next 10 years, there will be huge price appreciation happening in this area. I already bought into this area, will potentially increase my investment there. I may even move my primary home there, while continues to keep my rental homes in DC metro intact. After all, it’s only 2.5 hour drive, I can manage the business in both places.

Besides the above discussed advantage, I also have researched the county land development plan for these coastal counties. My finding is shocking: The land-lock situation is even more severe than metro regions like in DC metro. Basically, there are only very limited parcels of land along the beach and Bay area that can be approved. These lands are already under the control of several major home builders. There are almost none future land available for further development. What does this land-lock situation imply to us? Huge price appreciation going forward. However, we must be realistic too, due to the current housing slump, in the short term, i.e., next 3-4 years, we may not and should not expect to see fast appreciation in price. I perceive the next few years as a perfect accumulating period for serious investors.