Atlantic City Amid Housing Boom, as Region’s Gaming Industry Struggles
The original version of the Monopoly board game is based on Atlantic City. And there has been plenty of buying and selling of properties recently in the New Jersey town.
The nine casinos in Atlantic City are continue to struggle because of COVID-19, but the region’s residential housing market is thriving.
Gross gaming revenue (GGR) for Atlantic City’s brick-and-mortar casino operations totaled $1.5 billion last year. That represents a loss of nearly $1.2 billion, or 43 percent of 2019 GGR.
Though online gaming and sports betting helped offset some of the losses, the steep decline in visitors to Atlantic City’s land-based casinos devastated the gaming town’s economy. In December of 2020, Atlantic City reported an unemployment rate of 17.9 percent, far higher than the national average of 6.5 percent.
Despite the area’s economic struggles, the real estate market is blossoming.
Per the National Association of Realtors (NAR), Atlantic City home prices jumped 30 percent in the fourth quarter. Residential selling prices continue to climb, the average Atlantic City home going for 35 percent higher in January 2021 compared with January 2020.
“Although tourism took a major hit overall throughout 2020, our data shows that vacation housing still did well in terms of sales,” said Lawrence Yun, NAR’s chief economist.
Yun said many people purchased in Atlantic City because more Americans are now working from home, and can do so in a leisure destination such as the casino town.
Atlantic City Overhaul
Atlantic City’s housing boom isn’t only about people being able to work from home, and therefore able to buy and live at the shore. There’s also been a concerted effort to spruce up the town.
Joshua Garay, a real estate broker, told The Wall Street Journal this week that local officials in Atlantic City and area developers have made the town a more welcoming place to live and work.
They want to build up the Atlantic City economy to where it’s based off of businesses and activities that are not casino related,” Garay explained.
Garay is consulting with the latest owners of the long shuttered Atlantic Club Casino Hotel. He says the Boardwalk eyesore is being renovated. The goal is to reopen the hotel, and perhaps add condominiums.
Last year, Hard Rock International Chair Jim Allen expressed his disappointment with the conditions in Atlantic City. Hard Rock invested $562 million to reimagine the Trump Taj Mahal into the rock ‘n’ roll themed casino resort.
Allen said in January 2020 that street lights near the Boardwalk had been out for months.
“The city can’t get something fixed as simple as the street lightning,” he told the Associated Press at the time. “Frankly, the town’s in worse shape today than it was when we bought the building [in 2017].”
Following the most difficult of years, analysts and casino executives in the US gaming industry are betting on pent-up demand to return visitors and gamblers. But during a recent event hosted by the Greater Atlantic City Chamber titled “Economic Outlook and Expectations for Recovery,” some on the panel expressed ongoing worries.
Specifically, the new, more contagious COVID-19 strain. “This, unfortunately, is really going to complicate things for the leisure and hospitality sector,” said Tracy Hadden Loh, a fellow at the Brookings Institution.
If travel and casino restrictions are rolled back, Stockton University economics professor Oliver Cooke says the Atlantic City economy will further suffer.
“Casinos are important to Atlantic City’s economy, obviously,” Cooke explained. “But they become less important for the entire metropolitan area economy to the extent that they actually don’t have human beings standing inside those casinos who wander out into other places in the city. So, if everyone is just gaming right from their computer, which clearly they have been over the last 10 months … how that shakes out moving forward is an interesting question.”
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