When is it the best time to buy a Shore home in {floods}?

Did the recession hit the Shore housing market? How is it faring now?

The recession did some damage to the Shore market, confirms Allan Dechert, co-owner of Avalon-based agency Ferguson Dechert. For instance, in the upper-echelon town of Avalon, median home sales prices dropped 36 percent between 2004 and 2009. But it wasn’t just the financial storms that took a toll. In Margate and Ventor, Hurricane Sandy made 2013 a worse year for home sales prices than 2009. Here’s the good thing about second homes, though: Owners usually take the long view, looking at value over 10 years or more. From that perspective, some Shore towns have fared really well, with prices in Margate up 43 percent, Cape May up 21 percent, and Stone Harbor up 11 percent over the past decade.

Other towns may not have recovered as quickly (Avalon is still down 20 percent over 10 years), but numbers don’t tell the whole story, because things are looking up pretty much across the board. Dechert points out that the pace of home sales is brisk, and interest is high: “We had a very active December, and it’s carried over into this year.” He also notes that there’s a lot of new construction in Avalon, Stone Harbor, Sea Isle City and Ocean City — a trend we’ve also seen in Margate, and a sign that the bounce-back is strong. The April 2015 numbers from real estate site Trulia put the average price per square foot of home sales in Avalon at $668, up more than 19 percent from the same period in 2014. In fact, the only towns that saw a sales price decrease between 2013 and 2014 were Atlantic City and Brigantine.

I desperately want to buy down the Shore … where the hell do I start?
Seaside Park. Photograph by Chris Sembrot.

Seaside Park. Photograph by Chris Sembrot.

“It’s like planning to have a child,” says Keith Coolahan, senior loan officer at Citizens Bank. “You’ve got to plan ahead.” The bad news: Traditional savings methods aren’t keeping up with the pace at which the Shore real estate market is moving, according to Coolahan. But dry those tears — there are ways to get creative. The first step is to find a bank that’s eager to take on second mortgages, which some stopped doing because they were burned so badly in the meltdown. Lenders will still look at your whole financial picture — credit profile, FICO score, debt-to-income ratio and more — but if you have an existing relationship with a bank, exceptions might be granted. (Example: A high FICO score could compensate for other less-qualifying factors.) Banks are also starting to offer 15 percent or lower down-payment options for mortgages, and if your nest egg is more quail- than ostrich-sized, you can always take out a home equity loan on your primary residence or even dip into your 401K for that down payment.

But before you even start talking dollars and cents, Coolahan suggests forming relationships with real people — like local realtors and bankers — who know the nuances and unique products of the Shore market.

Is it better to buy for location or house?

If you’re buying down the Shore, experts agree it’s all about the location; land is precious and finite in our coastal towns, regardless of what sits on top of it. (That’s especially true if the land has a view of the ocean or bay.) That said, consider your needs and immediate situation. For example, Jack Binder, owner of the Jack Binder Real Estate Group, sees a lot of buyers looking to downsize their permanent residences on the Main Line for larger family gathering places at the Shore — which might take them inland.

There are indeed expenditures that are particular to the Jersey Shore. New Jersey has the highest residential propertytaxes in the country, and they continue to climb. Shore towns hit hard by Sandy and A.C.’s fall got especially sharp increases in 2014. Atlantic County’s property taxes jumped 34 percent from 2009 to 2014. In that county, Longport — an exclusive enclave — saw an average property tax bill of $7,448 in 2009 soar to $9,776 in 2014. And pesky weather patterns account for more hidden costs, like when it comes to the recently volatile flood insurance rates. Take Ocean City, where rates can range from $600 a year to around $3,300 a year, depending on when your house was built (1975 is a big benchmark), what it sits on (crawl spaces cost less), and whether it adheres to the latest building code regulations, according to Thomas Heist, president of the Thomas Heist Insurance Agency in Ocean City. (Note: As flood insurance is a part of some mortgage payments, this might become an issue when reselling your home.) What are those new building code requirements? They might include adding breakaway walls, installing hurricane-proof windows, or elevating the house on stilts.

Does buying in Atlantic City make me crazy or savvy?

Real estate is always a gamble (get it?), and for those looking for the ultimate buy-low scenario, the payoff in A.C. could be Powerball-big. Just ask Bart Blatstein, who recently purchased Pier Shops at Caesars (recently valued at $200 million) for pennies on the dollar. Still, A.C.’s issues are hard to ignore. Whatever you think the long-term future will be for the city by the sea, the local government has increased residential property taxes by more than 50 percent in the past two years, to offset revenues no longer being collected from the bevy of recently closed casinos — and it’s hard to say when or where those hikes will end.

Regardless, says Paula Hartman, an associate broker with Berkshire Hathaway Home Services and Fox & Roach Realtors in Margate, A.C. is currently “selling like hotcakes,” especially the “tiny” (and furnished) condos with parking that are on the Boardwalk. How low is low? Hartman says she sold five smaller units in April for under $50,000 apiece.

The other upsides? Atlantic City has the bones of a vibrant Shore town: free beaches, a lively Boardwalk, 48 walkable and bikeable blocks, a direct shot from the city, train service, and a bunch of dining and entertainment options. Elizabeth Terenik, director of Atlantic City’s planning and development department, suggests looking at the Chelsea/Chelsea Heights area, a neighborhood in the southern part of the city, near Ventnor. She says a variety of opportunities exist, from vacant land to cheap condos all the way up to the $1.5 million townhomes at the Breakers, a new 12-unit luxury development offering buyers an enticing tax abatement.

What’s the best Shore town for families? How about for empty nesters?
Wildwood. Photograph by Chris Sembrot

Wildwood. Photograph by Chris Sembrot

All Shore towns are good for families, really — the beach is a sandbox writ large and accompanied by ocean, sun and other children. What could go wrong? There are some towns, though, that really cater to kids with an almost Disney-like expertise, and chief among them is Ocean City. There, the Boardwalk is extensive and kid-friendly, with multiple arcades and rides; the food is classic seashore, with saltwater taffy you can watch being made; and the town is very clean, well regulated and frequently policed. And O.C. is a blue town, which means until they can drive, the kids can’t get into any alcohol-related trouble at all. Very Bedford Falls.

As for empty nesters, the Margate/Ventnor/Longport axis works nicely due to its location and amenities and because it’s relatively quiet. These are not the Shore’s party towns. “There’s an array of healthful restaurants, from tapas to Japanese,” says Margaret Guber-Nulty, VP and manager of Berkshire Hathaway Home Services’ Margate office. And she points to multiple exercise options, like bike rides on the Boardwalk and yoga classes on the beach, as well as bus trips to New York City and senior bus trips to the supermarket. There are even beach-buggy services that will take you and your chair to the beach. But she doesn’t want people to think of Ventnor and Margate as elderly. In fact, many people buy or rent there — including young families — because of the proximity to all the entertainment options in A.C. “And there are golf courses right across the bridge,” she says.

Where are the best places for investments? How about some deals?

In 2014, the number of second-home sales across the country skyrocketed 57 percent compared to the year before, according to a recent report by the National Association of Realtors. At the Shore, those with the cash will always look toward places like Stone Harbor (median sales price: more than $988,000 in 2014) and Avalon (median sales price: more than $906,000 in 2014). But Atlantic City is the true buyer’s paradise — in some respects. (See the chart at right.)

In search of something in between those two price points? Head to either side of the Great Egg Harbor Inlet. In Ocean City, median sales prices have stayed strong, hovering in the $400,000-to-$500,000 range since before the recession. In Margate, sales prices have appreciated 43 percent over the past 10 years; in fact, this town made it through the recession and hurricane better than any other southern Shore town.