OT: Jersey Shore Real Estate Market Advice Needed

[scfa99]

Posting this here as I am always astounded by the useful and detailed information that is posted here about a wide variety of topics.

We are currently starting to think about buying a home at the beach (South Jersey, Sea Isle or nearby) and the prices are crazy. We are fine waiting it out a few years but interest rates and covid not going away are motivating factors to jump in sooner. Realtors seem to be in cahoots in these small towns pumping up/holding prices and all talk about how things will keep going higher and that over a 10 year period (shore cycle) home prices double historically, yet have no data to back it up.

Trying to gauge what those of you who own beach houses think of the current real estate market and where you think its headed for beach houses in NJ? Do you see it cooling off and significantly dipping? We plan on renting it for 5-8 weeks in the summer. Rental rates seem at an all time high and hard to find data. Are they and if so how much (%) higher than pre covid? What advice do you have to someone pondering jumping into this market? Appreciate any tips/feedback you have.

 

[Beancounter88]

Have a house on LBI. Can tell you prices are through the roof, but so are the rental rates. Can't tell you when the market dips, but a couple of points to keep in mind. First property taxes vary greatly by town (my taxes in LBI are ridiculously cheap compared to North Jersey). Contractors have also jacked up their prices because everyone is buying and building these days and they are in demand. I would still consider buying a POS on the ground and either tearing it down altogether or jacking up the house and then re-doing some of it. Jacking up homes is actually surprising inexpensive compared to other reno's. Lastly, some areas are extremely safe and others can get a little sketchy - do a little homework on crime rates, police forces, etc.

 

[HeavenUniv.]

99, I have never owned any property so I can’t help on prices/value/etc. One thing I can tell you living at The Shore—really investigate flooding. Can’t tell you how many times I am driving into Island Beach State Park and see streets closed off in Seaside on the Barnegat Bay side. And I will think to myself, heck, there wasn’t THAT much rain last night. But sometimes the wind, timing, etc. After Hurricane Sandy, rebuilt houses were built higher, but lots of houses have not been changed.

 

[Proud NJ Sports Fan]

Have a house on LBI. Can tell you prices are through the roof, but so are the rental rates. Can't tell you when the market dips, but a couple of points to keep in mind. First property taxes vary greatly by town (my taxes in LBI are ridiculously cheap compared to North Jersey). Contractors have also jacked up their prices because everyone is buying and building these days and they are in demand. I would still consider buying a POS on the ground and either tearing it down altogether or jacking up the house and then re-doing some of it. Jacking up homes is actually surprising inexpensive compared to other reno's. Lastly, some areas are extremely safe and others can get a little sketchy - do a little homework on crime rates, police forces, etc.

People pay you rent?
In NJ you don’t have to. 😉

LBI is awesome, one of the few places left in NJ that feels like the America we grew up in.

 

[Plum Street]

People pay you rent?
In NJ you don’t have to. 😉

LBI is awesome, one of the few places left in NJ that feels like the America we grew up in.

Don’t you rent in belmar ?

 

[ClassOf02]

My in-laws bought up a few houses in LBI after Sandy, tore them down, and rebuilt. They’ve done a combo of renting them, selling them, and using them for pleasure. Overall, it’s been very lucrative. They actually sold all but one as of YE 2019 so they’re kicking themselves a bit (could have gotten much higher if they held on a bit longer).

My observation: I don’t see housing prices going down anytime soon absent another Sandy-like event (even then it probably would not have as much of an impact as Sandy had since so many homes have been raised since). The pace of increases will probably slow a bit. Rental rates are through the roof. My in-laws’ remaining home is on the bay in Surf City and will get $10k/week. They were offered $100k for 2 months (turned it down as they wanted to be able to use the house for themselves).

Bottom line: if you’re in a position to afford it, great. Will always have high demand for rentals, but you’ll probably want to balance the rental income potential versus the personal pleasure/enjoyment of having a place your family & friends can enjoy.

 

[Proud NJ Sports Fan]

Don’t you rent in belmar ?

Not this year , first time in a long while

I didn’t go in on it.
Stayed over there once with my buds though.

Still a great time

 

[mdk01]

Don't own but 2 comments:

While the price of the home may normally double over 10 years, I don't think that will hold true for a home purchased after the runup over the last 18 months.

If you would only rent it for 5 weeks you might want to crunch some numbers on the tax impact of renting it for slightly more than the 14 days the income is tax free if you don't exceed that time frame, taking the agita of being a lessor into account Obviously 8 weeks or more would be entirely different.

 

[newell138]

Don't know what the taxes are in Sea Isle but taxes here in Ocean City are relatively cheap compared to the rest of NJ, only 1% of assessed value. Obviously no one ever knows when the market will come back to reality. Sea Isle does flood ridiculously anytime it rains so be wary of that and prices in Sea Isle continue to climb, probably close to 3x what they were 4-5 years ago.

Send me a PM if you are serious, my daughter is a realtor here in Ocean City but knows Sea Isle well and can help you out. Depending on what you are looking for you may have more options in OC than Sea Isle just due to the amount of available inventory.

 

[T2Kplus20]

Don't know what the taxes are in Sea Isle but taxes here in Ocean City are relatively cheap compared to the rest of NJ, only 1% of assessed value. Obviously no one ever knows when the market will come back to reality. Sea Isle does flood ridiculously anytime it rains so be wary of that and prices in Sea Isle continue to climb, probably close to 3x what they were 4-5 years ago.

Send me a PM if you are serious, my daughter is a realtor here in Ocean City but knows Sea Isle well and can help you out. Depending on what you are looking for you may have more options in OC than Sea Isle just due to the amount of available inventory.

We are in a holding pattern for buying in Stone Harbor. Just can't get down there enough to make it worth the hassle of having a 2nd house right now. COVID has actually helped this out since WFH is becoming more and more accepted. We shall see. We can be patient and see what the market does over the next 2-3 years and reassess. Flooding doesn't seen too bad on the south end of Seven Mile Island, but I have a lot of HW to do before targeting a specific location.

 

[newell138]

We are in a holding pattern for buying in Stone Harbor. Just can't get down there enough to make it worth the hassle of having a 2nd house right now. COVID has actually helped this out since WFH is becoming more and more accepted. We shall see. We can be patient and see what the market does over the next 2-3 years and reassess. Flooding doesn't seen too bad on the south end of Seven Mile Island, but I have a lot of HW to do before targeting a specific location.

You cant go wrong there, and agreed, flooding not really an issue there. I do notice more and more NY traffic in Avalon and SH which is just going to keep pushing prices up.

 

[scfa99]

I wish we could afford Avalon of SH, pre covid yes but now forget it, maybe if we wait it out things will dip. WFH definitely is another motivating factor to purchase sooner.

 

[patk89]

We are in a holding pattern for buying in Stone Harbor. Just can't get down there enough to make it worth the hassle of having a 2nd house right now. COVID has actually helped this out since WFH is becoming more and more accepted. We shall see. We can be patient and see what the market does over the next 2-3 years and reassess. Flooding doesn't seen too bad on the south end of Seven Mile Island, but I have a lot of HW to do before targeting a specific location.

That sounds like a good plan. Unless you plan on renting the house out, which doesn't sound like you would need to do, buying now and not using it regularly is expensive. It does shield you from further price increases but after the run up of the last few years, is not a huge risk.

https://floodfactor.com/city/stone-harbor-newjersey/3471010_fsid

 

[T2Kplus20]

I wish we could afford Avalon of SH, pre covid yes but now forget it, maybe if we wait it out things will dip. WFH definitely is another motivating factor to purchase sooner.

Avalon and SH, best towns on the NJ Shore.....and it's not even close. :)

 

[T2Kplus20]

That sounds like a good plan. Unless you plan on renting the house out, which doesn't sound like you would need to do, buying now and not using it regularly is expensive. It does shield you from further price increases but after the run up of the last few years, is not a huge risk.

https://floodfactor.com/city/stone-harbor-newjersey/3471010_fsid

Correct, definitely not renting! Thanks for the link, awesome info. Interesting to see the houses at higher risk are on the bay side. I guess this is the normal for many shore towns.

 

[Sleeping Giant]

Real Estate is scorching hot in LBI right now. My parents retired in Beach Haven. and are cashing out on the house because good chance these prices will not hold as they are insane right now. Got multiple offers in 2 days and went way over ask. Would not buy shore property now as there definitely will be a correction in the next few years…

 

[gmay8]

Real Estate is scorching hot in LBI right now. My parents retired in Beach Haven. and are cashing out on the house because good chance these prices will not hold as they are insane right now. Got multiple offers in 2 days and went way over ask. Would not buy shore property now as there definitely will be a correction in the next few years…

Agree with you. My parents, my inlaws, and my brother all have houses in LBI. The real estate near them has ballooned. Small, pillbox type old school LBI houses are going for over $1M, not even that close to the water.

I love LBI, been going my whole life, but man they are putting houses on every square inch of that island, it's going to sink.

 

[Knight Shift]

Avalon and SH, best towns on the NJ Shore.....and it's not even close. :)

Spring Lake, Sea Girt, Bay Head and Avon say hello.

 

[T2Kplus20]

Spring Lake, Sea Girt, Bay Head and Avon say hello.

I enjoy SL, but SH and Avalon beaches are way better and so is the summer clientele. Much more laid back and family focused. No bennies in sight! We're down in SH now. Also, I prefer the feel of true barrier islands (which is a negative for SL).

I was born and raised in East Brunswick, so I did the northern shore towns growing up, from Sandy Hook to LBI. Just not my preference anymore.

 

[Rutgers Chris]

I bought on LBI in December and my presumed value is up about 20% from there already. I’m in the “this can’t possibly keep up” camp, but I also don’t foresee a crash below what I paid. If you plan to rent, even at last summers prices you’ll do just fine. As someone said above, buying a distressed house and building a new one might get you the best bang for your buck long term if you have the capital to do so now.

 

[jtung230]

OP, I have been looking for the past 10 years. Pre-Covid, everyone who bought a beach house in 05-07 were in the red. It took a long time to just get back from pre-Sandy pricing. After Covid, prices blew past 05-07 levels. IMHO, you should at least wait a summer. I don’t think prices will go much higher right now (top of the market). I agree with the above post about buying a knockdown. That’s the best value right now.

 

[RUAldo]

Same here - been looking on and off for about 5 years. Once interest rates start creeping up I hope prices begin to normalize because they are out of control. I was in LBI last week and the island is untouchable for less than $1M. Who is buying all of these $2M shore homes? NY money? People taking out massive mortgages? I get the impression mortgage balances are still skyrocketing and there will come a day of reckoning. I’ve talked to people that seem to be of the mindset they’d rather borrow $750K at 3% instead of $500K at 4.5%. I haven’t done the math so no clue what makes sense. All I know is people are borrowing a ton of money to buy real estate.

 

[e5fdny]

I enjoy SL, but SH and Avalon beaches are way better and so is the summer clientele. Much more laid back and family focused. No bennies in sight! We're down in SH now. Also, I prefer the feel of true barrier islands (which is a negative for SL).

I was born and raised in East Brunswick, so I did the northern shore towns growing up, from Sandy Hook to LBI. Just not my preference anymore.

What do you think you are? LOL

Until you own…you ain’t. And even after that some will remind you you’re the newcomer (or worse - 😝).

 

[jtung230]

I’ll share the two observations during my 10 years of searching for the right place. A lot of people have money and they don’t need to sell when prices come down. I was looking at listings that were 700 days old and they will not lower the price. When prices do come down, it’s always the starter homes and knockdowns that trade first. The only “deals” are always estate sales.

 

[HeavenUniv.]

Bay Head is great. Nobody even knows how to get on the beach. Still , though, my favorite place is Island Beach State Park from Labor Day until Memorial Day. If I ever win the lottery, I am buying a horse and will ride there every day.

 

[tom1944]

I have family with homes in OC, Avalon and Cape May. Each wanted a different experience so they purchased accordingly

 

[RUskoolie]

I am a real estate broker in New Brunswick and sell real estate all over Central NJ. I have visited the shore quite a bit (more Northern beaches than South). My honest opinion is I don't think prices are slowing down. Yes, rates MIGHT rise but idk under this administration. There is absolute massive inflation going on right now with all the money printing and more coming if this 3.5T bill gets passed. The administration is also trying to eliminate 1031 exchanges and I have people left and right doing 1031 exchanges because they're panicking that they'll owe a massive amount of taxes they did not plan for. Then you throw in what COVID has done to working from home. The days of 5 days of office work might be finished and it makes living permanently in some of these shore towns more attractive.

Combo all of that with the fact that homes across the country have not been built fast enough to meet demand and you have our current real estate market.

Buying down the shore never ever makes financial sense. The ROI is like 4% cash flow maybe 5 but the appreciation keeps happening and if it makes you happy then do it OP. You only live once.

 

[Knight Shift]

I am a real estate broker in New Brunswick and sell real estate all over Central NJ. I have visited the shore quite a bit (more Northern beaches than South). My honest opinion is I don't think prices are slowing down. Yes, rates MIGHT rise but idk under this administration. There is absolute massive inflation going on right now with all the money printing and more coming if this 3.5T bill gets passed. The administration is also trying to eliminate 1031 exchanges and I have people left and right doing 1031 exchanges because they're panicking that they'll owe a massive amount of taxes they did not plan for. Then you throw in what COVID has done to working from home. The days of 5 days of office work might be finished and it makes living permanently in some of these shore towns more attractive.

Combo all of that with the fact that homes across the country have not been built fast enough to meet demand and you have our current real estate market.

Buying down the shore never ever makes financial sense. The ROI is like 4% cash flow maybe 5 but the appreciation keeps happening and if it makes you happy then do it OP. You only live once.

We steadily made 10+% ROI cash flow when we had a mortgage, which we paid off after Sandy. Now making closer to 15% on a beach property in Belmar.

 

[RUSK97]

What’s a bennie?

 

[T2Kplus20]

What do you think you are? LOL

Until you own…you ain’t. And even after that some will remind you you’re the newcomer (or worse - 😝).

Bennies don't come from the Princeton area. LOL! I think you know that. :)

I'm already friendly with the local elected officials and town administrator. Prior to COVID, I attended a few meeting since they wanted some land use advice. Great people. None of them are generational natives.

 

[T2Kplus20]

What’s a bennie?

Benny is a pejorative term used by year-round residents of the Jersey Shore to describe stereotypically rude, flashy, loud tourists from North Jersey and New York.

Benny (slang) - Wikipedia

en.wikipedia.org

Examples:

 

[e5fdny]

Bennies don't come from the Princeton area. LOL! I think you know that. :)

I'm already friendly with the local elected officials and town administrator. Prior to COVID, I attended a few meeting since they wanted some land use advice. Great people. None of them are generational natives.

You’re still a visitor. Doesn’t matter where you come from. LOL

Shoobie for you 609ers.

 

[T2Kplus20]

You’re still a visitor. Doesn’t matter where you come from. LOL

Shoobie for you 609ers.

Visitor, yeah, so what? I think you are getting confused.

Shoobies mainly go to WW, not Seven Mile Island.

 

[mdk01]

What’s a bennie?

A "flatlander" in New Hampshire.

 

[RUAldo]

I am a real estate broker in New Brunswick and sell real estate all over Central NJ. I have visited the shore quite a bit (more Northern beaches than South). My honest opinion is I don't think prices are slowing down. Yes, rates MIGHT rise but idk under this administration. There is absolute massive inflation going on right now with all the money printing and more coming if this 3.5T bill gets passed. The administration is also trying to eliminate 1031 exchanges and I have people left and right doing 1031 exchanges because they're panicking that they'll owe a massive amount of taxes they did not plan for. Then you throw in what COVID has done to working from home. The days of 5 days of office work might be finished and it makes living permanently in some of these shore towns more attractive.

Combo all of that with the fact that homes across the country have not been built fast enough to meet demand and you have our current real estate market.

Buying down the shore never ever makes financial sense. The ROI is like 4% cash flow maybe 5 but the appreciation keeps happening and if it makes you happy then do it OP. You only live once.

I don’t see how major cities like NYC survive if WFH is the new norm and folks continue to flock to the burbs and vacation destinations. Once that tax base is gone and vacancies rise it will be hard to fix it. Same goes for colleges that are looking at permanent virtual options. This could all end badly.

 

[RutgersUnion]

@newell138 Could you shoot me your daughters info?

We are actually heading down on Monday for the week.

 

[RutgersUnion]

I don’t see how major cities like NYC survive if WFH is the new norm and folks continue to flock to the burbs and vacation destinations. Once that tax base is gone and vacancies rise it will be hard to fix it. Same goes for colleges that are looking at permanent virtual options. This could all end badly.

We live on UES and although a lot of people have left they haven't actually sold their places here. A good amount of people went to Long Branch but keep saying they plan to move back and keep those places as summer homes.

 

[e5fdny]

Visitor, yeah, so what? I think you are getting confused.

Shoobies mainly go to WW, not Seven Mile Island.

Anyone who comes for a visit…daily, weekly or the whole season fits the description.

Sorry, those are the rules. 🤷‍♂️

 

[mdk01]

We live on UES and although a lot of people have left they haven't actually sold their places here. A good amount of people went to Long Branch but keep saying they plan to move back and keep those places as summer homes.

When they get taxed as NYC residents, even in '21, that might change

 

[T2Kplus20]

Anyone who comes for a visit…daily, weekly or the whole season fits the description.

Sorry, those are the rules. 🤷‍♂️

Sorry, once again I think you are confused. Please reread the posts.