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Beach home sales at the Jersey Shore are surging during the coronavirus outbreak

A good read By KATIE PARK, in The Morning Call.

For some employees given the option of working from home during the coronavirus pandemic, the workplace expanded from the city office to the beachfront condominium.
A picturesque scenario. If a Shore house is even available.
Sales are so strong that buyers should “make a very, very strong offer and don’t hesitate. Don’t wait three weeks to come down” to the Shore, said Brenda Connolly, owner of the Connolly Agency, a real estate company in the coastal town of Avon-by-the-Sea in Monmouth County, where a condominium can sell for $375,000 and houses for up to $3 million.

Interest in beach homes, often a second dwelling for wealthy city residents or landlocked suburbanites, has seen a prolific jump in New Jersey during the coronavirus pandemic, with Connolly reporting that sales were up 25% this year compared with the same period last year, an increase she partially attributed to historically low mortgage rates.

Beachfront homes in the Hamptons in New York and Myrtle Beach in South Carolina have enjoyed a similar rise in fortunes.
Normally, Connolly said, up to 30 houses are for sale in Bradley Beach, a Shore town a mile away from Avon-by-the-Sea, where properties come with price tags similar to those in Avon. Just seven were on the market last week.

“People were stuck working out of home in New York City or Hoboken, and they wanted to get outside,” she said, mirroring the observations of other real estate agents farther down the Shore. “We have very low, limited supply, and we’ve got incredibly high demand.”
She noted that many to-be beach house owners had long planned to buy a house at the Shore and that the pandemic — accompanied by a drop in the 30-year fixed mortgage rate to about 3% — accelerated their plans to do so.

Real estate agents in some of New Jersey’s most sought-after coastal havens offered the same advice: Come to the Shore as quickly as possible with mortgage preapprovals and other necessary documents, and be prepared to bid quickly and aggressively.
“They should know if an agent tells them there’s limited supply, they’re not kidding,” said Jerome DiPentino, an agent at Long & Foster in Longport, Atlantic County. “It could literally be gone in one weekend.”

In Ocean County, homes spent a median of 61 days on the market in July this year, compared with 48 days at the same time last year. But for the year to date, houses have currently sat for sale for a median of 62 days, compared with 65 in 2019.
The trend mirrors those in other markets fortunate enough to have experienced growth in real estate sales — including Philadelphia and its suburbs — and signaled to regional real estate agents that even through global economic upheaval, interest in residential high-end properties has not fallen off in certain markets.

Cape May has ranked among the fastest-growing markets for luxury property, according to data released in March by the National Association of Realtors. The beach town clocked in at seventh out of 20, surpassed by Santa Barbara, California; Monterey, California; Eagle, Colorado; Pinellas, Florida; San Luis Obispo, California; and Travis, Texas.
“It’s just been a really wild year,” said Micah Yerk, a broker at Homestead Real Estate in Cape May. “We have more and more people coming to Cape May more than ever because they can’t travel abroad.”

The average sale price of a home in the city with an area just shy of 3 square miles is more than $1 million, Yerk said. Even buyers with budgets of up to $2 million have recently had difficulty finding property.

“We’re getting creative with terms,” he said, in that sellers have accepted bids on the condition that they move out at the end of the beach season so they can spend one last summer before leaving for good. Other buyers have bought houses sight unseen — a practice Yerk saw before the pandemic, but that has increased since then — or gone without an inspection in haste to close on a property.

The supply of houses in Cape May has fallen to a “critically low” level, he said, counting 17 single-family homes for sale last week compared with a typical stock of 50-70.

The circumstances of the market have meant many sellers on the Jersey Shore are getting their asking price, agents said, and sometimes more if their property has multiple competitive offers.

“It is a seller’s market,” said Cheryl Sullivan, a real estate agent who works alongside Connolly at the Connolly Agency in Avon-by-the-Sea. “Sales prices are definitely up, and for cash.”

As beachfront home sales have surged, so has interest in beach vacation rentals, real estate agents said.

Rental inquiries began earlier than normal this year, they said. Data from J.P. Morgan shows there were around 400,000 new bookings for short-term vacation rentals in mid-May in the U.S. They crested in June at around 650,000 bookings.

“The rental demand was the strongest I’ve seen it, ever,” DiPentino said from Longport. “We had hundreds and hundreds of calls for summer rentals, and we had no product. There’s been a run-up or a demand that I haven’t seen in about 30 years since I’ve been doing this in the Longport-Margate market.”

At the same time, “social distancing spending” — which J.P. Morgan defined as U.S. consumers leaving their homes to use credit or debit cards for lodging, retail, theaters and other recreation — decreased compared with 2019, according to the bank’s internal data.

Yet, on New Jersey’s Shore, the sometimes multimillion-dollar pursuit of a home steps from the water has continued to surge.
“Demand has been absorbed by more than half and not necessarily replaced,” DiPentino said. “It’s out of balance.”
(c)2020 The Philadelphia Inquirer
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