Hurricane Sandy may have hit in October, but the property damage it left in its wake is still wreaking havoc on the New Jersey coastline, especially when it comes to the upcoming summer-rental season.
Typically by April about half of those looking for summer Jersey Shore rentals have already signed leases, brokers said. But this year’s crop of rentals is much smaller than usual, due to the large number of homes damaged by the storm. In hard-hit towns struggling to rebuild their beaches and boardwalks, brokers said, demand has waned and owners are dropping prices to lock in any tenant who shows an interest. By contrast, towns that were largely spared by Sandy are seeing more activity and higher-than-usual prices.
“There has been a significant impact on the rental inventory” as a result of Hurricane Sandy, said Mary Cericola, an agent at Crossroads Realty in Lavallette.
Overall inventory of Jersey Shore rental homes is down about 20 percent this year, estimated Chris Kirk, founder of the online rental exchange ShoreSummerRentals.com. The shortage is especially acute in northern Ocean County, from Seaside Park up to Point Pleasant Beach, he said.
Kirk said some of his longtime clients cannot rent their homes this summer because they’re still dealing with storm damage. “Some have said their house has been destroyed,” he said.
The situation is particularly grim in certain towns. Kirk said data from his site shows that inventory is off 58 percent from last year in Ortley Beach, 32 percent in Point Pleasant Beach, 30 percent in Seaside Heights, 26 percent in Lavallette and 24 percent in Seaside Park.
Owners renting out their homes in these hard-hit towns have dropped their asking rents about 25 percent from last year’s levels, he said.
“There are more deals,” Kirk said. “Long Beach Island and the ones that are open in northern Ocean County are offering more discounts for people to entice them.”
Property owners are worried about the impact of the storm on the summer season, said Greg Russo, senior vice president of Ironstate Development Company, the developer of Pier Village rental complex in Monmouth County’s Long Branch.
“With all the devastation at the Shore, some people might stay close to home this summer, or they won’t have the disposable income,” he said.
Indeed, some renters are avoiding the Jersey Shore this summer, choosing instead to rent in areas like the Hamptons.
“I have seen leases being done for people from New Jersey who are coming from areas where they can’t go [this summer],” said Ernie Cervi, a Corcoran Group broker in Bridgehampton.
In the face of these challenges, owners, including many who had to reach into their own pockets to pay for post-Sandy property fixes, “know [their] best bet is to just get it rented for the season,” said Susan O’Brien, an agent at Diane Turton Realtors in Sea Girt.
But even with the lower prices, many properties have yet to be claimed, Kirk said, though he’s hoping to see a boost later this spring.
“A lot of people are hesitant to go down the Shore,” he said. “I think they fear their vacation is going to be hindered. But they’ll come down once they see it’s up and running.”
Crossroads’ Cericola, too, is hoping things will improve as summer draws closer, especially since many towns are working around the clock to repair homes and infrastructure in time for the season.
“We anticipated a late start due to the storm,” she said, “and we are waiting for some properties to be repaired and made ready.” She added: “Everyone is working tirelessly to prepare for our summer season.”
When it comes to rental rates, Cericola said, right now along the strip from Seaside Park to Point Pleasant Beach, oceanfront homes are asking $4,200 to $15,000 per week for summertime rentals. Non-beachfront houses are asking from $2,300 to $5,000 per week depending on the number of bedrooms, she said, while smaller cottages with only two bedrooms are listed for $800 to $1,500 per week.
On the sales side, O’Brien said New Jersey, like the rest of the nation, had been undergoing a housing rebirth since the market bottomed. Sandy, however, stopped the recovery in its tracks in many beach towns. In fact, Diane Turton offices in Beach Haven, Lavallette and Bay Head were severely damaged during Sandy and are still in the process of being repaired, with agents working from other Diane Turton locations in the area.
The rental and sales markets in towns like Seaside Heights, Sea Bright, Mantoloking, Ortley Beach and Point Pleasant Beach all have a long path back to health, O’Brien said.
Seaside Heights in particular — where a roller coaster famously plunged off a pier during Sandy, coming to rest in the ocean — “got hit harder than other towns,” said O’Brien. “It’s going to take a long time for them.” Crews are now reportedly working overtime to rebuild the town’s mile-long boardwalk in time for Memorial Day.
While the damage from the storm might be painful for some, it’s proving to be a promising opportunity for others. High-end real estate markets in Spring Lake and Sea Girt were mostly spared by Sandy, and O’Brien said those two towns are seeing a significant spike in rental and sales activity, since there are fewer options for buyers and renters in the neighboring towns.
Some homeowners in those areas “are going with higher prices this year,” O’Brien said.
And some areas are already on their feet. For example, Long Branch now has much of its core infrastructure back to normal, after completing minor repairs to its boardwalk.
Ironstate’s Russo said Pier Village — a mostly year-round residence, with about a dozen apartments rented for the summer season each year — was without power for about a week after the storm, slowing rental activity for 2012’s fourth quarter. “There’s no question that the storm affected our rentals,” he said.
But activity there picked up early this year, he said, and rental rates are now similar to last year at this time.