The cheaper alternative to summering in the Hamptons is becoming even more economical.
The credit crunch has slashed prices on the Jersey Shore, offering buyers and renters — some of whom are deserting the Hamptons — the best deals in years.
Significant price drops can be found up and down the northern and central Jersey coast — not only in shore towns such as Asbury Park, which saw a building blitz when the economy was peaking after a period of struggle, but also in wealthy enclaves that until recently were widely considered bulletproof.
Though few properties are trading in desirable beach towns such as Bay Head and Mantoloking — both known for their shingle-style homes reminiscent of Nantucket — and Spring Lake, which boasts block after block of Victorian-era mansions with wrap-around porches — brokers say a smattering of deals illustrate that there are opportunities to be had.
“The bargains are better now than I’ve seen in 20 years,” said Jackie Kennedy, a veteran sales associate with Diane Turton Realtors, which has 16 offices on the Jersey Shore. “You couldn’t get a property in Spring Lake for under $1 million that was worth anything going back three or four years. You’re now seeing nice homes trade for $650,000.”
The slide in Spring Lake prices pertains to luxury properties as well. Kennedy said one oceanfront home, which was originally listed for $10.9 million, is now on the market for just under $7 million.
And in Mantoloking, only a short drive south, the story is much the same. For example, one beachfront property recently sold for $3.76 million. “It was unheard of for similar oceanfront properties to sell for under $5 million a few years ago,” said Diane Mayer Cornell, a realtor associate with Van Scyver Realtors. “I think it’s an incredible bargain.”
But even as deals have become more readily available, the volume of sales in wealthy Jersey Shore towns has continued to drop since the onset of the recession, several brokers said.
In Bay Head and Mantoloking, only five properties closed between January 1 and June 1, compared to nine during the same period last year, and 21 in 2007, according to statistics provided by Van Scyver Realtors.
While the Jersey Shore is often scoffed at by those who frequent the Hamptons, which is decidedly more expensive, some are trading their drives on the Long Island Expressway or rides on the Long Island Railroad for trips down the Garden State Parkway.
This summer, Matthew Foy, an investment banker from England who has lived in Manhattan for the last five years, has swapped his rental in Wainscott in the Hamptons for a house in Spring Lake Heights on the Jersey Shore.
For $6,000, Foy is getting rights to the master bedroom of a large share for the entire summer, in a house that is roughly six blocks from the beach. Last year in Wainscott, he paid $8,000 for six weekends in a smaller room in a house significantly farther from the beach. While his Hamptons house had a pool, Foy said the proximity to the beach and large backyard of the Jersey Shore house makes for a wash.
“You get a whole lot of house for your dollar at the Jersey Shore,” Foy said.
But it’s not solely the economy that triggered Foy’s decision, he said.
“I got tired of spending three and a half hours on a bus on Friday and Sunday,” he said, pointing out that on Friday afternoons an express bus gets him to the Jersey Shore in about an hour and 20 minutes.
“On the Jersey Shore, I find you wake up and spend most of the time on the beach instead of at brunch. It’s more of a beach community than the Hamptons.”
Some brokers said the unsteady economy is not only prompting young professionals to pick New Jersey over Long Island, but noted that others are making the switch, too, in an attempt to get a better deal.
Richard Carroll, a sales associate with HCH Sotheby’s International Realty on Long Beach Island, said a growing number of his clients, especially families, are now choosing Jersey over the Hamptons because of the price. While Hamptons’ defectors are not the norm, there are families that previously shared rentals in the Hamptons who are now renting by themselves on Long Beach Island because of the down economy, he said.
“A lot of those folks rented with another family, where you have one side of the group have a situation come up and they can’t afford it anymore,” he said.
Despite the greater number of people looking for rental deals in New Jersey, many Jersey Shore brokers say that unlike property values, summer rental prices haven’t dipped significantly from the top of the market.
Instead, landlords have become increasingly flexible in order to attract tenants. In the past landlords would often have required tenants to rent a property for the entire summer; however, now they are willing to settle for monthly or even weekly rentals, brokers said.
And some are offering tenants perks to sweeten the deal. “Owners will buy beach badges for renters. Instead of utilities being $300, they’ll give a reduction,” said Van Scyver Realtors’ Cornell.
Several brokers described the starkest phenomenon of the 2009 summer rental market as just how late it started.
“People didn’t start renting until later,” said Jacob Smith, who represents a majority of the rental properties for Ward Wight Sotheby’s International in Belmar. “Some are savvy and they know the prices are lower closer to the summer. At that point they have leverage over the owners … others were just more fickle about renting,” he said.
And while Smith said that prices haven’t dropped significantly compared to last year, more owners were willing to negotiate lower prices in order to secure “safe” renters, which underscores Belmar’s ongoing shift away from its long-time identity as a raucous beach destination.
Meanwhile, during the boom, a number of developers set their sights on building condos near the beach in once-depressed towns like Asbury Park and Long Branch. While a handful of developments were completed in Asbury Park over the last few years, symbols of the credit crunch linger in the form of vacant lots ubiquitously scattered along the small city’s oceanfront.
For the developments that were completed, though they’re slowly attracting buyers and renters (many of whom are from New York City), prices have dipped noticeably, brokers said.
“In general, sale prices of condos at new developments in Asbury Park have dropped by about 15 percent,” said Michael Brim, an associate with Gloria Nilson GMAC Realty.