Wall Street Money and the Shore

Maybe I’m wrong, but I have always thought that Wall Street money provides the liquidity for the Jersey Shore real estate market. When things are going good on the Street, you definitely see a lot of new construction in the area, especially along Ocean Avenue from Sea Bright all of the way to Spring Lake. It might be too early to notice, but I can’t help but think that many on Wall Street are not having the best year so far and that the second half of 2004 wasn’t so great either. For one, stock market volatility has been weak, which suggests not a lot of equity trades are getting done. Additionally, IPO and new bond issue markets have also been weak, which means a lot of investment bankers are probably sitting around doing nothing. Finally hedge fund performance has been particularly bad in recent months.

[“Hedge funds declined 1.75 percent in April, the worst monthly performance since September 2002, according to Hennessee Group LLC, a New York-based consulting firm that tracks industry returns…”]

Aside from all of the other reasons why I think Jersey shore real estate is over-valued, and because Wall Street is not having a banner year, and since I think a lot of Shore real estate depends on the fortunes of real estate, I would be surprised if house prices do not level out in the near term.