Monday, February 06, 2006

Shore Housing Boom

Northjersey.com has a number of relevant articles today.

This article describes the housing boom along the Jersey Shore. Although I think most of the Shore is due for a housing price correction, a couple of areas look especially susceptible to a downturn in values. I think the LBI could fall pretty hard and fast since most of those houses are second homes or were purchased with the intention of renting them out over the summer. Second homes are going to be sold a lot more quickly than primary residences when the ARMs on those places reset at higher rates. Houses on LBI that were bought with the intention of collecting rent from summer vacationers, I have a feeling, are going to sold en masse starting this summer. Given some of the prices paid for houses in LBI in the past three years, it is hard to believe that a landlord could charge enough over a summer to cover the cost of a mortgage, let alone make a profit.

“LONG BRANCH -- The giant claw of the earth mover chomped at the whitewashed side of what used to be the Fountain Motel, opening a gaping hole.

Within hours on a late December morning, the Long Branch beachfront motel that had degenerated from an oasis for generations of summer tourists into a flophouse had been transformed into piles of cinder blocks, wires and pipes.

Shortly, they too were gone, leaving an open field on which several dozen shiny new condominiums each costing a half-million dollars or more will be built.

Such is the real estate market on the Jersey Shore. From Cape May to Sea Bright, construction is turning communities of vacation bungalows and rental units that sat idle for much of the year into mansions, condominiums and town houses.”

More…

1 Comments:

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Thursday, April 27, 2006 8:23:00 AM  

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