From the NYT:
JOEL NAROFF, an economist who last year won a prize from the National Association for Business Economics as the country’s most accurate forecaster, found his prediction skills wanting four years ago when it came time to buy his own vacation house at the Jersey Shore.
“I was hoping we had gotten a good portion of the decline behind us and I was ready to make the move,” said Mr. Naroff, speaking of the house he bought in Margate in 2008 not long before Lehman Brothers crashed. The market had indeed skidded by then — but not anywhere near as much as it was about to. “I made what I thought was a reasonably low offer, but clearly we had not hit the bottom yet.”
Today, however, as the president of Naroff Economic Advisors of Holland, Pa., Mr. Naroff says he is confident that the market has truly bottomed out. And based on a recent flurry of activity at the Jersey Shore, he is hoping that he and his neighbors can start to turn the page on losses suffered these last few years.
“What we’re seeing now are very reasonable prices for expensive homes,” Mr. Naroff said. “The high-end real estate has come down to where people are getting back into it. The one-percenters have the money, and they’re seeing there are good deals out there.”
A few trouble spots aside, brokers up and down the shore seem to agree with Mr. Naroff. Randy Leiser, a sales representative with Avalon Real Estate, said the first quarter had been his agency’s strongest since 2006, with 97 new contracts so far this year, versus 75 in the first quarter of 2011 and 55 in the first quarter of 2010. Lee Childers, a broker-owner of Childers Sotheby’s International Realty, said the first quarter of 2012 had been very active for his office as well, but most activity was taking place in lower to middle price range.
“We’re still experiencing some drifting downward, particularly in the upper end,” Mr. Childers said. “There’s still plenty of seven-figure stuff sitting on the market.” He estimated overall prices at the shore in northern Ocean County were down 5 percent since last year, and 20 to 30 percent since the peak.
eal estate activity has picked up, if a little less robustly at the shore than the rest of the state as a whole, according to Jeffrey Otteau, the president of the Otteau Valuation Group. Statewide, first-quarter sales were up 25 percent over last year’s; looking at the shore separately, activity increased by only 15 percent, Mr. Otteau reported.
But it is another story for prices. Overall pricing at the shore was down by 3.5 percent in March, as compared with March 2011. The picture is even less positive for the southern shore, where Mr. Otteau said prices were down 6.1 percent. In towns from Long Beach Island northward, the decline is more like 1 percent.
Kevin Gillen, an economist with the Econsult Corporation of Philadelphia who studies real estate trends in the Philadelphia area and the southern Jersey Shore, said overall shore values were down by 30 percent from their height in the mid-2000s, and closer to 50 percent in Atlantic City. The latter, a year-round market as well as a vacation destination, has seen a severe drop in gambling activity since casinos opened in Pennsylvania. That decline in turn has hurt the housing market, Mr. Gillen said.
Another urban shore community that has suffered greatly since the downturn has been Asbury Park, whose market has been “decimated,” according to Gerald Scarano of Exit Realty. He said houses had lost 30 to 50 percent of their value since the heyday of the early 2000s, when gay New Yorkers discovered the city as a hip alternative to Fire Island and the Hamptons.
“The Good Ship Lollipop is stuck on a sandbar,” said Mr. Scarano, an investor turned broker who once earned tidy profits buying, renovating and selling homes in Asbury Park. As evidence of the continued weakening, he cited a 2,064-square-foot Dutch colonial in the desirable Deal Lake area that was listed six years ago at $775,000 and finally sold in March for $520,000. Nearby, a Victorian sold for $349,000 in late April, having started out at $469,000 last fall.
Mr. Naroff says he doesn’t like to think about how much value his Margate home has lost, noting that such speculation is fruitless anyway. “It’s not a loss,” he said, “if I don’t have to sell.”