From the Record:
Superstorm Sandy sent 18 inches of water rushing in to Bob Zirkel’s Ortley Beach home, causing thousands of dollars in damage.
But bad as the storm was for Ortley Beach — one of the hardest-hit areas on the Shore — it also opened up an opportunity for Zirkel, a construction superintendent who lives in Rockaway. Just seven months after the storm, he spent $250,000 to trade up, buying a badly damaged house near the ocean. Now he’s building his family’s new beach getaway on the site, on the border of Ortley Beach and Lavallette.
“I got an incredible bargain,” Zirkel, 53, said of the property, which was assessed at more than $600,000 as recently as 2011.
Almost two years after Sandy devastated parts of the Shore, damaged properties are changing hands, as some owners decide they can’t afford to rebuild, and buyers look for a place to create their own summer memories. Many badly damaged properties have been torn down, leaving empty lots — which had been a rare commodity at the beach.
“There’s a lot going on. The market is really rebounding,” said Eric Birchler of Birchler Real Estate, which has offices in Ortley Beach and other towns on the narrow barrier island that stretches from Point Pleasant Beach to Island Beach State Park. “They’re buying the dirt and they’re knocking the house down, and they’re building their beach house.”
In Ortley Beach, prices have moved up from the bargain-basement levels seen in the year after the October 2012 storm. But they’re still down significantly — depending on whom you ask, by 20 percent or so.
“You didn’t have to be really wealthy to live here in Ortley Beach,” said Tim O’Shea, a real estate agent with Birchler, who has an Ortley Beach house that was badly damaged and is still being repaired. “A lot of homes passed down through the generations. If you scraped together $3,500 to $4,000 in taxes, you could come down on Memorial Day and stay till Labor Day.”
But many of these homeowners didn’t have flood insurance, and once the storm hit, they were faced with enormous costs to repair and, in many cases, elevate the homes. Elevating a home costs from $80,000 to $100,000, once all the expenses are factored in, said Lee Childers of Childers Sotheby’s International Realty, which has six offices in Ocean County, most on the barrier island. The federal flood insurance program reimburses a maximum of $30,000 for elevating a home.
And there’s no government disaster aid for owners of second homes.
As a result, for many owners, “there was really no way out but to sell, probably at a price below what they’d get if they’d been able to hold on,” said Peter Reinhart of the Kislak Institute for Real Estate at Monmouth University.
Childers said that property values haven’t dropped far enough, post-Sandy, to make a speculative investment worth the risk. In fact, he has built spec homes himself in the past, but he’s not tempted now.
“I would be doing it if there was money to be made,” he said.
Reinhart said the steepest real estate discounts are in the past. “The really good deals were scarfed up in the first six months after the storm,” he said.
Even farther north, in the middle-income Monmouth County towns of Highland and Union Beach, small, damaged houses can be bought for less than $100,000. Many of these listings on the Monmouth County Multiple Listing Service carry warnings like these: “Value is in the land. House is sold as-is. Home damaged by Sandy.”
“This is your opportunity to help restore the Shore,” says one listing for a storm-damaged, $99,000 Cape Cod in Highlands.
The rebuilding is likely to change the character of some towns, as affordable cottages are replaced by taller, more expensive homes.
“The fabric of the Shore is going to change, because many blue-collar families have been unable to hold onto their properties,” Reinhart said.