When Hurricane Sandy roared through New Jersey two years ago, it not only tore up the shoreline. It also pushed out much of the middle class.
From Ocean City to Toms River, one-story cottages and bungalows damaged by the worst Atlantic storm on record are being replaced by multi-story homes that go for twice as much. Sales of million-dollar homes on the Jersey Shore surged to a seven-year high in the third quarter.
Sandy accelerated the turnover of existing homes to higher-priced ones, said Kevin Gillen, an economist at University of Pennsylvania’s Fels Institute of Government. Meanwhile, those relying on insurance claims and government grants are sometimes unable to rebuild as quickly as their wealthier neighbors.
“What we see right now along the water is that the people with resources, people who have a lot of money, right off the bat, they’re back in their houses enjoying it versus a lot of other people who are still struggling,” said Doug Quinn, who remains displaced from his Sandy-flooded home in Toms River, about 70 miles (113 kilometers) south of New York City.
The outperformance of the rich on the Jersey Shore mirrors national trends since the recession ended in 2009, Gillen said. Between 2010 and 2013, median incomes fell for all Americans but the richest, a September Federal Reserve report showed.
“This overall economic recovery has been skewed to the upper half of the population,” Gillen said. “The more educated you are, the more accomplishments you have on your resume, the chances are you are better off today than you were a couple years ago in the depths of the recession.”
While multi-million dollar communities dot New Jersey’s Atlantic oceanfront, blue-collar workers have vacationed on its beaches and sailed along its inlets for generations. In the 1970s, New Jersey native Bruce Springsteen sang of wooing factory girls under the Asbury Park boardwalk.
Often, people inherited bungalows and other modest Shore homes dating to World War II, said Toms River Mayor Thomas Kelaher. No one’s building those anymore, he said.
Ninety-nine homes sold for more than $1 million in Atlantic and Cape May counties in the third quarter, the most since the same period in 2007, at the height of the housing bubble, according to Zillow (Z:US) Inc., the Seattle-based real-estate website.