After nearly six months of work replacing the floors, walls, kitchen cabinets, upstairs carpets, furniture, appliances and hot-water heater, Harry Sweeney was finally ready to list his three-bedroom, two-story ranch house in Ortley Beach for rent this summer. The question remained, would anyone take the bait?
Beach access is expected to be restored for summer in this Shore community devastated by Hurricane Sandy, but the boardwalk, marina, pavilions and other facilities remain in disrepair. And while Sweeney’s house is again habitable, many of the homes around it are not. Indeed, several of them were washed away.
“The four houses that were on the beach are gone,” says Sweeney, describing the end of his block. “Then you have one that’s been turned around, and another where it’s just the top story sitting on the ground. You have three others that crashed into each other, like a car pileup…. To be perfectly honest, I wouldn’t rent my house.”
Few Shore towns took a worse hit last October than Ortley Beach—a section of Toms River. The normally robust summer rental market there will be nearly nonexistent this year. The same applies to Normandy Beach, Ocean Beach, Mantoloking, Holgate and parts of Bay Head, Seaside Heights and Lavallette—all in Ocean County. But in other Shore towns, homeowners, building contractors and real estate agencies have been working hard to get their rental properties ready for what promises to be a season of uncertainty.
“Some people are renting, but others are saying they’re going to wait this summer out and return when things are back to normal,” says Ginny Donnelly of Donnelly Real Estate in Bay Head. “In time it will all come back, but this summer might be a little different.”
Although the dynamic of the Shore rental market is different this year, the impact on rental pricing has been minimal. Real estate agents handling hot properties in Shore towns less affected by the storm, such as those in southern New Jersey, are advising clients not to raise rates. At the same time, landlords in storm-battered towns where the rental market has been slow seem reluctant to cut their prices. All that could change, of course, as the calendar clicks closer to high season.
Anyone taking a drive early this spring on Route 35 between Point Pleasant Beach and Seaside Park could witness the lingering evidence of the hurricane’s assault. Houses with exterior walls torn away and the skeletal remains of the Jet Star roller coaster off the beach in Seaside Heights brought out scores of what Jeff Childers of Childers Sotheby’s International Realty in Lavallette calls “destruction gawkers.” While the curious might spend a few dollars passing through, Childers says they don’t do much for the summer rental market, a central component of the state’s $40 billion tourism industry.
Diane Turton’s Lavallette real estate office, which was shut down for 5½ months due to hurricane damage, typically handles more than 600 summer rental leases on 300 different properties. This summer, says sales agent Pam Maguire, they have less than 100 houses in their rental inventory and had signed only 40 leases by mid-April. “We had a number of clients who had put commitments down on units,” she says. “Then over Easter week they took a ride around to see what it was like and called up and cancelled their rentals.”
Agents down the coast in Atlantic and Cape May counties, which were spared the worst destruction, say they’ve seen an uptick in interest from people who typically rent farther north, in Monmouth or Ocean counties.
“The phone is ringing off the hook,” says Lisa Ransom, a sales agent with Atlantis Realty in Wildwood Crest. “People who aren’t too familiar with our area are trying to figure out the difference between one town and the next, to find something that’s similar to what they’re used to renting.”
But Ransom says not every call has led to a booking. The media prediction of a great southward migration of renters has not come to pass.
“Things are shaping up nicely, but we’re not seeing this big influx of people who used to go up north coming down here,” says Allan Dechert, broker and co-owner of Ferguson Dechert Real Estate in Avalon. He adds that his office lost none of its inventory of 1,000 rental properties in the Avalon-Stone Harbor area.
Although the overall supply of rental-ready Shore properties is down, Dechert, the former president of the New Jersey Association of Realtors, says he and other realtors are discouraging homeowners from hiking their rates. Gouging would-be renters, says Dechert, “would make a bad impression.”
In Spring Lake, where the stock of large beachfront rentals largely escaped the devastation of similar properties in nearby Bay Head and Mantoloking, George D’Amico of D’Amico &McConnell Realtors says prices are stable. “We’re not seeing any appreciable increase,” he says. “I don’t see any sense in saying, ‘Let’s stick it to people.’ I mean, if you’re already getting $10,000 a week, how much higher can you go?”
Elsewhere, realtors say some homeowners are raising rents slightly to help cover the cost of repairs or in anticipation of vacant weeks this summer. In Lavallette, Maguire says some owners are raising rates for new renters only—perhaps as much as $100 per week. But Maguire does not anticipate any bargains. “I haven’t seen anyone offering to lower their rates to generate business,” she says.
Laurie Tighe, who owns a three-bedroom bungalow near the beach in Point Pleasant Beach, says she does not intend to lower her summer rate of $1,950 a week because “that wouldn’t be fair to the others who have already booked.” Tighe says she is normally booked solid by April. This year, she still had five prime weeks available in late April. She thinks Point Pleasant, which was able to tidy up quickly after Sandy, might have been helped if more day-trippers had driven through in spring to see the progress.
The sentiment is similar on Long Beach Island. Rentals at the Oceanside Realty office in Surf City were running about 25 percent behind last year’s pace by mid-April, according to sales agent Bretton Lutz, even though most of the barrier island fared well in the hurricane.
“People don’t realize what good shape the island is in,” he says. “I tell them to come on down and see for yourself. And once they do, they say, ‘It looks normal.’”
Bill Bonner has been renting out his wood-shingled, three-bedroom house in Barnegat Light at the northern end of LBI for most of the 45 years he’s owned it. With five prime summer weeks still available in late April, he says 2013 has been his toughest rental season yet. On top of that, he was hit with a $1,000 increase in his flood insurance premium. Given the increased expense and the possibility of vacant weeks, Bonner reduced his summer rate from $5,000 to $4,800 per week, but is reluctant to go any lower. But if things get tougher, he acknowledges, “anything’s possible.”
“I think it’s a shame,” he says. “Everybody that did have a problem has been working very hard to get their places back into shape. If you drove through here now, you wouldn’t even know anything had happened.”
Looking ahead, Lutz sees a silver lining for homeowners who have received compensation for storm damage. “People may have had plans to do some improvements on their houses, and this just accelerated it,” he says. “By next year, you’re going to really have some nice properties available to rent.”
Jill P. Capuzzo writes frequently about real estate for New Jersey Monthly.
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