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Experts: Jersey Shore property values will return despite massive hurricane damage

homeloans030411_optBY JANE WOODRUFF
NEWJERSEYNEWSROOM.COM

The Jersey shore is facing a long and expensive recovery process. Homes, businesses and, in many places, the boardwalk itself have been destroyed by Sandy. Those looking to rebuild need to collect money from insurance, or from FEMA, or both. Even if they can get the money quickly, simply rebuilding is not so easy.

Because the storm came so late in the season, the onslaught of winter may prevent building for several months. Contractors and supplies will be in high demand and may become scarce. Homes will need to be built better than before, to comply with updated building codes. As reported in The Record, the iconic Star Jet roller coaster is still sitting, mostly intact, in the ocean off Seaside Heights. No one has tackled the question of how to remove it.

Given all this, will home prices decline at the shore? Most real estate professionals, and the experience of shore communities after other hurricanes, say no.

Scott Leggat, vice president of Outer Beaches Realty in Hatteras Island, North Carolina, told Businessweek.com, “Then the bargain hunters will come and create activity. Within about 12 months, you’ll find activity has returned to a natural level.” Hatteras was damaged by 2003’s Hurricane Isabel, which led to more than $400 million in insurance settlements.

Of course, the economy was better in those years, and no one knows how this economy will affect the shore home value. Nonetheless, the beaches close proximity to so many highly populated areas mean that bargain hunters will return eventually and want to buy.

In fact, sellers of homes in areas of the shore that went largely undamaged are actually raising their prices. And homes further inland may see a rise in their property value as well.

The Jersey shore brings in about a third of New Jersey’s $35 billion a year tourist industry. That is a powerful motivator to rebuild, both for businesses and for the state government. The reality is that there will always be people who are willing to own oceanfront property no matter what the risk. And as the hurricane ravaged sites of Charleston, South Carolina, Galveston, Texas, and Hatteras, North Carolina demonstrate, people always come back to the beach.

 

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