The fire was called in at 7:45 a.m. for an unoccupied home on Pelican Drive South and quickly spread to a second home on Sea Gull Drive, officials said. The fire went to two alarms a short time later, with smoke visible for miles.
"It looks like two homes on the west side of town are totally destroyed," said Scott J. Wahl, Avalon Borough spokesman. Wahl said an occupant of the Sea Gull Drive home called in the fire and were able to evacuate safely with an infant.
There are no reports of injuries. Avalon firefighters were assisted by multiple other crews including those from Stone Harbor, Rio Grande, Marmora, Green Creek, Goshen, Cape May Court House, Ocean View, and Seaville, Wahl said.
Wahl said fire crews were still putting out hot spots and do not yet have a cause for the blaze.
"The investigation will begin when the fire is out," he said.
The two homes each have an assessed value of more than $2.5 million, according to public records.
At 9:30 a.m., flames could still be seen as crews continued to pour water onto the homes, both of which appear to have significant damage.
The two multimillion dollar homes set on the bay were located on separate streets and adjacent to each other. The fire started at the unoccupied home on Pelican Drive and spread to the home on Sea Gull Drive, NJ.com reported.