Jersey Shore teardowns booming, but not because of Sandy

Ask anyone who lives at the Shore, or frequents it, if people are tearing down old houses and building new, and the answer is an unequivocal yes.

And the current boom in teardown-rebuild activity seems to have little to do with Hurricane Sandy's 2012 swath of destruction.

"In our target area, Barnegat Bay, there are a large number [of teardowns] now. . . . People are either selling to people tearing down and rebuilding, or rebuilding themselves," said John Westrum, president of Westrum Development in Fort Washington, whose company is working on a post-Sandy rebuilding project in Ortley Beach, near Seaside Heights.

Much teardown activity appears to be centered on owner-occupants, not Shore investors.

In Avalon and Stone Harbor, "the question is not, 'Are they doing teardowns at the Shore again?' The question is, 'Are they still doing teardowns at the Shore?' and the answer is, absolutely, yes,' " said Paul Leiser, an agent with Long & Foster Real Estate and a former owner of Avalon Real Estate Agency.

In Avalon alone, Leister said, there were 73 demolition permits in 2013, and "I would estimate there were another 45 to 50 in Stone Harbor, the smaller of the two towns here on our island."

Teardowns and buildings "are going bonkers all over the island," he said, citing three homes under construction at 104th Street and Second Avenue in Stone Harbor.

Nationwide last year, vacation-home sales were up but investor transactions dropped, the National Association of Realtors said.

"Growth in the equity markets has greatly benefited high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property," said the Realtors group's chief economist, Lawrence Yun, who added that price increases are making investments less of a good deal.

State data for 2013 in Cape May County show there were 73 demolition permits in Avalon, 273 in Ocean City, 38 in Stone Harbor, and 65 in Sea Isle City.

In Atlantic County, there were 71 demolition permits in Brigantine, 75 in Margate and 40 in Longport, the data show.

In the same year, 415 residential building permits were recorded in Atlantic County and 683 in Cape May County. A total of 269 units received certificates of occupancy in Atlantic County and 538 in Cape May County.

The overwhelming majority of teardowns and construction permits were in the Shore communities listed above.

New-homes sales numbers for the Atlantic City and Ocean City metropolitan statistical areas, provided by Builderonline.com, paint a slightly different picture, although the data lag from the fourth quarter of 2013.

In the Atlantic City market, the data show, 201 new homes were sold in the 12 months ended in November. For newly sold homes, the average price climbed 18.5 percent year-over-year in December, to $386,358 per unit.

In the Ocean City market, 153 new homes were sold during the 12 months ending in November 2013, and the average price fell 39.1 percent, to $336,755 per unit.

Philadelphia economist Kevin Gillen said it's difficult to identify new construction on teardowns because Shore data are based on the Multiple Listing Service, not on recorded deeds.

"The initial sale of a hurricane-damaged home is not usually done via the MLS, but the subsequent sale of the new home on the same site is on the MLS," Gillen said.

Stephen Booth, of Berkshire Hathaway Home Services Fox & Roach in Ocean City, cited as an example a condo on a teardown site that sold in September for $680,000.

The land on another teardown near the center of Ocean City cost $240,000, but the two units built on it went for $425,000 and $430,000, Booth said.

Main Line real estate broker John Duffy, who has owned a house in Ocean City for years, said "the number of teardowns in the last 12 months is tremendous.

"Builders are buying anything," he said.

215-854-2472 @alheavens