New Jersey shore towns are busy re-building and getting ready for the summer. While many hopeful buyers are dreaming that this may be their single chance of owning a beach home after the devastation of Hurricane Sandy.
“I’ve always wanted a shore house,” said Farmingdale, N.J. resident Judith Donofrio. “I grew up renting shore homes in Belmar and would love to own a house that my children can grow up with. Right now might be the best time.”
It may be too soon to know. “Beach homes are still hard to tell right now, “according to Seaside area expert, Realtor Mike Buckley of Realty Executives in Ocean County. “There haven’t been many listings since the storm. Many people are still waiting for their insurance money.”
Insurance money or lack thereof, seems to be the driving force for homeowners deciding whether to sell or not to sell. “Talking to my clients, everything seems to be on hold right now. Most homes in Seaside Heights were flooded. They were gutted and are waiting for insurance money to fix their places,” Buckley said.
Interestingly, home prices in New Jersey rose 2.9 percent in the fourth quarter of 2012, according to Jeffrey Otteau, in the New Jersey Real Estate Report, posted online on February 16, 2013.
In fact, Realtor Audrey Callahan of Coldwell Banker in Howell, N.J. concurs with Otteau’s report. “2012 ended with a bang and the spring market has sprung early this year. It’s a seller’s market all over again.” Callahan, who has specialized in Monmouth County for the past 22 years added, “We’ve been seeing a definite market rebound. Sales are on the uptick, buyer confidence is back, competitive bidding wars are on and values are trending up again. In fact, I am getting many calls for buyers looking to invest in a beach house. “
“The problem is there’s still too much uncertainty with insurance, federal aid, and town elevation amendments, that a seemingly good buy, may not be. Time will tell.” But time can also be the enemy, especially with the proposed zoning changes from the Federal Emergency Management Agency (FEMA).
A recent online article from The Belmar-Manasquan Patch, by Edward Van Embden, “Gearing Up for a FEMA Fight,” focuses on a Jersey Shore resident, George Kasimos, who, along with neighbors and shore residents, are forming a grassroots organization called “Stop FEMA Now”.
Van Embden wrote, “A Toms River resident, Kasimos said his home suffered flood damage during Hurricane Sandy. Tasked with rebuilding after the storm, Kasimos said he’s had to delay progress after learning that his property has been rezoned. Previously in the A Zone, Kasimos’s property is now listed in the V Zone.”
The article goes on to say, “Should he fail to elevate his home, he, like other residents who now find themselves in V Zones, or, for the first time, in the also flood-prone A Zone, Kasimos would conceivably be on the hook for flood insurance premiums in the area of thousands of dollars annually.”
I contacted FEMA regarding the new zone and elevation changes. They responded by email. “The State of New Jersey and FEMA has released Advisory Base Flood Elevation (ABFE) maps for coastal counties. ABFE maps are digital renderings of flood hazard maps that provide an updated depiction of flood hazards. To access the new maps, visit region2coastal.com and click on the Hurricane Sandy tab.”
The website is a useful guide in learning about FEMA regulations, insurance, and has an interactive map that allows you to locate your property and the proposed zone.
The new zones would mean raising a home’s elevation that has suffered substantial damage. If the homeowner chooses not to comply with the new regulations, then the hefty increase in the cost of flood insurance could possibly force many owners to sell.
It’s important to note, not everyone has to elevate their homes, even if zones have changed and elevation requirements have changed. According to FEMA, if a home was not substantially damaged, then no action is needed at this time. Substantial damage is defined as a structure where the cost of restoration is equal or exceeds 50 percent of the market value of the structure prior to the damage.
“The outcome of the rezoning can be a game changer for shore real estate,” said Callahan. “Buyers and sellers are waiting to hear of the required changes. Sellers will have to reduce their sale prices so that a buyer can make the necessary elevation requirements.”
Shore buyer hopeful Donofrio added, “Time will tell if I buy. With all the uncertainty, I don’t want to get into a bad situation. The dream will be put on hold.”