OCEAN CITY, NJ REAL ESTATE MARKET CYCLE
Ocean City has two major selling seasons within the year occurring cyclically in the Spring and Fall.
As the weather warms in the Spring, anticipation of the summer is at it’s highest peak and demand for Ocean City property spikes as consumers scramble to secure their summer home. During this time investors looking to purchase rental properties can expect to generate two incomes in the first fiscal year: The money in place for the upcoming rental season and the incoming deposits the following year for the next season.
Typically things start to rock around February as contracts roll in, demand usually runs full force till the end of June.
The buying power slows during the summer as the city populates with tenants and tourists. Inventory tends to drop as sellers who haven’t sold in the Spring usually de-list to use the property themselves or collect their rental income with the intention of re-listing in the Fall. Overall people are mainly concerned with enjoying their vacation and downtime (hard to blame them in the best shore town in America!!).
In September, our secondary Fall market heats up and lasts till the holidays. A large portion of these buyers are new impulse buyers fresh off the beach filled with Ocean City fever, current owners looking to upgrade or downgrade, or investors looking to find a desperate seller who’s unable to carry the property for another year once the rental income has dried.
A solid year consists of 900-1,000 units sold with the peak selling months typically occurring in May-June during the Spring, and September-October during the Fall. There’s never one point where the market is completely dead, so if you’re someone who is pressured to sell and priced competitively, you should generate some level of activity any month of the year.
Some of the largest sales in Ocean City have taken place during the slowest time in the market and that’s what’s so thrilling about real estate: As much statistical information you study, you just can’t predict what will happen.
For a buyer, here’s the most important concept to grasp: There are many smaller niche markets within Ocean City’s general market. It almost seems like every block (such as Asbury, Central, Wesley, etc) is it’s own unique sector. People always ask, “How’s the real estate market in Ocean City?” And our response is always the same, “Which one?”
For instance, the Gold Coast beachfront market is not the same as the south end beachfront market. The lot sizes in the Gold Coast are larger, more beachfront owners have littoral rights to the coast line and in general the Gold Coast is branded by many to be the most opulent location on the island. Just because you’re beachfront, even with a similar lot size, does not mean the values are the same on every street. Some streets have a lower elevation than others and more prone to flooding, which affects the value. Some areas have a higher dune structure narrowing the ocean view, etcetera, etcetera …
There are dozens of niche markets within our general market and it’s critical to examine and know the differences.