Has Ocean City Real Estate Market Hit The Top?

Hello! Welcome to the first-ever Shore Cribs newsletter— everything you need to know about real estate in Ocean City, New Jersey.

You are receiving this email because you either opted in to receive Walking The Board’s (OCNJ newsletter) real estate newsletter or because you signed up directly with Shore Cribs.

Here’s what you can expect to read about. Ocean City real estate:

• News 📰

• Market Analysis 📈

• Featured Listings 🏠

• Agent Hot Takes 🔥

• Comps 🏘

• Really Cool Beach House Photos 📸

What you won’t get: We’re not trying to sell you a house, or rent you one. While one of our owners is an agent, our goal isn’t to bring you on as a client or refer you to any particular realtor. We want to inform you about everything there is to know about Ocean City real estate— positive and negative! We want to build a large audience of agents, buyers, sellers, renters, and more. We are a media company, not a real estate agency.

With that, let’s dig in to this CRAZY MARKET.

📈 Market Analysis

You see the big ol’ graph in this newsletter?

It doesn't look great.

After pretty much constant year-over-year growth since the start of the pandemic, YoY median sales price decreased in Ocean City in April.

But there is more to the story.

Let's dig in like we're pile-driving a giant windmill into the ocean floor, only with less dead whales.

Nationwide Real Estate Prices Down Sharply

April housing data was released last week, and it contained two headline-grabbing figures:

• national median sale prices were down 1.2% YoY-- the largest drop since - checks notes, squints, wonders what the hell? - January, 2012

• sales volume was down - checks notes, squints, get out an abacus and then wonders what the hell an abacus is - 23.2% YoY

It's been well-publicized that mortgage rates over 6% are incentivizing many would-be sellers to stay put.

Meanwhile, on the buy side, many are waiting to see if rates pull back if and when the FED pauses hikes or cuts rates.

That's how you get sagging sale prices and a dramatic downturn in already-low sales volume.

But what’s that mean for Ocean City?

As we wrote in our Walking The Boards newsletter last week, here are the median sale prices for the last four full months in Ocean City:

January: $1,039,000

February: $950,000

March: $999,000

April: $830,000

Now, here's the median sale price for 60 sales so far in May:

May: $975,000

The average in May is a whopping $1.2 million, led by a $6.4 million sale on Barbados Ln. (more on that in a minute).

So May, at least so far, seems to be back within its normal trading range for 2023.

Bubble time?

Still, you have to wonder at what point things turn.

This is a snapshot of a handful of pandemic bubble towns, like Boise, Phoenix, and Austin, along with the relatively stable Philly metro market, compared to Ocean City.

Redfin's data doesn't include April yet, so I drew a line where Ocean City's April data would have fallen.

What do you notice about this?

Few things:

• The pandemic bubble towns all declined quickly in the middle of last year

• Philly's market is remarkably stable

• Ocean City just kept going

The price per square foot chart - always higher in a beach town - is even more striking:

Prices have effectively doubled in Ocean City in four years. That's largely what happened in those bubble markets until they turned.

The Jersey Shore in general is a great work-from-home location. Unlike those markets, which largely required you to move there, the Shore allows you to keep your home in the city and spend just part of your time at the beach. This is why Cape May County is the most expensive second home market in the country.

But as much as we love Ocean City, something has to give here. Eventually things have to slow down. April looked to be a turning point, but May has rebounded.

So here's the question: If interest rates remain flat, say between 6% and 6.5%, does the lower inventory keep prices stable (or going up)? And then what happens when rates come down? Does all the pent up listing demand tank the market? Does it bring in even more buyers looking for second homes? It's hard to tell. But I suspect something has to snap hard if we see a rapid change in rates.

🥶 Does This $6.1 Million Renovated Beachfront Duplex Signal a Top in the Market?

One has to wonder if this $6.1 million duplex, listed by husband and wife team Kristina and Robert Doliszny, which represents units 3332 Wesley Ave. and 3334 Wesley Ave., signals a bit of a top.

The 8-bedroom, 8-bathroom (4 per unit) sold in early 2022 for $3.15 million. It was built in 1982, according to tax records, and required extensive renovation and updating.

The buyer chose Door number 1-- the complete renovation.

It’s now listed at $6,100,000 for both units, or $2,895,000 (first floor), $3,295,000 (second floor).

Here's what it looks like now:

Do all the upgrades justify a $3 million increase? We’re probably talking six, not seven, figures in terms of updates. That’s quite the premium for a move-in ready, 40-year-old home.

Few other things that stood out to us:

• the listing includes no build date or property history because the agent changed the naming convention (3332-3334 Wesley vs. 3332-34 Wesley), meaning there’s a bit of slight of hand here

• the description for the top unit calls it a “new duplex”, even though it’s not new, but rather just heavily renovated

• only 3 other condos have sold for more than $2.8 million this year, all of which are modern 5-bedroom beachfront condos

• only 1 property has sold for over $6 million in the last 12 months: the beautiful Barbados Ln. house we’ll tell you more about in a minute

Anyway, we feel this one is a reach. You can get more details in our full post here.

💰 Behold, Ocean City’s Most Expensive Home Sale This Year

26 Barbados Ln.

Sold for $6.4 million on May 3

It is only the second residential property to sell for over $6 million in Ocean City in the last 12 months! It was bested only by 2021 Wesley, which sold for $7.5 million last May. So the comps are out the window here. The buying process looks like this:

Are you rich?

Do you want to buy this house?

Yes, you do.

The listing:“This absolutely stunning single family bayfront home is located in Ocean City’s Riviera neighborhood and features 5 bedrooms and 6.5 baths. The 127 feet of bay frontage provides room for three docks, a deck that extends over the water, multiple seating/entertaining areas, and an inground pool.” 

You can see more pics and read through our snark in the full post right here.

🔥 Agent Hot Takes

Our agent gives their no-filter takes on the latest OC listings.

You can view them all on our website right here.

🔗 Links

Some links to other articles:

• Jersey Shore is the nation’s most expensive second-home real estate market 💸

• The curious case of this $2.5 million (now 2.3) North End condo 🤨

• What new mortgage fees mean for Ocean City real estate 🏦

If you liked it, you can get more on Ocean City real estate every day by visiting our website, ShoreCribs.com.

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