It depends. Is owning seashore real estate a personal goal, or is it just an alternative to Wall Street ? Do you intend to hold onto the property for the long term? Do you expect to use rental income to help cover your costs? Do you have something to sell first? Do you expect to finance most of your purchase? Do you have a specific property in mind, or just a price range and general location? Answering these questions is the first step toward figuring out whether you are ready to buy.
If owning seashore real estate is a personal goal, for your enjoyment and that of your family, there is no bad time to buy if you are looking for a unique property and one hits the market that is perfect for you. If you just want a place at the shore, and don’t have specific criteria in mind, it is still a good time to buy, but your strategy may vary depending on the price range you are looking in. If you are in the $500,000 and under market, you need to be actively looking now, because inventories are shrinking, good deals don’t last on the market, and we are seeing some upward price pressure. If you want to spend up to $750,000 or so for a 4BR/2BA condo or a single family home, inventories are likewise thinning out, but you still have a selection. If you are looking for a bargain at higher prices, there is a surplus of lagoon-front and oceanfront properties, with sellers who have varying degrees of interest in selling. There is some selective picking off happening, where savvy buyers have selected a number of properties and started firing offers at them, moving on to the next property if they don’t like the seller’s response.
If you have a property to sell, don’t expect the owner of what you want to buy to be overwhelmed by an offer with a home sale contingency. Unless your place is under contract and the buyers have satisfied all contingencies, a seller is not likely to tie his property up hoping that you can sell yours. Put your place on the market, and make closing contingent on your finding a suitable replacement if you must.
If you plan to finance your purchase, your first call should be to your lender or mortgage broker to find out how much you can borrow and what the rules are for that particular lender. Many lenders require 30% down on condo purchases and 40% or more down on investor loans, but there are some lenders who will go higher. Regional banks offer 20% down even on investment loans, and some offer creative construction to permanent loans for those developing a property.
If you want to rely on rents to help cover your costs, keep in mind that rents have remained stable while property values were declining, so buying now while prices are still low will give you the most favorable ratio. Also, the mortgage interest rates are holding at relatively low levels for now, creating ideal conditions for investment.
And if you are looking for just a foothold in a place by the sea, the local condo-tels, or hotel/motel conversions, offer efficiency units starting at $30,000. Don't get too excited about that number, though. Banks may not be willing to lend on some of these, and condo fees can be $300 a month or more. The least expensive one-bedroom condos are just under $100,000, and these too may have hefty condo fees. These properties are selling for less than half what they were commanding at the peak of the market, and may be a good buy for the right buyer.
If you are not sure if you are ready to buy, you should still start your search now. Inventories of all residential properties - single family homes, condos and multi-family buildings - are holding below 1,000 listed properties, and some buyers are having trouble already finding what they are looking for. My website has a link that allows you to search the South Jersey Shore Multiple Listing Service in detail, so go ahead. It will give you something to do until beach time comes around again!