5 more beachfront resort areas with hot real estate deals

July 1, 2011

In mid-June, Reuters Wealth reported on five beachfront resorts that market watchers say hold special potential for big bargains poised to gain value in the long run. But the deals hardly stop there; what follows is a list that rounds out their recommendations — and a key tip on how to land your place in the sun.

Dolores Conway, a professor of real estate economics and statistics at the University of Rochester, says current market conditions have yielded many foreclosures in beach communities that are otherwise stable. That would make your first stop en route to beach bliss realtytrac.com. “It’s a wonderful site for tracking foreclosures,” Conway says, adding that it also shows otherwise reluctant buyers how to purchase a foreclosed property.

This new list begins just as our first one did — in the Sunshine State, which holds real estate pickings on the order of an orange grove at the peak of fruition.

1) Tampa, Florida
In the waterfront state where real estate prices took the biggest hit, Tampa has had it especially tough, and it may take years before it fully recovers. On average, homes there are 49 percent off their peak, according to Jeffrey Rogers, president of Integra Realty Resources, a New York-based real estate valuation and consulting firm.

Like Ft. Myers to the south, Tampa is a well-established gulf-shore community that has plenty of infrastructure, but also a demographic sweet spot that skews older than other resorts.  Tampa attracts fewer high-flying vacationers and more retirees, especially those New Yorkers and Canadians who’ve invested heavily in Florida getaways over the last decade, says Rogers. 

 “Tampa was hit very hard by the downturn, and will be one of the last areas to recover in Florida because other areas are more desirable” to buyers. The good news is that median home prices are holding very low, at about $130,000 according to Rogers.

2) Cocoa Beach, Florida
The name sounds delicious — and so are the bargains, according to one local broker. “A beach house for $170,000: Need I say more?” asks Barb Keller, broker/owner with ERA Showcase in Merritt Island, Florida. True, sales are up in response, but prices still average about 50 percent below peak market value, according to Keller.  There’s plenty to recommend in this area — the closest beach to Disney World — but check out new condos carefully.

“Do your due diligence and check out a building that looks like a bargain…There may be issues where not enough people are paying for maintenance,” says Edward Mermelstein, co-founder of international real estate law firm Rheem Bell & Mermelstein LLP. “That’s prevalent, especially in Florida with new-construction condominiums.”

3) Santa Barbara, California
Ninety miles north of Los Angeles, Santa Barbara is just far enough from the big city to offer real deals at a median price 25 percent lower than Santa Monica to the south. After hitting a peak of $1.03 million in mid-2006, median home prices now hover just above $600,000, their lowest level since 2003. “When you go further up the coast from Los Angeles, you’ll see some bargains near Santa Barbara, because of all the overbuilding there,” says Conway. “There may not be a bottom yet.” That’s not to say that this town of 400,000 is low on charms; its flawless year-round weather has earned it the nickname “the American Riviera.”

4) Virginia Beach, Virginia
At least 30 percent off its price peak, Virginia Beach should stay stable thanks to the robust military economy that surrounds it. Yet local agents stress the market tends to present unexpected deals when military families have to ship out. What’s more, its peak occurred a year later than in the rest of the nation, so the bottom may still be in sight. In Virginia Beach’s ritzy north end, median prices have dropped to $500,000, down from $730,000 in 2007, says Shelly Constanz, sales manager for Atkinson Realty ERA. “A condo purchased at the height of the market in 2007 for $750,000 unfurnished just sold as a short sale furnished for $400,000,” Constanz says. ” And it has awesome ocean views.”

5) Toms River, New Jersey
Much of this Ocean County, New Jersey seat is on the mainland — but this boater’s haven has so much going for it that it demands a second look. What’s more, Toms River ranked as the ninth safest city in the U.S. in 2007 by CQ Press. Rogers notes that Toms River “is a place where buyers are looking,” along with shore towns Avalon and Stone Harbor, New Jersey.” Home prices are off 30 percent, at around $240,000, though bay-front properties go for $450,000 and up, says Louisa Sagarese, Sales Manager for ERA American Towne Realty. For that money, you’re not only close to the ocean, but also within easy commute to New York City, Philadelphia and Atlantic City.

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