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These Are The Places You Can (Still) Get A Cheap Beach Property

Many affordable beach towns are just a short drive away from the expensive cities and resorts.

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Many affordable beach towns are just a short drive away from the expensive cities and resorts.

Almost everyone wants a seaside vacation house but, when you start looking at prices, the dream starts to feel a whole lot less achievable. 

In places like Malibu or Nantucket, the average price of a "little place by the beach" now easily runs upward of several millions.

The most popular destinations do have prices that have completely pushed out even people with above-average incomes.

But the country has numerous quaint seaside towns with average properties below $400,000 and lots of options on the market. 

For its annual list of the country's affordable beach towns, Realtor.com looked at median prices of cities that had no fewer than 30 listings in April.

In many cases, they are just a short drive away from expensive resorts that many will not look beyond when looking for a place.

"Most people, when they think of beach towns, they focus on a few dozen destinations," George Ratiu, manager of economic research at Realtor.com, said in a statement. 

"However, there are a lot of hidden gems, which offer all the benefits of seaside living at a much lower price."

Atlantic City, New Jersey:

While hardly under-the-radar, Atlantic City's kitsch reputation makes it a relatively affordable place to satisfy that beachside living dream. 

The median listing price is $161,754 and there is no shortage of homes on the market.

Atlantic City, New Jersey.

Due to its status as East Coast's gambling and entertainment mecca, Atlantic City is a safe bet for would-be Airbnb  (ABNB) - Get Airbnb, Inc. Class A Report investors who need a steady stream of visitors.

The city is currently in the middle of a visitor boon both amid and after Covid-19 travel restrictions; home prices have jumped 18.8% since April 2021.

"The high-rises right by the beach are doing good," local broker Nancy Vasta told Reatlor.com "Now, you'll see one condo left in each high-rise, where before you could go and see five or six."

Deerfield Beach, Florida:

Florida is the quintessential beach state.

For those who are priced out of the most expensive destinations, there are endless other options for those who want to break into the vacation property business.

Just a few miles outside of the more affluent Boca Raton and Palm Beach, Deerfield Beach is attractive not only for its proximity to the water but also for its real estate prices. 

The median listing price is $230,071 and, while that may not get you a seafront estate, some Northeasterner will surely want to rent whatever you buy for a winter getaway.

"Older buyers can find some of the most affordable waterfront options, including this two-bedroom condo on the Intracoastal Waterway asking just $299,222 for 55-plus buyers," reads the report. 

"Younger buyers can also find their own bit of beach without breaking the bank, including this $400,000 one-bedroom condo right on the ocean."

New London, Connecticut:

Connecticut is another state that, in the eyes of many, has given up on affordability entirely. 

But while that may be the case in New Canaan or Greenwich, the median listing price in New London is only $242,392.

There are even a few properties below $150,000 on the market.

Deerfield Beach, Florida.

Why is it so cheap? 

It often has to do with demand and New London has not yet received the PR push of a popular beach destination. The flip side is that this could mean growth potential for investors.

"Water babies can find homes with a view starting in the mid-$100,000 range," reads Realtor.com. 

"For example, this two-bedroom condo is asking $149,900 while this two-bedroom condo with a seasonal dock space available (for a fee) is listed at $255,000."

Mastic Beach, New York

You're probably surprised to see a town in The Hamptons on this list as in places like Water Mill the average home price is nearly $4 million. 

A 40-minute drive from Southampton, Mastic Beach is yet to shake its working class roots and has a median list price of $334,907. 

That may not get you a place right by the water but it will get you  — or, if you're doing this as an investment, your Airbnb guests — a place to crash in the Hamptons in the summer.

Myrtle Beach, South Carolina.

"In the notoriously exclusive Hamptons on Long Island, Mastic Beach doesn’t get the same sort of rich and famous resort crowd as its world-famous neighbor," reads the report. 

"But this working-class beach town has a lot to offer ocean lovers who can’t afford a multimillion-dollar 'summer cottage.'"

Myrtle Beach, South Carolina:

Myrtle Beach makes lists of the best beach towns again and again in large part because, for a relatively affordable entry price, one gets access to not just a picturesque beach but an endless array of dining and entertainment options.

The median listing price is $347,875 and, as the endless array of Airbnb and VRBO listings show, investors will not struggle to find people who'll want to rent a property during the popular seasons.

Myrtle Beach real estate prices rose by 21% since April 2021.

"There are tons of waterfront homes to choose from, whether buyers are making a full-time move or seeking a vacation rental," reads the report. 

"Such as this two-bedroom condo on the market for $289,900 with killer views of the ocean or this historic five-bedroom beach house with views of the ocean and a pier from the front porch for $595,000." 

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Economics

An Investor’s Look Back for 2022

As we approach the end of June, now is a good time to look back over the market to see what has been happening. The price action is in the bottom right…

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As we approach the end of June, now is a good time to look back over the market to see what has been happening.

The price action is in the bottom right corner of the charts, whereas, at the end of 2021, it was in the top right corner of the charts. Who could have seen the problems coming? I think the technical analysis arena did an excellent job of showing the risks for downside momentum to increase.

On December 17th, I recorded a video about the technical problems aligning in the market and how they created the situation for a rough start to 2022.

A historical look back

In six-month increments, let's take an educational look back on what has been happening.

June 2021

Starting in June 2021, we came off the effervescent high of the SPAC boom. As the book Reminiscences of A Stock Operator highlights so clearly, when there is an abundance of money trying to enter the market, the bankers will respond with new offerings. Nowadays, venture capitalists have all the data they need to be ready to hand over these companies at lofty valuations and step aside for the downside slide. By June 2021, the SPAC announcements had slowed to a relative crawl compared to the 4th quarter of 2020 and the first quarter of 2021.

The defensive side of the market was out of favour, still showing positive returns to their investors, but vastly underperforming. Energy raged forward as the vaccines were rolling out, suggesting the economy would surge with post-pandemic freedom. More on that later. Real Estate and financials were on fire. Interestingly, the growth areas of discretionary, communications and technology were middle of the pack.

December 2021

As the second half of 2021 rolled in, the market changed significantly. Communications and industrials vastly underperformed everything. Technology was back to a glory story, while discretionary and real estate continued to flourish. Financials were in the bottom third. Materials, energy and defensive names were middle of the pack.

By late December, we were also narrowing our focus on the Sexy Six large cap names that kept holding up, even while there was a large breakdown in many of the trendy areas of the market. We didn't know it at the time, but the November high in the Nasdaq was behind us. The move to electric cars and the investment theme around them came and went. Copper made a high in May 2021 and most of the metals moved sideways for the remainder of the year. Oil continued its steady climb in a big bull market that kicked off with the vaccine announcements fourteen months prior.

June 2022

As we turned the corner into 2022, almost all of the upward momentum was focused in energy. Technology stocks, including semiconductors and software, moved down meaningfully as the sexy six slowly let go. Alphabet, Meta and Amazon were the early leaders to the downside. Consumer discretionary and communications dropped hard.

By the end of June, the continuous slow demise of investors' love for the technology space came to the fore. By March, investors were touting the start of a new bull market in Energy. After a 1000% gain in the oil and coal stocks, the relative strength community reluctantly decided it was a new bull market in fossil fuel energy. (You can't make that stuff up!) Still, the technology investment community has been reluctant to dive into the dark side. While the tiger cubs watched 50% of their asset valuations disappear, they couldn't muster a shift into the best performing sector for the past 18 months.

To end the quarter, the financials wobbled sideways but slowly moved lower. On Friday, June 17th, the bank ETF closed at new 52-week lows. Commodity stock markets like Australia and Canada dropped meaningfully as oil names sold off hard. Oil stocks quickly plummeted for 10 days from new highs to their 200-day moving averages, casting down 25%. The technology names continue to be sold as inflation roars. The Fed is speeding up their time line for rate hikes as the economy slows quickly under the pressure of firm gasoline prices and rising food prices.

What's next?

The graph below shows the stock market price/earnings ratio (P/E) ticking down over the past 6 months. The move down is a 20% drop from all-time highs. Because this is a 100-year chart, the log scale makes the move down look small. An arithmetic chart would show this as a 20% plunge of the entire chart height. With the Fed continuously providing a trampoline for the markets from 2008 to 2022, the market has stretched into higher and more extreme valuations compared to history. Since the early nineties, the market has hugged the red line a lot more than the middle of the range at the blue line. Now that we are below the red line, we are in a relative value area for investment managers, as they have seen the market above the 20 P/E level most of their careers.

The next move for the market is unknown, but the fight between the headwinds of inflation forces and the desire for investment managers to make money before year-end should be an epic battle. Throw in the US Mid-terms and that adds more pressure.

The strength indexes we use at the Osprey Strategic website to evaluate when to put money to work are trying to turn up. If you are interested in getting help evaluating the market, check out the one-month trial at $7 on the homepage of OspreyStrategic.org. We are looking for the fourth buy point of the year right now. The last three were very short. Will this one be the one that extends into the next bull market?

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Economics

Oracle’s Larry Ellison Revealed As Buyer Of $173 Million Mansion, Setting Florida Record

Oracle’s Larry Ellison Revealed As Buyer Of $173 Million Mansion, Setting Florida Record

Last week, billionaire internet entrepreneur (Netscape…

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Oracle's Larry Ellison Revealed As Buyer Of $173 Million Mansion, Setting Florida Record

Last week, billionaire internet entrepreneur (Netscape co-founder) Jim Clark broke the news to the WSJ that he sold his oceanfront estate near Palm Beach, Florida, for $173mln. At the time, Clark wouldn't reveal who the mystery buyer was. 

Bloomberg reports the buyer of the most expensive property ever sold in Florida is no other than billionaire Oracle Corp. co-founder Larry Ellison. 

Ellison's new estate includes a 62,000-square feet Mediterranean-style mansion and several other buildings on the property with more than 30 bedrooms. It was noted by Bloomberg 

The real estate transaction was off-market. Clark bought the estate in early 2021 for $94 million. Despite soaring interest rates and a souring economic backdrop in the US, Ellison still paid an 84% premium from when Clark purchased the estate. 

Last year, Ellison spent $80 billion on a North Palm Beach mansion that he intends to demolish. He owns homes in the San Francisco Bay Area and Malibu, as well as 98% of a Hawaiian island he purchased for $300 million in 2012. 

Billionaires have fled to South Florida since the virus pandemic, buying up as much land and mansions as possible to escape liberal-controlled metro areas quickly sliding into a violent mess. Also, Florida is pro-business and tax-friendly, unlike blue states. 

This week, billionaire Ken Griffin announced Citadel's headquarters are moving to Miami. Currently based in Chicago, Griffin said in May his "patience is wearing thin" as the metro descends into a summer of hell under the failed leadership of liberal Mayor Lightfoot. 

Other firms like Goldman Sachs have moved offices to South Florida as New York City is another cesspool. Some have referenced South Florida as "Wall Street South."  

Tyler Durden Fri, 06/24/2022 - 14:45

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Bonds

HW+ Member Spotlight: Ben Bernstein

This week’s HW+ member spotlight features Ben Bernstein as he shares why it’s an interesting time to be tracking the housing market and all of the…

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This week’s HW+ member spotlight features Ben Bernstein, director at Axonic Capital, an investment firm with a deep focus on the structured credit sector of the financial markets. Prior to that, Bernstein held leadership roles in Odeon Capital Group and JPMorgan Chase.

Below, Bernstein answers questions about the housing industry:

HousingWire: What is your current favorite HW+ article and why?

Ben Bernstein: Logan and Sarah’s Monday podcast is my go to. Logan cuts through all the noise and delivers clear concise opinions rooted in the data. So not only do I get updates on what is going on in the housing market but I learn which data points are relevant and how to analyze them. And Sarah always asks insightful questions. On top of that, it is super entertaining!

HousingWire: What has been your biggest learning opportunity?

Ben Bernstein: My biggest learning opportunity (and weirdest job I ever had) was every job I ever had. I started my career at Bear Stearns on February 23 2008. To say that was an interesting time and place to start a career would be an understatement. Two weeks later I was working for JPMorgan and eventually made it to a desk whose focus was working out of the assets that brought Bear down in the first place.

Think funky bonds linked to housing like subprime RMBS and CDOs. Getting to dig deep into what these bonds were and how the underlying mortgages impacted them was priceless. I started at Axonic, a credit fund focused on investments linked to residential and commercial real estate, in November of 2019.

Another interesting time to join an investment firm! Three months later, I was working remotely and figuring out how to be productive from home. Fourteen years into my career and my biggest learning opportunity is right now.

I’m learning new stuff every single day whether it be about the bond market, housing, trading, macro economics, etc. All I need to do is turn around and ask a question out loud and I’ll learn something new.

HousingWire: What is the best piece of advice you’ve ever received?

Ben Bernstein: The best piece of advice I’ve ever received was what is important is what you do when no one is looking. Your reputation, work ethic, success, productivity and integrity are all linked to what you do because you know you need to do it as opposed to what you think other people want you to do.

HousingWire: What’s 2-3 trends that you’re closely following?

Ben Bernstein: I don’t think anyone will be surprised by the trends I’m following these days: Inflation, credit spreads, housing prices and how they are all intertwined. Fortunately I have smart people around me (including HousingWire) to give me their opinions on where we are headed. It’s my job to put it all together. The past two years have been some of the most interesting times in markets and from where I sit I don’t think that will change any time soon.

HousingWire: What keeps you up at night and why?

Ben Bernstein: What keeps me up at night is the state of the housing market. 35+% home price appreciation since COVID-19 began. Two months supply of housing. Mortgage rates going up faster than they ever have. There’s a lot going on!

One thing as bond traders that we do is we look down before we look up. In other words we look at risk before we look at upside. An overheated housing market is something we pay close attention to because we don’t want prices to go down precipitously but we don’t want inflation to run away either. So it’s really an interesting time to be tracking the housing market and all of the ancillary markets that are impacted by it.  

To become an HW+ member, click here.

For more information on HW+ benefits, click here.

To view past issues of our HW+ exclusive HousingWire Magazine, go here.

The post HW+ Member Spotlight: Ben Bernstein appeared first on HousingWire.

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