Never mind the hurricane. Ocean City, by one measure, remains the most sought after place in America for a vacation home.
And right behind America’s Greatest Family Resort is North Wildwood as the second most interesting place to vacation home buyers.
These two summer resorts topped the nation in searches the past year on real estate information service Trulia for vacation homes to buy, according to an analysis by 24/7 Wall St., a financial news and opinion provider based in Delaware.
The firm considered a town a vacation area if at least 25 percent of the houses were used seasonally as opposed to year-round. The searches in those towns were counted from April 2012 to March 2013.
Jed Kolko, chief economist for Trulia, said much of the appeal of Ocean City and North Wildwood is obvious: Great beach towns within an easy drive of millions in Philadelphia and New York.
Real estate agents in the towns pointed out some of the less apparent factors that drive vacation home interest there.
Gary Jessel, broker/owner of Fox Real Estate in Ocean City, said resort properties offer buyers a lot of flexibility in their use and value.
Jessel, who also lives in Ocean City, said he likes to vacation in the winter in the West Palm Beach/ Jupiter, Fla., area, and would consider buying a second home there.
“But they restrict the rental of the property to at least four months at a time,” Jessel said.
“That’s pretty much the season” and would preclude him from using a few weeks for his own vacation, he said.
In Ocean City, owners can rent their properties by the week.
Many vacation in the city for one or two weeks each summer and rent the rest of the time, he said.
“Here you get the tax benefits of an investment property, the benefit of vacation use and the long-term increase in value,” Jessel said.
The proximity of Atlantic City adds a use in the off-season.
“The beauty of the casinos, which are a blessing to Ocean City, is we have people coming in all year now,” he said. “They come down for weekends in the off-season and head over to the casinos.”
Trulia data put the median asking price of an Ocean City vacation home at $525,000, the highest of all of the vacation neighborhoods analyzed by 24/7 Wall St. But Jessel said that although you can buy “some extremely nice properties” for a couple of million dollars, there are affordable duplexes and condos that split the high cost of island land.
An example, he said, is a Brighton Place condo listed for $249,000 that already has 12 weeks rented this summer at up to $950 a week.
“Somebody could buy that property, get a lump sum of cash at settlement, and still use a couple of weeks to vacation themselves,” he said.
Beach resort affordability is the claim to fame for North Wildwood, where the median asking price for a vacation home is $289,000, Trulia said.
Don Martin, broker/owner of Don Martin Realty in North Wildwood, said the appealing value of homes there doesn’t stop with the price.
The well-managed city government restrains the local tax rate, which when applied to modest property assessments makes “city taxes come close to the lowest average in the county,” he said.
The inventory of available homes for purchase has shrunk considerably, which is putting upward pressure on prices, he said.
Trulia data shows asking prices in North Wildwood have increased 16 percent in the past year alone.
“Over the last two years, we’ve probably seen about a 10 percent increase in our values,” said Martin, who also lives in North Wildwood. “Investment-wise, I think you make out better in North Wildwood than anywhere else on the Jersey Coast.”
Jessel said the Ocean City market was having a very good year in 2012 before Hurricane Sandy hit and “kind of shut us down.”
But Trulia’s Kolko said searches for vacation homes there bounced back quickly.
“Sales activity started to pick up in March pretty significantly and continued strong through May,” Jessel said.
After Ocean City and North Wildwood, the next eight towns most searched for vacation homes were: Kissimmee, Fla.; Ocean City, Md.; Marco Island, Fla.; Big Bear Lake, Calif.; Lake Arrowhead, Calif.; Panama City Beach, Fla.; Gatlinburg, Tenn.; and Cherry Grove Beach, S.C.
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