Just off Route 9 in Forked River, blocks of newly rehabilitated and elevated homes are interrupted by the occasional lot overgrown by weeds on which might sit a damaged or vacant home or a foundation naked since superstorm Sandy.
Similar circumstances are visible on Passaic St. in Trenton, scarcely four blocks from the State Capitol, although the initial cause is different. There, the mix of homes includes some newly renovated, well-maintained, deteriorating or boarded-up, and a vacant lot. The city has been busy working on foreclosures.
To real-estate analysts and academics, the circumstances reflect New Jersey's slow recovery from the big storm and the Great Recession. That has created problems for long-term residents, but buying opportunities for property investors, the experts said. The combination feeds into changing real-estate dynamics in much of the state, they said.
One thing both towns have in common is the number of speculators purchasing properties in all-cash sales. This is worrisome given that speculators often use the properties to build rental housing or simply sit on it. In order to truly turn things around, locals want are buyers that will be invested in the community. Still, speculators can be seen as a positive: They usually choose up-and-coming communities to invest in.
In both towns, "if some of these properties had been sold earlier on, they probably would have brought good prices," said Daren Blomquist, a vice president at RealtyTrac of Irvine, CA, a leading real-estate data firm. "Now, they've been sitting there for several years, in many cases empty."
That wards off individual homebuyers. "There isn't the interest that there might have been, because these properties may be in poor condition," Blomquist said. That brings values down and when they finally do sell, it starts yet another cycle because the low values are reflected in comparables. This means local residents have trouble getting equity loans or get lower prices when they do want to sell.
Diana Rogers, Trenton's director of economic and industrial development, said the city's ongoing tax-foreclosure program aims to "remove blight" and restore property to the tax rolls. Some houses may go into the city's homesteading program for first-time buyers, which is still searching for financially qualified applicants.
Through a mix of public, nonprofit, and private sector projects, "we expect to have 500-600 housing units coming on the market in the next 18-24 months," in locations around town, she said.
Rogers acknowledged that some properties have been changing hands, but not necessarily to the new homeowners the city wants. They want homebuyers who will contribute to the community now, in order to turn things around. Thus, another goal of the redevelopment efforts, she said, is to "slow down speculation" by large investment interests amassing property.
The high rate of cash sales is not unknown. Some deals are always made for cash or its equivalents. Big developers write big checks for farmland. Real-estate trusts trade apartment complexes or office buildings. Cities like Newark and Trenton make single houses or lots available cheaply to new buyers. Parents transfer property to children.
But in a stable market, those deals account for about one-quarter of transactions, according to the real-estate firms. Thus, Morris County, a generally well-off area with employment centers and transportation links, had a cash sales rate of about 27 percent in the second quarter of 2006, according to RealtyTrac. It shot up for a bit, but it's about 26 percent now.
In Ocean County, cash sales also were about 26 percent in the second quarter of 2006, according to RealtyTrac. When the recession hit, they climbed. By the first quarter of 2011, they were 46.6 percent.
Nationwide, cash sales hit that same high level in January 2011, according to CoreLogic. In the company's description, many individual buyers could not get loans to buy houses in the usual way, or put off their purchases. Banks were foreclosing on existing mortgages.
Across the country, many markets have returned to something like normal. Overall, cash sales account for about 35 percent of transactions and are trending down, according to CoreLogic's latest report on the subject.
But in Cumberland County, the figure was almost 55 percent, according to RealtyTrac. Ocean County and Atlantic County were just under 50 percent, while Mercer was above 45 percent. In Ocean, the rate has been above 40 percent for 5½ years. Even well-off Monmouth County was as high as 48 percent last year.
As in Trenton, that is a compliment of sorts for the Shore counties.
"We're seeing a real shift in those places, with well-capitalized interests buying up lots of properties as opposed to smaller investors buying their own vacation homes," Blomquist said.
"Private equity, hedge-fund type investors, particularly in an area with a reliable vacation rental market, if you can buy when prices are depressed, that's a real sweet spot," he said.
From a business perspective, even if properties are being amassed in the names of various partnerships, having them managed by a single entity may make it easier for vacation renters to search and chose their summer places, he said. "There's a cultural shift and maybe even a technological shift" in the way summer rentals will be marketed and reserved, Blomquist said.
There is another factor at play, according to James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, who scrutinizes development trends around the state.
Areas on the far fringes of metropolitan areas, with scant public transportation or indigenous industries, already are under stress, Hughes said. He has seen that in his own Hunterdon County, where he serves on an economic development group. There, rapid growth has halted and reversed.
In a 2014 study with fellow Rutgers professor Joseph Seneca, "New Jersey's Postsuburban Economy," Hughes documented some of the changes taking place as older, suburban residents leave the state and millennials and immigrants flock to urban areas.
In a five-year period, Brooklyn, NY, attracted one of every five people moving into the area, Hughes said. The fastest growing New Jersey suburb is Bergen County, "which had been losing people in the 1990s," he said. Its public transit, employment centers, and proximity to New York City give it advantages over more remote areas, he said.
That trend is good news for communities on bus and rail lines, with downtowns for business, arts and restaurants, according to Hughes. Places like Somerville, and Asbury Park already have made gains, he said.
That is also good news for Trenton, according to Blomquist.
"As far as I know, it's unique among state capitals, sitting on a river that is also the border, so it draws from another state," he said.
With state government, history, recreation, universities and large corporations, plus transit connections to Philadelphia, New York and beyond, it checks a lot of real-estate boxes, he said. So it is no wonder that investment groups may be buying at bargain prices.
But the gap between where New Jersey Transit's Jersey Coast Line ends in Bay Head and the Atlantic City Line connects to Philadelphia leaves many communities without significant mass transit, Hughes said. The precipitous decline of Atlantic City jobs damages the same region's economic prospects, he said.
"Even in parts of Monmouth County, millennials are saying it was a good place to grow up, but they don't want to live there now," Hughes said. "Their parents couldn't wait to get out of Brooklyn, and the children can't wait to get back to Brooklyn."
In the near future, Reinhart said, "the Holmdels, the Colts Necks, the Howells, the West Windsors, those communities are going to be 60, 70 years old. And they're not Hoboken, they don't have a lot of homes with architectural significance."
Farther south, those who can afford the cost of building Shore homes to withstand rising tides and strong storms are still making good investments, he said. But buying a home on a large lot in a sprawling suburb no longer has the same cachet.
"I think those places are going to struggle," Reinhart said.