The Top Concerns Buyers Have on Long Beach Island
Buyer Concerns in the LBI Real Estate MarketBuying a Home on Long Beach Island New Jersey
Buying a house on Long Beach Island is an investment. For some, the investment could be purely financial with a buyer looking to turn the home around and sell it for a profit. For some, the investment in emotional in trying to create family memories at the Jersey Shore. For most, buying a house on Long Beach Island is a combination of both factors! Regardless of the motivation, buying a home in the LBI real estate market requires careful planning and Buyer Concerns in the LBI Real Estate Market should be fully addressed before making an purchase.
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Buyer Concerns in the LBI Real Estate Market
Like any investment, buying a home on Long Beach Island carries risks and rewards. Before, committing to a transaction in the LBI real estate market, it is a good idea to understand some of the risks associated with home ownership. The most common Buyer Concerns in the LBI Real Estate Market center on the following three topics:
- Flood insurance rate increases
- Hurricane and storm damage
- Declining property values
Most buyers looking at homes for sale on LBI have concerns about future flood insurance rate increases. Even if a buyer is looking at a home that is elevated well above base flood elevation, rising insurance costs are still a concern. If flood insurance rates become too high, some would not be able to afford their property and be forced to sell. The good news is, flood insurance is a national program and any changes made impact ALL properties in flood zones around the country. This limits the severity of change to the National Flood Insurance Program as out pricing homes on Long Beach Island would also out price homes in other markets as well. Even the changes and increases made after Hurricane Sandy have been drastically reduced to promote the local economy.
Damage from flooding is another valid buyer concern in the LBI real estate market. Flooding is a natural part of living at the beach and it is to be expected to some degree. There are areas of LBI that are more flood prone than others, and extra caution should be taken when looking in these areas, but on the whole, Long Beach Island is a high and stable elevation which limits the impact of flooding. True flooding, where water enters a home, seems to take place every 20-30 years and even then, only the homes are lower elevations are badly damaged. Thanks to FEMA grants from Hurricane Sandy, many homes on LBI have been raised or torn down to make way for a new home to be built. This will limit the damage from flooding and will also help keep insurance costs for the area low.
A decline in the value of a home is perhaps the greatest concern for a buyer in the LBI real estate market. A real estate market, like any market, will be subject to highs and lows. There have been, and there will always be, periods where the value of real estate falls. The good news is, Long Beach Island is a popular destination for summer vacationers which opens the market to summer rentals. If the economy slows and the job market weakens, a fall in property values is expected. This can led to short sales and foreclosures as we witnessed in 2008 in many housing markets. Short sales and foreclosures have a negative impact on the value of homes in any real estate market. However on Long Beach Island, summer rentals stave off the need for short sales as the income produced can cover the costs of owning the property. This insulation against distressed sales has helped to keep the LBI real estate market stable and investments more secure.
Buyer Concerns in the LBI Real Estate Market are important to understand and a buyer must be comfortable with the transaction. There will always be risk associated with buying any kind of investment however on the whole, investment in the LBI real estate market has proven to be stable and profitable for most! For more information about Buyer Concerns in the LBI Real Estate Market drop me a note and I will be happy to answer any questions you have!
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
www.BuyLBI.com
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