Five Reasons Why the Long Beach Island Real Estate Market Will Not Crash

Five Reasons Why the Long Beach Island Real Estate Market Will Not Crash

Understanding Why This Is Not 2008 in the LBI NJ Real Estate Market

Click here to search all homes for sale in the Long Beach Island NJ real estate market

Long Beach Island Real Estate

The Long Beach Island real estate market has been on a wild ride since March 2020. The average price of a single-family home is up around 40%, inventory is low, and demand is high. This has led some to compare the current market to 2008 and 2009 when the real estate market crashed, and prices dropped. The truth is, this LBI real estate market is very different from the LBI real estate market of 2008. Likewise, the national real estate market is much stronger as well, which makes the likelihood of a crash very low.

By : Nathan Colmer | The Van Dyk Group

Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com

www.BuyLBI.com

Click here to search all homes for sale in the Long Beach Island NJ real estate market

Five Reasons Why the Long Beach Island Real Estate Market Will Not Crash

Here are five reasons why the Long Beach Island real estate market should remain stable and continue to rise:

  1. Lending standards are very different and more responsible: Unlike in 2008, most buyers take advantage of the low interest rate environment and lock in 30 year fixed rates loans. The qualification of these loans is far greater than it was in 2008 and 2009 when buyers could obtain a no-documentation loan with an adjustable-rate, interest-only loan!
  2. Inventory levels are very low: There is a shortage of homes for sale in the LBI real estate market and nationwide. Before the market crashes, we would have to see a surplus in inventory which we are a very long way away from. 
  3. Homes in the LBI real estate market are still affordable: While it is true that prices have risen considerably, two trends can help a buyer in the LBI real estate market: interest rates and the rental market. The lower cost of ownership and the higher rental income help to offset the increase in the purchase price of a home on Long Beach Island
  4. Interest rates are low, and buyers are locking them in: Unlike 2008 and 2009, where buyers agreed to an adjustable-rate loan with unknown limits, many of today’s buyers are locking in a low interest rate on a fixed-rate mortgage. This helps to predict cash flow and enjoy a lower cost of ownership.
  5. The LBI rental market has grown as well: The additional rental income helps with the cash flow of a Long Beach Island homeowner. With the increase in rental rates, homeowners are reasonably assured that they will be able to cover their cost of ownership, thus avoiding foreclosure or short sale if they fall on hard times. 

Understanding Why This Is Not 2008 in the LBI NJ Real Estate Market

Of course, nobody knows the future, and there are plenty of ways for the LBI real estate market to fall, but all signs point to a more substantial market in the future. The low inventory levels combined with the high demand and favorable market conditions indicate that the LBI real estate market will continue to rise! If you have any questions about buyingselling or investing in the LBI real estate market, please do not hesitate to contact me.

By : Nathan Colmer |LBI Real Estate Agent | The Van Dyk Group

Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com

www.BuyLBI.com

Click here to search all homes for sale in the Long Beach Island NJ real estate market

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