Fundamentals Say The LBI Real Estate Market is Not in a Bubble
Click here to search all homes for sale in the Long Beach Island NJ real estate market
Is the Long Beach Island Real Estate Market in a Bubble 
Is the Long Beach Island Real Estate Market in a Bubble 
Is the Long Beach Island Real Estate Market in a Bubble
Long Beach Island Real Estate
With the recent increase in home prices, many would-be buyers are asking if the Long Beach Island real estate market is in a bubble. That is a fair question, and there are multiple opinions. While the truth is that nobody knows where prices will be in one month, six months, or a year from now, the fundamental of the national and local LBI real estate market strongly suggests that we are not in a bubble. A bubble in the LBI real estate market usually occurs when the price of a home exceeds the buying power of those looking to purchase and demand falls. That is not the current case on Long Beach Island or even in the national market. Several factors support this, but chief among them are:
- Interest rates are still very low
- Demand is high both locally and nationally
- There are strong incentives to buy, which are likely to remain for some time
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
Is the Long Beach Island Real Estate Market in a Bubble
Affordability is the key to any real estate market, and right now, despite higher home prices, homes are still affordable thanks to current interest rates. In many national markets, buying a home is cheaper than renting, which will help to keep demand strong. Credit is widely available, and it is being utilized in a far more reasonable fashion than it was in 2005 and 2006 when the last real estate market crash took place. Contrary to those times when buyers were purchasing homes with no money down, interest-only adjustable-rate mortgages, today’s low-interest rates are often locked in for 30 years, making the cost of owning a home sustainable and predictable. While it is true that as rates increase, so too will the ability to pay the current prices fall, there exists a massive gap between buyer demand and the supply of homes for sale. In the LBI real estate market, we have been averaging 2-3 months of supply of homes for sale. A balanced real estate market usually exits when there are around six months of inventory. As you can see, there is a long way to go before we are in a balanced market, let alone a falling one. Lastly, there are still several incentives to buying a home right now as opposed to other investments. The stock market is trading at all-time highs like the real state market, but unlike the stock market, a home on Long Beach Island can be used or rented, which you can’t do with a stock! Therefore, many buyers who can purchase a home may find it to be a better use of their money or a better investment in the second home market on LBI.
Fundamentals Say The LBI Real Estate Market is Not in a Bubble
While the fundamentals say that we are not in a bubble, as I mentioned above, nobody knows what the future holds. There are many ways for the market to go down and many ways for the market to rise. If the timing is right for you and your family to purchase a home in the LBI real estate market, the best thing to do is focus on what determines value. If a home has value, meaning a good location, good lot size, etc., chances are it will be a good investment now and in the future. If you have any questions about buying, selling 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
Click here to search all homes for sale in the Long Beach Island NJ real estate market
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