LBI Real Estate Market Negative Equity

LBI Real Estate Market Negative Equity

Negative Equity in the Long Beach Island New Jersey 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

Over the last two years, the LBI real estate market has seen enormous growth. From 2019 to today, the market has, in some cases, doubled! The rapid rise in prices created a windfall of equity for homeowners who purchased prior to COVID or in the early stages of 2020-2021 when prices were just starting to climb. Now that the market has returned to a more balanced state, many are left to wonder if they have gained an equity position or, even worse, if they now have negative equity in their Long Beach Island home. While negative equity may be an issue in some markets, on Long Beach Island we have not seen this to be the case.

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

LBI Real Estate Market Negative Equity

Equity is defined as the amount of money you “have” in a house. In other words, the difference between the fair market value of a home and any mortgage or debt that is held against the house. If a home is worth $1,000,000 and has a $400,000 mortgage, there is about $600,000 worth of equity in the home (less selling expenses). New homeowners typically have an equity position equal to their down payment as they have not yet benefited from appreciation over time. When someone buys at the height of the market, and then prices drop, they lose their equity position and, perhaps, find themselves in a negative equity position. The good news is the LBI real estate market has yet to experience this. even though interest rates have risen and there is some media attention focused on a slowing real estate market, home sales on Long Beach Island have continued to be strong, and the average price has risen. Over the course of 2022, while interest rates were rising, home prices increased by about $200,000 or so. Therefore, even if someone purchased a home in 2022, it is a fair assumption that they have gained at least some equity. Of course, this will vary from house to house and will depend on how well their deal was negotiated, but on a broad view of the market, buyers in the LBI real estate market should be doing just fine.

Negative Equity in the Long Beach Island New Jersey Real Estate Market

It can be dangerous to track small changes in the market too closely. An investment in the LBI real estate market should be made for the long term, several years at least. Over time, homes on Long Beach Island have shown steady and reliable growth and there is little reason to believe this will change. Inventory levels are low and demand is high, so for the time being, home prices are likely to continue to rise. For more information about buying, selling or investing in the Long Beach Island 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

More LBI Real Estate Information:

LBI Real Estate Equity

Ways to Use Equity in the LBI Real Estate Market

What is an LBI Real Estate Seller’s Market

LBI Home Improvements Before Selling

Four Reasons to Use an LBI Real Estate Agent

Improve Your LBI Real Estate Mortgage Rate