Measuring Appreciation and Depreciation in the Long Beach Island NJ Real Estate Market on LBI
Measuring Appreciation in the LBI Real Estate MarketThe LBI Real Estate Market
There is little question that the LBI real estate market is one of the major drivers of the economic market on Long Beach Island. The real estate market helps to provide guidance in both the sale of summer vacation properties and LBI vacation rentals which provide the base for the summer tourism industry on Long Beach Island New Jersey. All those looking to buy, sell take into consideration the possibility of market appreciation and depreciation as for many, buying in the LBI real estate market is an investment. Therefore, Measuring Appreciation in the LBI Real Estate Market is essential when looking to buy and sell on Long Beach Island NJ.
Measuring Appreciation in the LBI Real Estate Market
Each month I publish a Monthly Sales Update on Long Beach Island. This tracks the average sales price, the average days on the market and the average percentage difference between list and sales price. While this information is helpful as a gauge for the LBI real estate market as a whole, it is important to keep in mind that just because the average sales price is higher or lower, this does not necessarily mean that appreciation or depreciation has occurred in the LBI real estate market. There can be one sale or one group of sales that can through the data askew and I make every effort to distinguish these sales that lay outside the norm. A perfect example occurred in August 2013 where the average sale price of a single family home on LBI was driven higher by a single bayfront transaction that closed for over $7,000,000. In most months, the highest sale is usually in the $2,500,000-$3,000,000 range so it is easy to see how this one sale can distort the sales data.
Measuring Appreciation in the LBI Real Estate Market can only truly take place on a case by case basis as there are a great number of varying property styles and property locations in the LBI real estate market. There are some factors that must be considered when Measuring Appreciation in the LBI Real Estate Market such as:
- The property’s location on oceanside or bayside (or oceanfront, bayfront, etc)
- The distance to the beaches of Long Beach Island
- The age and style of the house on LBI
- Lot size of the property
These factors are key when comparing properties as a 1950’s Cape Cod would not be worth the same amount as a new construction on LBI even if it were the same distance to the beach and on the same lot size. One useful factor to help when Measuring Appreciation in the LBI Real Estate Market is the absorption rate of homes in the LBI real estate market.The absorption rate tells us how many months of supply currently exists in the Long Beach Island real estate market assuming no other homes came on the market. Looking back over the last year we see that 12 months ago there were 25.1 months supply of homes on the market where as over the past 3 months there was only 21.5 months supply of homes. This points to a stronger market as a whole and greater demand from home buyers
Buying and Selling in the LBI NJ Real Estate Market
The LBI real estate market is viewed by most as an investment. While it is an investment that offers fun in the summer season, at the end of the day nobody wants to overpay for a property nor does anyone want to sell for a loss. Therefore, it is essential to understand Measuring Appreciation in the LBI Real Estate Market as well as measuring depreciation. It is only through understanding the LBI real estate market that one can make a smart investment. For more information about buying and selling in the LBI NJ real estate market as well as more information about the current real estate trends on Long Beach Island, please do not hesitate to contact me, Nathan Colmer, and I will be happy to help!
Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
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