Budgeting For Renovations in the Long Beach Island Real Estate Market
Hurricane Sandy forced some significant changes to the Long Beach Island real estate market. With such widespread damage, many homeowners were forced to renovate, raise, rebuild, or simply sell and walk away from their homes. While the process was difficult for many, the end results were very positive. These new, and rebuilt homes are more storm ready and will be better able to withstand future hurricanes. Even though Hurricane Sandy has passed, many homeowners on Long Beach Island are still faced with the question of whether they should renovate, rebuild or sell in the LBI real estate market, even if their home suffered no damage from Hurricane Sandy.
Renovate, Rebuild or Sell in the LBI Real Estate Market
For a homeowner in the LBI real estate market looking to make a change, there are three paths they may take:
- Renovate, which may include raising a home above base flood elevation
- Teardown the existing structure and build a new home
- List a home for sale in the LBI real estate market as is
Renovating a home offers the advantages of a lower upfront cost to complete a project. It is important to understand the 50% rule, which simply states that if the home is improved more than 50% of its replacement value it must be raised above base flood elevation. While many homes on Long Beach Island are already above base flood elevation, this is a important number to be aware of. Building a new home in the LBI real estate market will be more expensive, but the end result will be worth more. In either case, renovating or rebuilding, it is important to not over improve the house for the location. By this I mean if the cost of the product plus the land value exceeds the current market value finished product, it would be advisable to reconsider the options. Selling a home is a complete exit from the Long Beach Island area, but in some cases this may be the best option. Renovating or rebuilding a home is a major undertaking and more than some people wish to become involved with. In these cases, it makes sense. Likewise, if the cost of improvements exceed the value of the finished home, selling is a viable option. Like anything, it is best to explore all avenues determine what is right for your specific situation.
Changing the Face of the LBI Real Estate Market
Long Beach Island has undergone a massive transformation since Hurricane Sandy. This is also transformed the dynamics of the LBI real estate market. Homes that are below base flood elevation are now a much harder home to sell as fears of flood insurance still prevail. It is highly likely that the eventual fate of these homes, especially when they are 2 feet or 3 feet below the new base flood elevations, will be to either raise or rebuild. If the funds for the time of not available, these homes will most likely be sold to others willing to undertake the project. For more information about reasons to renovate, rebuild or sell in the LBI real estate market, contact me and I will respond right away.
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | firstname.lastname@example.org