Long Beach Island New Jersey Real Estate Market Predictions
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Two Reasons the LBI Real Estate Market is Not in a Bubble 
Two Reasons the LBI Real Estate Market is Not in a Bubble 
Two Reasons the LBI Real Estate Market is Not in a Bubble
Long Beach Island Real Estate
There is a lot of concern about a drastic fall in home values across the LBI real estate market and elsewhere. While we cannot entirely rule out this as a possibility, it is crucial to understand that the data and facts point to a very different scenario in the Long Beach Island and national real estate market. It is easy to conclude that the rapid rise in home values will lead to an equally dramatic price crash (i.e., a real estate bubble like we saw in 2008), but this is a very different market. There are two principal distinctions between this market and the market 15 years ago: inventory and lending standards.
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
Two Reasons the LBI Real Estate Market is Not in a Bubble
It is important first to understand why prices rose as quickly as they did in the Long Beach Island real estate market. There was significant (but not unprecedented) demand as buyers sought to leave the more congested areas, leading to a dramatic inventory level fall. The lower cost of borrowing money attracted investors and end-users alike. While inventory has started to increase, it is still well below what would be considered a balanced market. While it is true that interest rates have risen, they are still historically very low, and those borrowers who took advantage of lower rates are sitting in a solid financial position with little need to sell.
The number of homes for sale in the LBI real estate market needs around 6 months to be considered “balanced”. If there are more than 6 months of inventory for sale on Long Beach Island, prices will likely fall. If there are less than 6 months of inventory, prices are likely to rise or at least remain steady. At present, we are around 2-3 months of inventory. The number of homes for sale on Long Beach Island is driven by demand. Prices have been rising and likely will level off or keep rising (at a slower rate) because there is still a significant demand for homes in the LBI real estate market. While it is true that rates have risen significantly, they are still very low compared to a few years ago. While it is also true that the cost of owning a home in the LBI real estate market has jumped due to higher interest rates, the quality of borrowers on Long Beach Island has not changed. Unlike 2008, most borrowers in the LBI real estate market and nationally are in a much better financial position with a low-interest rate and a fixed-rate mortgage. In 2008, a number of shaky loans suffered from unaffordable adjustable-rate increases. That sadly led to a wave of foreclosures that seems unlikely to repeat. A real estate crash seems doubtful without that downward force on the market.
Long Beach Island New Jersey Real Estate Market Predictions
Nobody can predict the future of the Long Beach Island real estate market or begin to know where the top or bottom of the market is. All we can do is look at the data and look at history as a guide. The fundamentals of the LBI real estate market are very strong, demand remains high, interest rates are still comparatively low and inventory is well below the level needed for a balanced market. In short, there is a long way to go before we have to worry about a crash assuming things remain on this trajectory. 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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