Where LBI Real Estate Market Prices Are Heading

Where LBI Real Estate Market Prices Are Heading

Appreciation and Depreciation in the Long Beach Island New Jersey Real Estate Sales Market

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Long Beach Island Real Estate

All buyers and sellers in the LBI NJ real estate market are aware that the market has changed. As interest rates have increased and the national media has called into question the national economy as a whole, anyone looking to enter into a transaction is wondering where LBI real estate market prices are heading. There are many different opinions on this subject, and the truth is, nobody really knows. Some current and past trends in the Long Beach Island real estate market may help us make predictions, and the broader market sentiment is also a helpful gauge.

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

Where LBI Real Estate Market Prices Are Heading

It seems like you can ask 10 different people what the future of the LBI real estate market will be, and you will get 11 different answers! Some predict prices will continue to rise, albeit at a slower pace, and others predict a drop in prices. Some call for a minor decrease of a few percentage points, while others foresee a 20% decline in home prices. This variation in responses is a common occurrence in an uncertain market. We can examine a few data points to help make a more accurate, fact-based decision. 

  1. Past Sales Data: This is not the first time prices have fallen in the LBI real estate market. The most recent and memorable time was when the overall real estate market crashed in 2008-2010. The LBI real estate market showed resilience during this time period. In 2006 the average sales price on Long Beach Island was $1,060,000 (rounded). In 2008 it was $995,000, and in 2011 (often seen as the bottom of home prices on LBI) it was $869,000. This represents a drop of around 20% from the high to the low, but we should remember that this was a real estate-fueled recession with risky lending standards and reckless behavior. The past 2 years have been very different with far more responsible lenders and buyers who have low, fixed rate mortgages. 
  2. The core market data on Long Beach Island is still strong: Inventory is very low, one of the lowest points in the history of recent home sales on Long Beach Island. While the number of homes in the LBI real estate market has been seeing small gains, we are a long way from what is considered a “balanced” market. Until we see a significant increase in inventory, it is difficult to see a path where prices dramatically fall. 
  3. Buyer confidence is still very high: Since the federal government began increasing interest rates, we have seen an average of between 10 and 15 homes per week go under contract. This is robust market activity and while some buyers have likely dropped out of the market, there seems to be no shortage of interested parties. 

As I mentioned above, nobody knows what the future of the LBI real estate market will be over the next several months. My personal prediction is that prices will remain more or less flat this year and then return to a more standardized rate of appreciation in the next 12-18 months. It is reasonable to expect a small drop in prices, something in the order of 5%, but there are also arguments to be made that there will not be a drop in prices and that they might rise in the LBI real estate market slightly! I doubt we will see any drop greater than we did in 2008-2011, and most likely not even that. 

Appreciation and Depreciation in the Long Beach Island New Jersey Real Estate Sales Market

If you are considering buying or selling in the LBI real estate market, you must balance home prices’ unknown future with your needs. There is no doubt that the Long Beach Island real estate market is shifting to a more balanced market, but a crash appears unlikely. There is value in every market, and with patience and discipline, buyers and sellers alike can find the opportunities that exist on Long Beach Island. 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

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