LONG BEACH ISLAND REAL ESTATE INVESTMENT

The COVID Market

2020 saw changes to our lives that few could have ever predicted. The LBI real estate market, and the national market, was no exception. Demand for homes skyrocketed, and prices surged as well. In many parts of the LBI real estate market, prices doubled in only 2 years. The desire to live and work at the beach, low-interest rates, and a general realization of the value in a home on Long Beach Island fueled demand to a level we rarely have seen in the past. It is fair to say that the COVID market ended in 2022, and while this was the shortest of the significant market events, it was and is among the most impactful. Balance has returned to the market, but demand remains exceptionally high. Inventory levels in the LBI real estate market are at one of the lowest levels since data has been recorded, and this, coupled with the still very high demand from buyers, is likely to keep home prices stable, if not increase. Throughout 2022, even as mortgage rates rose, home prices increased as well, with the average home trading about $200,000 higher from the start to the end of 2022.

Hurricane Sandy

Hurricane Sandy, which made landfall at the end of October 2012, had a monumental impact on the local LBI real estate market. Hurricane Sandy brought flood insurance issues to the forefront and prompted a wave of new construction, which persists even today. 2012 showed renewed strength in the sales market with 373 homes selling with an average price of $939,000. This is particularly encouraging when we consider that two months of the 2012 real estate market were all but lost to Hurricane Sandy! 2013 initially suffered from Hurricane Sandy as the LBI real estate market got off to a slow start. However, the market rebounded as clarity emerged around flood insurance, rebuilding and LBI was open for summer 2013. 2014 and 2015 both showed very positive home sale numbers with 2015 being one of the best years on record up to that time. Both the number of homes sold and the average sale price had substantially increased. The LBI real estate market continued to show strong and stable growth year after year, with the market increasing around 15% between the "end" of the Hurricane Sandy market in 2014/2015 through 2020.

The Great Recession

In the pre-2008 real estate market, before the crash, most economists would agree that 2006 was the height of the real estate market on LBI and elsewhere around the country. For the year 2005-2006, 451 single-family homes sold in the LBI real estate market with an average sale price of about $1,121,000. Homes sold in an average of 116 days. In 2010 and 2011, which historically was the low point in the market, the average sale price was about $1,015,000 and $950,000, respectively. Homes on LBI did sell slower, with an average of about 175 days on the market. Looking at the data, it is clear that home prices fell from the height of the market but that the decrease in the average sale price on LBI is far less than other markets around the country.