Low Mortgage Rates in the LBI Real Estate Market
- High Tides Digital Marketing
- Feb 6, 2021
- 2 min read
Mortgages and Financing in the Long Beach Island Real Estate
Coronavirus has changed many things in the Long Beach Island real estate market. Low mortgage rates are one of them! Thanks to the US and foreign governments' economic policy efforts, we see interest rates so low that the money is almost free. This has led to a few changes in the consumer patterns of the typical consumer on Long Beach Island and raised some significant concerns.
We see fewer cash deals
Buyers are putting less money down
The lower interest rates have increased buying power despite higher prices
Low Mortgage Rates in the LBI Real Estate Market
Buyers and sellers in the LBI real estate market should be aware of the trends we are currently seeing. While the LBI real estate market has never been that sensitive to interest rates. They can and do have an impact on home prices and buyer patterns. In a "normal" market, the financing of a home purchase is split pretty evenly, with roughly half the deals being a cash and the other half being mortgaged. Today, we see far fewer cash deals as buyers look to take advantage of these low rates. Likewise, the amount down has fallen, with 20% being pretty standard these days. These trends raise a slight alarm as buyers are more leveraged than they typically would be. In many cases, the positive side of this is that buyers are choosing to put less down or not pay cash. This means they still have the funds they have had in the past; they are just using their funds differently. We have also seen higher prices in the LBI real estate market. While higher prices do customarily slow activity and eliminate some buyers, the lower interest rates have offset much of these increases. However, it is essential to remember that while the monthly payment may be the same as a year ago despite a higher price, if and when the home is sold, the higher price paid today may be an issue down the road. For this reason, buyers have to maintain discipline and understand what drives value in the LBI real estate market to safeguard their investment.
Mortgages and Financing in the Long Beach Island Real Estate
We are in every changing time, and the surprising trends of lower interest rates and higher sales prices are a perfect example of this. Now, more than ever, buyers and sellers have to understand what is going on and how it will impact their investment. Low mortgage rates in the LBI real state market have changed consumer behavior, and for those who understand this, an opportunity may well exist! 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
