Long Beach Island Real Estate Investment

​

The LBI Real Estate Market: 2006-Today

​

When looking to buy a home on Long Beach Island, it is helpful to understand where the market has traded and how circumstances have impacted home prices. The LBI real estate market can be examined in the context of historical events, each with a distinct effect on market dynamics, buyer behavior, and home prices. 

 

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. In 2005-2006, 451 single-family homes were sold in the LBI real estate market, with an average sale price of about $1,121,000, and homes sold in an average of 116 days. In 2010 and 2011, which were historically the market's low points, the average sale price was about $1,015,000 and $950,000, respectively. Homes on LBI did sell more slowly, with an average of about 175 days on the market. Looking at the data, it is clear that home prices fell from the market's peak, but the decrease in the average sale price on LBI is far smaller than in other markets around the country. 

 

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 sold at 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 regarding flood insurance, rebuilding, and that LBI would be open for the summer of 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, stable growth year after year, rising by around 15% from the "end" of the Hurricane Sandy market in 2014/2015 through 2020.

 

The COVID Market

​

2020 saw changes to our lives that few could have ever predicted. The LBI real estate market and the national market were 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 of a home on Long Beach Island fueled demand to a level we have rarely seen before. 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 of the year to the end. 

 

Over the last 20 years, home sales on LBI have been steadily increasing, with naturally occurring dips, adding to the argument that the LBI NJ real estate market is a smart investment. More recently, the LBI real estate market has been experiencing steady growth. New construction has been taking place all over LBI, which helps to improve property values in all facets of the market. The demand for the LBI real estate market, the solid rental season, and the overall stable history of Long Beach Island are likely to keep the market in good standing.

 

The LBI Real Estate Market: Why LBI Real Estate Makes a Good Investment

​

The LBI real estate market has dramatically improved over the past two decades. While past results cannot guarantee future performance, it is encouraging to note that this improvement has been achieved even in the face of adversity. Below are the average sale prices of single-family homes on LBI from 2000 through last year. Note that 2013 had a lower average sales price because it includes storm-damaged homes, which were sold as vacant land rather than as single-family homes. This is noteworthy because these homes needed to be rebuilt, which is an expensive undertaking, so even though the average sales price was lower, the capital investment was much higher:

2000-$416,000

2001-$483,000

2002-$591,000

2003-$750,000

2004-$833,000

2005-$1,041,000

2006-$1,121,000

2007- $965,000

2008- $1,000,000

2009- $875,000

2010- $1,015,000

2011-$951,000 (300 Closed Sales)

2012-$939,789 (374 Closed Sales)

2013-$903,366 (318 Closed Sales)

2014-$975,051(380 Closed Sales)

2015-$1,027,057 (429 Closed Sales)

2016-$990,155 (475 Closed Sales)

2017-$1,106,290 (541 Closed Sales)

2018-$1,116,102 (491 Closed Sales)

2019-$1,156,962 (496 Closed Sales)

2020- $1,322,376 (722 Closed Sales)

2021-$1,438,414 (651 Closed Sales)

2022-$1,926,465 (352 Closed Sales)

2023-$2,075,672 (321 Closed Sales)

2024-$2,312,465 (332 Closed Sales)

2025-$2,499,984 (275 Closed Sales Year to Date)

 

From an investment standpoint, this data reflects only the average increase and decrease in LBI real estate's value and does not account for carrying costs or any rental income that could have been earned over these years. It also does not take into account all the fun and memories made from owning a beach house!

​

The LBI Real Estate Market: Foreclosures and Bank Properties on LBI

​

The LBI real estate market has a very low number of bank-owned and foreclosed properties compared to other national markets. Bank involvement in a sale in the LBI real estate market can be broken into the following categories:

Pre-Foreclosure

Foreclosure

Bank Owned

 

The low number of foreclosures and distressed sales has helped to keep the LBI real estate market strong. Without a glut of bank inventory to drag down the market, sale prices have remained stable. If you would like, you can view a list of all bank properties and foreclosures on LBI by visiting my page dedicated to short sales, bank-owned properties, and foreclosures, but be forewarned, this is a watch list, and the vast majority of these homes will never actually come to the market. Rather, their owners will resolve whatever issue triggered their inclusion on this list.