Let’s take a look at the statistical anaylsis of data and general trends to answer the question.
Statistical Analysis of 2009 LBI Oceanfront Single Family Home Sales
The average sale price of oceanfront property on Long Beach Island in 2009 has decreased in value approximately 8% since the peak years of 2004-2006. With limited sales activity and a low supply/demand ratio, it appears the value of oceanfront property may continue to decline. The most desirable and competitively priced waterfront homes will sell. Those that are overpriced will not.
The types of oceanfront properties that have sold vary by year, causing the sales market to fluctuate since values are not based on sales of comparable oceanfront properties. For example, in 2006 many oceanfront homes that sold were new construction. In 2007, the majority of oceanfront properties that sold were teardowns, creating a decline in values. New construction holds a high value as opposed to a building that will be torn down, which holds zero value.
In 2008, the sale of oceanfront property in North Beach, Loveladies, and on oversized lots in Barnegat Light increased the average values for two reasons. The majority of homes were newly constructed and the north end location also holds the highest land values on LBI. These sales created a higher than average sale price for oceanfronts than expected in 2008.
Once again, in 2009, we have North end properties selling. Surf City is breaking the curve for oceanfronts in the center of LBI (no single-family sales in Ship Bottom and Brant Beach). With only fourteen oceanfront sales in 2009, it is hard to see what values have really done. With so many sales in Surf City, the average sale price for 2009 was higher than normal.
Statistical Analysis of 2009 LBI Bayfront Single Family Home Sales
The 2009 average bayfront sale price appears to be showing us how much we have actually depreciated since the peak years of 2004-2005. Our average price has declined approximately 20% since those peak years. The volume of sales during 2009 was consistent with those of 2008 on bayfront property.
For property on the bay, the data shows the average sale prices each year are as follows: $1,575,763 in 2004, $2,413,619 in 2005, $1,718,470 in 2006, $1,986,444 in 2007, $1,971,347 for 2008, and $1,669,938 for 2009.
Most Buyers are excited that they are able to afford a vacation home on LBI and are more likely to purchase a property if the Seller is asking a fair price reflective of the present day market value. Sellers may be more motivated and negotiable since the number of oceanfront homes for sale is increasing.
Waterfront property is very desirable and also very limited. Long Beach Island value is in the land and with the decline in real estate sales comes an adjustment in land values. The real appreciation and depreciation lies in the value of the land.
The 2009 LBI Statistical Data and Charts demonstrates that the Long Beach Island Waterfront Average Sale Prices increased overall over time including the recent decreases reflective of the economy in these past several years.
A good investment does not come without risk. Investments are made to be able to enjoy the benefits they provide and also to be able to pass on the advantages to family in the future. If an investment today in Long Beach Island Waterfront real estate enables you and your family years of enjoyment on LBI and provides the gain from the initial investment that can be rewarded to family in the future then the risk was worth it.
If you are fortunate enough to have owned your home for a number of years, you will certainly see a significant profit from your initial investment.
Please share your thoughts and experience in the comments below.