Long Beach Island Oceanfront and Bayfront Home Supply vs. Demand
Simple economics states that if there is an abundance of a product (waterfront homes) and few consumers (Buyers) values will descend. It is when we reach an equilibrium that values become stable. When the product is scarce and the demand is high, values increase. During 2002, supply vs. demand ratio was the highest in 21 years, at 1.09 for oceanfront sales. The current supply vs. demand ratio of 0.115 on oceanfront is the lowest it has been since I began documenting data in 1992.
Bayfront property seems to be consistent with last year at 0.17. This is comparable to the ratios back in 1992 thru 1994, when prices were fairly stable and took a few years before seeing any appreciation. This is a substantial decrease in general and has proven sales have slowed down these last few years. Currently, there are 63 oceanfront and 45 bayfront single-family homes available for sale on LBI.
Our record low of 15 oceanfronts on the market was in 2002. Our high was 101 oceanfront homes available in 1993. The number of oceanfront sales has decreased from a high of 50 in 1999 to 23 in 2007, 21 in 2008 and only 14 in 2009.
With this minimal number of sales versus the number of waterfront properties available for sale increasing, it appears that prices may continue to decline. The most desirable and competitively priced waterfront homes will sell. Those that are overpriced will not.
