The Long Beach Island real estate market has experienced many changes since the impact of Hurricane Sandy the end of October 2012. Hurricane Sandy brought to light issues such as flood insurance, house raising, and the vulnerability of Long Beach Island to hurricanes. That said, there have been many positive results from Hurricane Sandy which have helped to strengthen the LBI real estate market and create a more storm ready community. In short, LBI real estate after Sandy is doing very well!
There have been three main areas of impact after Hurricane Sandy. They are:
Hurricane Sandy created some excellent buying opportunities in the LBI real estate market. These opportunities present themselves in several ways. There are still storm damaged homes which may be purchased for land value and a new home built in their place. This can be highly advantageous for those looking to build a new home on Long Beach Island as a buyer will not have to give any financial consideration to the existing structure. Many homes were renovated in the wake of Hurricane Sandy which has helped to create more “move-in ready” homes. This is important as many buyers in the LBI real estate market will shy away from a major renovation project given the distance between the primary residence in your vacation home.
The national flood insurance program has been in existence long before Hurricane Sandy however it was rarely utilized on Long Beach Island and to a degree has slipped into obscurity. Hurricane Sandy caused such widespread damage that the entire population of Long Beach Island received a crash course in flood insurance. This is helped many homeowners to improve their properties and make them more storm ready. This includes raising a home above base flood elevation, building a new home, and taking preventative measures to limit the impact of future storms. In addition, Long Beach Island as a whole is taking steps to limit the impact of hurricanes and tidal flooding. A massive, island wide beach replenishment project is in the works which will help to serve as a first line of defense against future storms.
Building a new house on Long Beach Island can be an excellent investment and can realize immediate equity in the LBI NJ real estate market. There are still some excellent opportunities with storm damaged homes on LBI as well as non damaged knock downs but it is important to remember that when Rebuilding After Hurricane Sandy on LBI, building to the new flood codes will lessen the risk of damage from future storms and lower your costs of flood insurance. There are some important points to consider when Rebuilding After Hurricane Sandy on LBI:
Perhaps the question on most everyone’s mind is with regards to flood insurance costs and if these costs will negatively impact the value of the Long Beach Island real estate market. The truth is, flood insurance rates are very affordable in most cases and by no means does a house have to be raised to obtain flood insurance. Flood insurance rates are based on the combined elevation of the ground above sea level and the structure’s elevation. Most homes on Long Beach Island are, at worst, 2 -3 feet below the Base Flood Elevation or BFE (after combining the ground elevation with the property’s foundation) established by FEMA and these homes will see a comparatively minor increase in their flood insurance. Given the reality of flood insurance, it does not seem to be the specter that many believe it to be and will therefore have minimal, if any, impact on the Long Beach Island real estate market valuations. Exceptions do of course exist, for example homes that have a basement (and believe it or not there are homes on Long Beach Island that have basements!) so it is best to speak with an insurance agent about a specific property to understand what unique characteristics may exist.
Let me begin by saying that not every house on Long Beach Island NJ needs to be raised. This, above all else, is perhaps the biggest falsity concerning House Raising on Long Beach Island New Jersey. FEMA has established a Base Flood Elevation or “BFE” for all properties on Long Beach Island. This is the level above sea level to which FEMA recommends a new house be built to or a house be elevated to should a major renovation take place. The BFE is computed by adding the natural elevation of the ground above sea level with the elevation of the structure. For example: