Sandy’s Effects on Real Estate in New Jersey are Varied
The Real Estate Marketing Insider offered its observations on Reuters’ examination of the possible consequences that Hurricane Sandy could have for the real estate market in areas affected by the storm, including a rise in rentals and delayed closing on new home sales; REMI is hopeful that Sandy will have minimal effect on the housing market, as home destruction by storms usually results in a reactionary boom in construction, which could help lift the market with the help of low mortgage rates and home prices.
Although there are varying opinions among experts in real estate agent marketing on what exactly Sandy’s effects on the marketplace will be, real estate professionals have been able to agree on some general consequences the storm is expected to have while the New York and New Jersey areas recover. First and foremost, rentals will explode in affected areas; not just vacation rental by owners, but lower-rent housing. These rentals will mainly be attractive to displaced homeowners and contractors who are looking for temporary housing while construction on new property takes place.
Another consequence expected is delays on scheduled closings. In the wake of the storm, banks may require fresh rounds of inspection and appraisal before granting mortgages, and buyers may try to renegotiate their loans in anticipation of higher insurance premiums. This is the most worrisome consequence of the hurricane, as stalling of sales deals may bring the real estate market’s recovery in the area to a slowdown.
Experts also predict that investors will try to poach property going for cheap post-storm, but that few realtors or homeowners will take the bait. History of areas hit by coastal storms – for instance, South Carolina post-Hugo – shows us that home values tend to take a sharp rise following hurricanes, which property owners may be counting on.
Finally, examining history can lead experts to conclude that destroyed properties will become new lots for construction of homes with more weather-resistant features. Investors might be on the lookout for totaled homes to buy the lots and build, and those homeowners who don’t sell might repair damage to structures like kitchens and roofs; this means a busy season for construction and contractors, which may help to mitigate any losses in sales due to Sandy.
The Real Estate Marketing Insider released its observations on a report in Reuters of possible consequences to the real estate market that could come from Hurricane Sandy’s destruction of the New York and New Jersey area. REMI is optimistic that between increased activity for construction and contracting and an influx of rental activity, the net effect on the area’s real estate market will be minimal.
The Real Estate Marketing Insider is an online periodical that provides hot tips, breaking news and trend analysis to real estate professionals. REMI is based in La Jolla, CA.