In the days following Hurricane Sandy, I immediately began to hear the whispers about the storm's effect on Manhattan real estate values. There is no shortage of predictions or opinions. I've read articles which claim that downtown values will no doubt suffer as the idea of flooding & electrical/heating problems looms fresh in the minds of tenants and buyers . There are others who insist that the demand for downtown properties remains strong, while the storm has decreased the already low inventory numbers. Whatever side of the coin you're on, you can't deny that a storm which left approximately 40,000 people without homes and about 130 buildings uninhabitable will have a tremendous impact on the real estate market.
With 40,000 people left suddenly homeless, agents and brokers are scampering to accommodate the need in the already tight rental market. While some experts think buyers and renters will be deterred from the downtown market by their recent Hurricane Sandy experience, agents on the ground report downtown demand to be as high as ever. Consumers may not be too concerned, but mortgage banks are now on high alert when it comes to flood zones. Lenders are now re-appraising properties all over Manhattan, even with an already reviewed pre-Sandy appraisal. In some cases, it is just a "drive-by" to make sure the building is still standing and undamaged, in others a whole new report has been required, delaying transactions. With already tight credit guidelines, it'll be interesting to see how this develops in the weeks ahead.
Another way to look at all this is that the storm has actually caused a surge in NYC housing demand while simultaneously decreasing already low inventory. I am also sure we will see new and existing buildings going back to the drawing board. Going forward, Mechanicals will no longer be in basements, but now on the second floor or higher. At the end of the day there are many setbacks and monies lost and monies that will need to be spent to get everything operating at full capacity again. Let's hope these buildings and owners had the right insurance policies.
How about you? Has the hurricane changed which neighborhoods of NYC you are willing to live in? I'd love to hear your thoughts, leave me a note in the comments or email toni@elliman.com.