For some residential real estate brokers, when Hurricane Sandy hit, the deals stopped. And they have not yet picked up. Indeed, while much of the city and surrounding area has gotten back to business as usual, there are a handful of communities where, of course, that is not the case.
This month, as part of The Real Deal’s broader coverage of Sandy, we talked to brokers from three of those areas — the Rockaways in Queens, Staten Island and Hoboken in New Jersey — to see how they rode out the storm and how the hurricane has impacted their business in the last month.
What we discovered is that, along with the residents the storm left homeless and the damage it did to property and infrastructure, it also put the kibosh on the real estate market. Indeed, in areas like Breezy Point in the Rockaways, where 110 homes burned to the ground during the storm and in some of the low-lying waterfront neighborhoods on Staten Island, the market has ceased to exist.
“The residential sales volume in the affected areas is almost nonexistent,” said Mimi Neuhaus, founder of the Staten Island brokerage Neuhaus Realty.
Not only have buyers backed out of deals and closings been put on hold, but until homes are rebuilt there is little reason to believe that the market will restart.
There are two exceptions to that. The first exception is investors who have started sniffing around distressed homes with the intention of renovating and selling. The second is displaced families who are looking for short-term rental housing.
But the latter is already proving to be a challenge. “We do not have the inventory to house owners while they wait until their homes are rebuilt,” said Lisa Jackson of the residential brokerage Rockaway Properties.
Other longer-term concerns center on whether buyers will reconsider purchasing property in vulnerable waterfront areas and whether flood insurance will be available if they do.
Meanwhile, in Hoboken, which saw major flooding, the market seems to have bounced back quicker. The market there has picked up after a few slow weeks. But there, too, brokers have to deal with finding displaced residents’ rentals and have undergone a shift in thinking about the risk of flooding in ground-floor apartments. For more, we turn to our panel of experts.
director of sales, metro New Jersey, Halstead Property
What impact did the storm have on your properties and listings in Hoboken?
We were back on Nov. 5 with no flood damage to the office, but activity was slow [at first]. [Then it shot up] to previous pre-Sandy levels, but Hoboken has nothing on the market. There are less than 140 total properties available on the MLS. The market is strong. The storm gave pause, and the people that were displaced are snatching up what was available in rentals, which tightened the market.
From a business perspective, what is the greatest challenge you’ve faced in the wake of the storm?
Transportation is the biggest challenge. The Hoboken PATH station is still closed. Buses and ferries cannot absorb the traffic. There are people that are traveling three hours on the bus through the Lincoln Tunnel. The property damage is not detrimental enough to be permanent. There was no catastrophic flooding like at the shore.
What long-term impact do you think Sandy will have on the real estate market in Hoboken?
Right now, I think the impact is that it puts everyone on notice that this could happen again, and that will change how spaces are used, with the [location of utilities especially]. Hoboken was in demand before, so I don’t think it will hurt our market. I think some good will come out of it with improvements to designs … but it remains to be seen.
How is overall residential sales and rental volume in Hoboken now, compared to just before the storm and a year ago at this time?
It is very strong year over year, [but] there haven’t been enough closings. Last month, many closings did not take place that might have. There are a number of things on the market that we cannot show because they are being cleaned up and are put on hold. We are taking names and numbers of buyers or renters. As soon as we are cleared, we can move quickly to put them back on the market. The average time a house is on the market is below 55 to 60 days. We may see that tick up a little as units clear inspection.
Tuesday, December 04, 2012