Credit: Steve Reilly / pressconnects.com
Spring arrives this month, and with it, the spring selling season. In coastal New York, that means houses damaged by Sandy’s storm surge will be hitting the market in large numbers. And, like the surge itself, the wave is arriving early, reports the Long Island Business News (“Sandy-damaged homes hit market at bargain prices,” by Associated Press.
“New listings range from destroyed oceanfront properties being sold for the land, to flooded bayside homes untouched since the storm that must be gutted,” the paper reports. “Even the few undamaged homes in affected neighborhoods are listing at prices about 10 percent lower than they would have been pre-storm.”
Bank’s won’t touch a flood-affected home at this point, so most purchasers are investors with cash. And they’re asking tough questions about flood elevation requirements. Some transactions are low-ball deals involving ruined houses, or even bare lots where homes used to stand; but undamaged houses in the flood-stricken areas are also selling at a discount.
Newsday covers the story here (“Sandy victims selling ruined homes 'as is',” by Maura McDermott). “Experts worry that Sandy-damaged homes could -- at least temporarily -- drag down values of nearby properties and impede the still-anemic recovery of Long Island's housing market,” the paper notes.
And some are advising property owners to hold on and bide their time, if they possibly can. The impact of Federal aid is a big unknown for sellers, who may eventually be eligible for a government buyout at full pre-storm value — or at least for financial help with the cost of repairs and new elevation requirements.
And history teaches that a hurricane’s depressing effect on home values dissipates over time, according to the Newsday report. “The price impact of even a devastating storm tends to fade over time, say those who have studied earlier natural disasters,” the paper reports. “Such storms typically cause prices to fall by 10 percent, but that dip generally disappears within a few years, said Robert Simons, a professor of real estate and urban planning at Cleveland State University.”