In the year since Hurricane Sandy slammed into New York City, the real estate industry has paid close attention to the housing located within flood zones, examining how the extensive storm damage and rising insurance costs have affected the market. The market gurus over at StreetEasy put together a comprehensive report that reveals how quickly the market reacted to the storm, how it recovered, and which neighborhoods fared the best. They looked at data from all five boroughs, comparing market activity in Zones 1 and 2 (those most in danger of flooding) to the rest of the zones. The report, called "A Tale of Two Recoveries," found, according to StreetEasy analyst Alan Lightfeldt, that neighborhoods stands in stark contrast to the dramatic declines in prices and transaction volume in some of the hardest hit communities in the outer boroughs."
Immediately after the storm, closings declined in every borough, but overall, closings increased 64 percent in Manhattan Zones 1 and 2 from the same period in 2011. In the Financial District, where dozens of buildings were inundated with flood waters and without power for weeks, closings have increased 44 percent since the quarter before the storm and median prices are up 15 percent. The story is similar in Tribeca, where prices have increased 37 percent since pre-Sandy numbers. The Wall Street Journal highlights the new condo conversion 250 West Street as a prime example. Closings were underway when Sandy flooded the building's basement, but the building is nearly sold out. The penthouse will soon be re-listed for $39.5 million, not much less than the pre-storm price of $42 million. (The building's basement has since been made waterproof, not that it's an issue for the penthouse).
The outer boroughs, on the other hand, are still trying to regain their footing. Sales in Breezy Point, Queens, where hundreds of houses were completely destroyed, increased 25 percent from before the storm, but prices dropped by nearly 30 percent, which shows that even if one family doesn't want to rebuild, someone else clearly does. One real estate agent in the Rockaways told the Journal that the low prices are luring back families who were previously priced out of the area. Many residents in the area are also more concerned about rising insurance rates rather than another storm.
As a whole, the data shows that the market has strengthened and started to stabilize, even in hard hit areas in Staten Island. Median sales prices were down 43 percent in Q2 or 2013, but by the end of the third quarter, they were only down 24 percent, compared to where they were before Sandy. Sales are still down about 4 percent in Brooklyn, but the record low inventory is also a factor.
· A Tale of Two Recoveries [StreetEasy]
· Real-Estate Prices Begin to Firm Up in Areas Hit by Flooding [WSJ]
· All Hurricane Sandy coverage [Curbed]