Inside the Current New York Real Estate Market | Assurance

Long Island City waterfront real estate may be impacted by Superstorm Sandy

Most of the luxury high-rises along the western Queens waterfront didn?t flood or lose power ? but they may be the latest victims of Superstorm Sandy.

Potential buyers, insurers and banks may now be reluctant to invest in prime Long Island City real estate located in hurricane evacuation Zone A, real estate experts said.

But the same experts also said they doubt the market will suffer a debilitating long-term slump, citing the lure of waterfront living and the short memories of buyers.

?What [Sandy] may do is slow down sales activity in harder hit areas,? said real estate appraiser Jonathan Miller. But if a storm of this magnitude ?happens again in short order, then all bets are off.?

The storm may also make it harder for developers to secure financing to build in evacuation zones. It also might become increasingly difficult for buyers to obtain mortgages and home insurance in those areas, he said.

?Lenders are generally afraid of their own shadow,? Miller said. ?So they?re looking for reasons not to lend.?

Rosemary Scanlon, dean of New York University?s Schack Institute of Real Estate, said the market will rebound.

?The fears were widespread that people would move out of New York? after 9/11, she said. ?It didn?t happen.?

But buildings ? especially in Zone A ? will need to be constructed differently, she said. Boilers and electrical equipment may need to be moved to higher floors, generators may become standard and towers may now be built further from the shore.

?Building on the waterfront was considered to be a great idea until the storm came,? she said.

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Manhattan real estate market in good health; momentum continues

The market keeps showing its good health and more specifically at its two opposite ends: the entry level segment and the luxury segment.

The statistics are clear. According to Miller Samuel appraisal firm, the market share of studios and one bedrooms sold rose from 51% in the third quarter of 2010 to 55% in the third quarter of 2012. At the same time, three (or more) bedrooms sales went up from a share of 13% to 15%.

That means that two bedrooms sales volume declined from 37% to 29%. The decreasing affordability of Manhattan rentals, coupled with the fact that entry level buyers are usually the first to respond to falling interest rates, is pushing renters to become buyers.

At the upper end of the market, international investors help selling out NYC most sought after luxury dwellings.

Local lenders have been consistently gaining market share. For example Investors Bank, based in New Jersey, had its strongest month to date in June 2012 when it produced its largest loan volume. The bank?s commercial loan portfolio has grown from $700 million in 2008 to today?s $3 billion.

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Hurricane Sandy Aftermath: How It Affected New York Real Estate

New York Real Estate Market Affected by Sandy

Hurricane Sandy destroyed thousands of homes in the Northeast, reportedly inflicting as much as $50 billion worth of damage and sparking a slew of relief efforts aimed at providing housing aid for storm-affected victims.

But along with putting many homeowners? lives on hold, Hurricane Sandy also brought housing sales in hard-hit regions to a screeching halt, highlighting how a disaster can delay or altogether derail real estate activity in affected markets.

Sandy?s impact on real estate activity ?went unbelievably far,? said George S. Wonica, a Realtor based in the New York City borough of Staten Island, one of the hardest-hit regions. (Pictured above is one home damaged by Sandy in the Staten Island neighborhood of New Dorp.)

By outright destroying some homes for sale, the storm sank a number of deals in a flash. Since storm damage to a home can significantly drive down its value, both lenders and buyers have reason to want to put the brakes on a deal following a disaster.

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Source: http://armsofassurance.com/inside-the-current-new-york-real-estate-market/

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