Sandy’s Effect on NJ Housing Market [AUDIO]
Even before Sandy hit the Northeast, New Jersey was dealing with a weaker housing market than the rest of the nation. The storm washed away homes and severely damaged others, erasing any potential progress in a housing recovery for the time being.
The latest housing numbers already showed impact from Sandy; contract activity for October took a significant jump nationwide, but in the Northeast, it dropped.
“Major natural disasters, on a regional basis, do have a significant disruption in sales,” said Walter Molony, spokesman for the National Association of Realtors. “When we see the data coming in for November and December, we expect to see notably depressed activity.”
Without the storm, New Jersey’s housing market had the potential for a strong leap forward. Buyers had been on the sidelines for a few years, but a combination of steady job creation and increasing consumer confidence hinted at growth. Nationally, home sales should be up 9% in 2012.
“We have a huge disruption from Sandy. A lot of housing stock has been destroyed,” Molony said.
However, Molony said the period of disruption will be followed by a period of rebuilding. Once insurance money starts rolling in, a spike in home sales activity can also be expected. Folks can either choose to build in the same spot or buy property in an area that isn’t damaged.
At the shore, there is plenty of discussion about the rebuilding process.
“One of the issues is going to be the availability of flood insurance. If you can’t get flood insurance, you can’t get a mortgage,” Molony said, noting a series of Florida hurricanes that forced insurance providers out of the market. “You might see some areas that are actually returned to wetlands.”
He added, though, the Jersey shore has a strong appeal; people want to live there, and if they can, they will.