REMI offered its observations on Reuters’ examination of the possible consequences that Hurricane Sandy could have for the real estate market in areas affected by the storm, including a rise in rentals and delayed closing on new home sales; REMI is hopeful that Sandy will have minimal effect on the housing market, as home destruction by storms usually results in a reactionary boom in construction, which could help lift the market with the help of low mortgage rates and home prices.
Although there are varying opinions among experts in real estate agent marketing on what exactly Sandy’s effects on the marketplace will be, real estate professionals have been able to agree on some general consequences the storm is expected to have while the New York and New Jersey areas recover. First and foremost, rentals will explode in affected areas; not just vacation rental by owners, but lower-rent housing. These rentals will mainly be attractive to displaced homeowners and contractors who are looking for temporary housing while construction on new property takes place.
Another consequence expected is delays on scheduled closings. In the wake of the storm, banks may require fresh rounds of inspection and appraisal before granting mortgages, and buyers may try to renegotiate their loans in anticipation of higher insurance premiums. This is the most worrisome consequence of the hurricane, as stalling of sales deals may bring the real estate market’s recovery in the area to a slowdown.
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