Sandy Could Have Impact on Waterfront Housing Market

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The Real Estate Marketing Insider comments on reports in the New York Times that Hurricane Sandy may change zoning regulations and property values for waterfront housing in the Northeast.

The Real Estate Marketing Insider offered opinions on the New York Times’ Friday report that in the wake of Hurricane Sandy, some experts were forecasting changes in the market for waterfront housing. REMI believes that such changes could have a negative impact on the market, decreasing the availability of high-priced properties and stressing inventories in other price ranges.

New York Governor Andrew Cuomo said Wednesday that Hurricane Sandy, and the still-fresh memory of tropical storm Irene last year, showcased a need for the city to consider changes in infrastructure to prepare for future extreme weather. While experts in real estate and realtor marketing are foreseeing little long-term impact on property values, changes in zoning and urban-planning regulations, like those discussed by Gov. Cuomo, could change the market for waterfront housing.

Already, some real estate professionals in New York City were reporting decreased interest in waterfront property. High-end brokers have said that, especially in flooded areas like Battery Park City, appointments are hard to line up, and clients are rethinking long-term property purchases. One broker reported the scrubbing of a $1 million, year round rental in the Hamptons, after the buyer decided she wanted property further inland.

Some industry insider believe that the burden for selling waterfront property lies with developers, who should be outfitting existing properties (and building new ones) to meet standards for flood-prone areas. Among the amenities that have been suggested are generators for the event of power failure and drainage designed to properly deal with floodwater.

The Edge, a new residential complex on the waterfront in Brooklyn, is one example of a building with weatherproofing designs already in place. The Edge features eighth-floor generators to prevent flood damage, concrete reinforcement to baffle high winds, and high-set entrances to avoid rising water levels. Thanks to these measures, the Edge emerged from Hurricane Sandy without severe damage to the building.

Other experts maintain that despite a temporary drop in waterfront confidence, property values will return to normal before long. One appraiser observed that, although the market may experience some temporary setbacks, “the collective memory” is short and demand for waterfront properties would be back before too long.

REMI issued a statement following a report in the New York Times examining potential impacts of Hurricane Sandy on the market for waterfront properties in New York. The market is already showing a drop in interest in homes and apartments on the water, with at least one high-price sale reported to have fallen through. Experts observe that to assuage buyer worries about waterfront security, new properties should be outfitted with safety measures that can protect against extreme weather like Sandy’s.

About the Real Estate Marketing Insider: The Real Estate Marketing Insider provides real estate professionals with breaking news, online tips, and insider analysis. The online journal is based in La Jolla, CA

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