March 11, 2013

Sandy-damaged homes hit market at bargain prices

Buyers are wading into a host of potentially expensive uncertainties about new flood maps, future insurance rates and updated building codes.

By EILEEN AJ CONNELLY/The Associated Press

LONG BEACH, N.Y. — It sounds like the premise for a new reality TV series: "Hurricane House" – people scouring waterside communities looking to buy homes damaged by Superstorm Sandy at a deep discount.

click image to enlarge

This Oct. 30, 2012, file photo shows an aerial view of the damage to the shoreline and the houses in Mantoloking, N.J., the day after Superstorm Sandy. A rising number of homes damaged by Sandy are hitting the market – ranging from 10 percent off pre-storm prices for upscale homes in New York's Long Island and the Jersey Shore to up to 60 percent off modest bungalows in Staten Island and Queens – but it's very much a game of buyer beware.

Air Force Master Sgt. Mark C. Olsen via The Associated Press

click image to enlarge

A storm-damaged beachfront house is shown in the Far Rockaways section of the New York City borough of Queens in January. Homeowners shaken by their Superstorm Sandy experience are putting their homes on the market, sometimes for rock-bottom prices.

2013 File Photo/The Associated Press

While there are bargains out there, ranging from 10 percent off pre-storm prices for upscale homes on New York's Long Island and the Jersey Shore to as much as 60 percent off modest bungalows Staten Island and Queens, it's still very much a game of buyer beware.

Not only are buyers are on the hook for repairs and, in some cases, total rebuilds, they're also wading into a host of potentially expensive uncertainties about new flood maps and future insurance rates, zoning changes and updated building codes.

"It's totally changed the way I sell real estate," said Lawrence Greenberg, a sales associate with Van Skiver Realtors, whose own Mantoloking, N.J., office was wrecked in the storm.

Prior to Sandy, prospective buyers rarely mentioned issues such as flood maps and building elevations until the matter of flood insurance came up – often at closing. "Now, everybody asks the question of elevation," Greenberg said.

Even if potential buyers plan to tear down and build new, they ask about the pending changes in flood maps proposed by the Federal Emergency Management Agency, because flood insurance rates will depend upon the new zones.


There is no sign of a mass exodus from shoreline communities. The number of for-sale listings in January in the 380 zip codes hit by the storm was about 2 percent below the same time last year, according to online real estate information company Zillow Inc. That indicates that most homeowners are rebuilding, or have not yet decided how to proceed.

But real estate agents in New York and New Jersey say the majority of homes for sale in these areas have some damage from the Oct. 29 storm, and it appears to them that a rising number are being put on the market as the spring home-buying season approaches.

New listings range from destroyed oceanfront properties being sold for the land, to flooded bayside homes untouched since the storm that must be gutted. Even the few undamaged homes in affected neighborhoods are listing at prices about 10 percent lower than they would have been pre-storm.

Some sellers are overwhelmed by the daunting prospect of restoring a damaged home. Some are older homeowners who had stayed in the houses where they raised their families, but now are relocating. Some didn't have flood insurance.

"They either don't have the funds or don't have the energy to go through the renovating and rebuilding process," said Jeff Childers, a broker with Childers Sotheby's International Realty in Normandy Beach, N.J.

Lisa Jackson, broker and owner of Rockaway Properties in the Belle Harbor section of Queens, N.Y., said a number of her new listings are homes owned by senior citizens. One 85-year-old client was living alone in her 1940s-era six-bedroom, six-bath brick home right on the beach. The house was hammered by Sandy, and must be at least partially demolished, but will still command a hefty price. "Everything on the water is big money," Jackson said.

But the $3 million listing price is nevertheless a huge discount from the roughly $4.25 million it would have commanded before the storm.


Another set of sellers was in the process of getting out before the storm hit. Jackson had 18 properties in contract prior to Sandy, but all of those sales either fell through or were renegotiated for a lower price.

One 1930s-era three-bedroom, two-bath house with a view of the bay was in contract for $665,000, but the entire first floor was gutted after it took on about four feet of water. The buyer, a single woman, was unwilling to take on the renovations. The property is back on the market for $550,000. That's a 17 percent discount, but the eventual buyer will have to pay for new floors and walls, plus a new kitchen and bathroom.

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