Cody Buck rebuilt his home in Sayreville, New Jersey, after Hurricane Irene knocked it down last year. Yesterday, Buck showed New Jersey Governor Chris Christie how superstorm Sandy destroyed the house again.
“I think, governor, we need to level the whole neighborhood, give everybody a check and get out of here,” Buck said, according to a pool report by journalists covering Christie’s tour of the hurricane-racked state.
Sandy’s brutal arrival Oct. 29 was the latest blow to homeowners in New Jersey, where foreclosures continued to rise and real estate prices to fall after most of the U.S. housing market began to recover last year. The Atlantic storm claimed eight lives in New Jersey and drove 6,329 people to shelters. About 2.05 million residences and businesses, more than half of those in the state, were still without power at 2 p.m., according to the U.S. Energy Department.
“New Jersey was a laggard before the storm even came along and the storm won’t help,” Sam Khater, deputy chief economist for CoreLogic Inc., a real-estate information service, said from his office in Tysons Corner, Virginia.
An estimated 75,300 homes valued at $22.6 billion along the New Jersey coast were in Sandy’s path, according to an Oct. 29 CoreLogic report. That included more than 20,000 properties worth $4.8 billion in the Atlantic City area, where Sandy destroyed part of the boardwalk and amusement rides.
Infrastructure projects can give a shot in the arm to disaster zones, such as New Orleans, where the Army Corps of Engineers spent $14.5 billion on new levees after Hurricane Katrina overwhelmed the area’s storm defenses in 2005.
Storms also force stricter building codes, which raise property values, said Don Epley, director of the Center for Real Estate Studies at the University of South Alabama in Mobile.
“Some of the locals here joke that we need a good hurricane every few years,” Epley said in a telephone interview. “It cleans out the old stuff.”
Eqecat Inc., a provider of catastrophic risk models, doubled its previous damage estimate to as much as $50 billion in total property losses, with $10 billion to $20 billion of that covered by insurance, the company said today.
Reis Inc. (REIS), a real estate research firm, gave a preliminary estimate of $30 billion to $40 billion in total damage from Sandy. The New York-based company valued reconstruction efforts at $25 billion to $30 billion in its Oct. 30 calculation. That would result in a $10 billion to $15 billion economic loss, Reis said.
Storms with the force of Sandy have the power to reshape real estate for years, Eqecat President Bill Keogh said yesterday in a telephone interview from his vacation home in Litchfield, Connecticut, where he sought refuge after the power went out in his Hackensack, New Jersey, office. Damaged homes owned by delinquent borrowers may cause lingering blight if neither the owner nor the lender has resources for repairs, he said.
“It could also improve the value of some homes,” Keogh said. “The house that used to be two blocks from the water is now on the beach.”