In post-Hurricane Sandy New York City, the looming question remains: what will happen to the Lower Manhattan residential market in the wake of the flooding? As the New York Times reported, the jury is still out, but one thing is certain: buyers and banks are feeling skittish, for now.
The storm hit luxury buildings downtown harder than their less-tony counterparts, the Times noted, which has brokers scared that just a few sales at lower-than-expected prices could topple the Downtown market, which already has to compete with more established neighborhoods for high-end buyers.
And, not at all surprisingly, banks are not jumping to finance homes in damaged buildings.
“The scope of the storm was so broad that [banks] really needed to do something quickly to keep the real estate market moving,” Melissa Cohn, a broker at the Manhattan Mortgage Co., told the Times. But still, “no bank will finance in a building that has had storm damage.” Some banks request photos, while others demand inspections before originating mortgages in damaged buildings.
But despite what could become a dip in the Downtown market, brokers believe the area will eventually recover, as it did after the 9/11 attacks.
“People will come back downtown,” Cohn said. “If property is priced properly, then they will be there.” [NYT] –Guelda Voien