Frankenstorm: a real monster for the recovering Real Estate?

It’s been a great year for the US real estate, crawling its way back from the dark slump to finally regaining the strength it once had. But natural calamities seem to be out of everyone’s control and as the biggest tropical gale Hurricane Sandy hit the Atlantic seaboard, the real estate industry is yet to experience a huge setback from property damage and flooding.

The Frankenstorm, a seemingly appropriate moniker since it was expected to hit just after Halloween weekend, affected Eastern coastal states that account for about one out of every five U.S. real estate sales and threatened inland areas with flooding and blackouts.

Bloomberg website news thoroughly showed the statistics on what the US real estate would look like after the hurricane.

PROPERTY DAMAGE

Almost $88 billion of homes in seven states were at risk of damage, according to a report by CoreLogic Inc., a mortgage software and data firm in Irvine, California. New York had $35.1 billion of property in harm’s way, New Jersey had $22.6 billion, Virginia had $11.3 billion, and Massachusetts had $7.8 billion. Maryland, Delaware and Pennsylvania had a combined $11 billion of property at risk, CoreLogic said.

SALES PRICE

The U.S. median sales prices in September rose to $183,900, up 11 percent from a year earlier, according to the National Association of Realtors. Home sales that month reached an annualized pace of 4.75 million, up 11 percent from a year ago. Pending home sales edged up in September for the 17th consecutive month on a year-over-year basis.

The storm’s central barometric pressure was lower than that of the 1938 hurricane that devastated homes in New York and New England. Flooding from Sandy was reported along the coast from Martha’s Vineyard in Massachusetts through New Jersey. The storm submerged Plymouth Rock, the landmark in Massachusetts traditionally represented as the place where Pilgrims first stepped onshore in the New World in 1620.

FREDDIE MAC & FANNIE MAE

Freddie Mac said today in a statement that it has authorized servicers to suspend foreclosure proceedings for up to 12 months on mortgages it owns or guarantees in states affected by the storm. Also, the McLean, Virginia-based company said it will permit some on-time borrowers to defer mortgage payments for up to a year, will waive the assessment of late fees against borrowers with storm-damaged homes and will not report delinquencies caused by the disaster to credit bureaus.

Washington-based Fannie Mae issued a statement today urging its servicers to grant borrowers affected by the disaster a 90- day period of deferred or reduced mortgage payments under its existing disaster-relief guidelines.

Let’s hope that Frankenstorm stays a fun moniker rather than become our real-life monster. 

Source: bloomberg.com

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