The aftermath of Hurricane Sandy may have a lasting effect on the housing market throughout much of the East Coast, and could influence property data reports for a lengthy period.
Damage was at its height from Virginia to Massachusetts. There may be $20 billion in total damage, with less than half of that amount covered by insurance policies, Bloomberg explained, citing information from Eqecat. Additionally, property damage could be widespread, as there are billions of dollars at risk in the Mid Atlantic and Northeast regions.
According to some, the damage may linger in the residential housing market, as the affected areas could need time to recover, and consumers may reconsider shopping for a property.
"We'll definitely see lower numbers in new sales and new applications," David Stevens, president of the Mortgage Bankers Association, told the news source. "We do expect to see lenders put a freeze on properties across the northeast on the shoreline until they can be inspected and assessed for damages."
The stock market paused for two days due to the storm's damage in the region. This may affect several aspects of the economy, especially the residential and commercial markets, the news source noted.
Foreclosure issues remain for tri-state area
While many showed concern for the current state of the homes in the area affected by the hurricane, there are also other issues, such as foreclosures. Citing foreclosure property data from RealtyTrac, the news source explained that the tri-state area - Connecticut, New Jersey and New York - has three of the longest foreclosure processes in the country. New York's averages more than 1,000 days per home, while the Garden State has approximately 930 days. Connecticut's level is the sixth highest in the country, with 661 days.
One attorney interviewed by the news source explained that with damage information still days away, the foreclosure situation may not be better for it.
With so many affected by the storm, federally-sponsored agencies recently urged mortgage loan servicers to abandon foreclosure actions in these areas for those delinquent. Freddie Mac suggested this may be best done by eliminating foreclosure reporting to credit bureaus, as well as stopping evictions and foreclosures for as long as one year.