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It's been a little over three years since Sandy ravaged New York City (not to mention most of the Eastern seaboard), and its effects still loom large, particularly in the world of real estate.
While some neighborhoods are still struggling to get back on their feet—and get long-awaited rebuilding funds—others have bounced back shinier, higher-priced, and with more new development than ever before.
To get a sense of Sandy's reach, we examined some of the hardest-hit parts of the city, taking a data-driven look at how their real estate landscapes have changed since 2012. To get a clear snapshot of the numbers, we asked Miller Samuel appraiser (and Douglas Elliman numbers guru) Jonathan Miller to look at both sales prices and sales volume (in other words, the number of deals being closed) year-to-date in fall 2012 versus fall 2015, and compared it with the rest of the surrounding borough.
"When I think of Sandy and its aftermath, I think of higher prices, because neighborhoods are being skewed to luxury or higher end," says Miller. "Houses are being elevated and upgraded, and it’s for a higher-end buyer." And by the same token, houses that are being renovated or upgraded tend to be the ones to actually sell, says Miller, skewing recorded sale prices higher, even when there's plenty of other, lower-priced housing stock in a neighborhood.
Another factor pushing this phenomenon along: sometimes cripplingly high flood insurance costs, which threaten to make waterfront neighborhoods unaffordable for all but the wealthiest residents.
Below, two neighborhoods that have boomed since the storm—and two that haven't fared quite as well—and what they can tell us about the state of our city's market overall:
As a particularly low-lying waterfront neighborhood, Red Hook fared so badly during Sandy that Time magazine termed the damage a "Red Hook apocalypse."
And while the neighborhood is still working to get back to its former self—local politicians have recently targeted the area as a specific beneficiary of new legislation to help small businesses re-apply for emergency loans, for instance—a look at the real estate prices reveal it has more than bounced back, to the tune of a 99.3 percent increase in median sales price over the last three years—even outpacing the astronomic overall growth in Brooklyn:
At the same time, the number of sales has fallen by more than half, meaning there are fewer sales happening at far higher prices. "I don't think Red Hook has doubled in value," says Miller, who thinks "what's selling is the high end."( Cheaper properties, on the other hand, aren't moving, very possibly because buyers at the lower end are unable or unwilling to take on the burden of high flood insurance costs.)
On top of that, a quick scan of current listings indicates that properties for sale right now in Red Hook are almost exclusively townhouses (including the pricey brand-new King & Sullivan development), a fact that likely skews the numbers relatively high.
SOUTH STREET SEAPORT
This is another well-off area that's bounced back even more dramatically than the rest of its home borough. Since 2012, prices in the area have jumped 47.2 percent, compared to Manhattan's overall growth of 16.1 percent. "There's a lot of passion for this neighborhood, and I think there's been this attitude of moving forward, like, 'This is happening, in spite of having had a superstorm,'" says Miller. Indeed, development is still underway at the revamped Pier 17, and this fall, a new public school opened in the area, all part of a long-planned development boom in the neighborhood, and helped along by the growth happening all over Lower Manhattan.
Miller notes that the jump in prices can partly be attributed to an onslaught of high-end new development (for instance, the condos at 5 Beekman). There's been so much, in fact, that the area was recently designated by the National Trust For Historic Preservation as one of America's Most Endangered Historic Places, as Curbed reported over the summer.
Like Red Hook, the volume of sales has gone down (meaning the rise in prices is even more dramatic), but if anything, its post-Sandy growth was part of a trajectory already in place years before the storm. "These markets were poised for a shift to luxury, with or without Sandy," Miller says. "The storm didn't make prices by the Seaport go up by nearly 50 percent."
Between the decimation of Breezy Point, the destruction of the boardwalk, and many residents' years-long struggle to get access to funding to rebuild, the Rockaway peninsula was one of the most notoriously hard-hit areas during the storm, and recovery has been a stop-and-start process. (A documentary about the Rockaways post-Sandy was just released this week.)
And while prices haven't risen as quickly as they have in the rest of Queens—a 16.4 jump borough-wide, versus 4.8 percent in the Rockaways—there has been some price growth, and a noticeable jump in the number of sales. "I expected a drop in sales in the Rockaways, but instead, both sales and prices actually rose," says Miller. "That's a good sign that the area is recovering." (Keep in mind, also, that these numbers encompass both Rockaway Park and Far Rockaway, meaning that they're comprised of perhaps a more dramatically different mix of housing types and prices than most other sample neighborhoods, everything from low-priced bungalows to higher-end options in areas like Belle Harbor.
Miller attributes the growth partly to the overall rise in popularity of Queens (and subsequent spread of residents priced out of more centrally located neighborhoods), as well as to a phenomenon he's seen in farther-out areas like Nassau County, where storm-damaged housing has since seen major upgrades in the intervening years, and as such, commands higher prices.
"Rehabbed properties are what's selling, on top of modest [borough-wide] market improvement," says Miller. (New developments like Arverne By the Sea have continued building and selling units since 2012, as well, another potential factor here.) In any case, the area is likely coming up on a major milestone: the New York Times reports that the full boardwalk is expected to re-open by next summer.
Here, we went for an entire borough versus a single neighborhood, as pretty much no part of Staten Island emerged from Sandy fully unscathed. Some neighborhoods on its eastern shores fared so badly that they're now being quietly abandoned, the majority of residents having opted into a New York State buyout program rather than stay put in areas that will almost certainly flood again and depreciate in value. (DNAinfo also has some stark before-and-after photos of areas where residents say they still can't get their hands on recovery funds.)
"Staten Island was hit harder than almost everyone in the region, and the numbers still show it," says Miller. While most larger areas—Manhattan, Brooklyn, Queens, and New York City as a whole—saw double-digit price growth over the past three years, on Staten Island, the median sales price went down 6.3 percent, and sales volume went down by 5.6 percent:
In other words, when it comes to real estate, the area is still struggling to get back to where it was before the storm. In spite of a push for development in St. George—where the ferry docks, and the New York Wheel is set to go up—Miller says, "the challenge with Staten Island is that it's not physically connected [to the rest of the city.] Queens was 'the New Brooklyn,' then the Bronx was 'the New Queens,' but no one's saying Staten Island is 'the New Bronx.'" (Though as we've written previously, if you work in Lower Manhattan, you might want to give the island a chance.)
Ultimately, all the numbers seem to add up to what's happening the city as a whole: Business is booming at a record price for the high-end, but if owners (or prospective buyers) in less well-off neighborhoods or without the funds to upgrade on their own may well find themselves shut out of the city-wide market boom.