U.S. Housing Watch: What’s in Hurricane Sandy’s Path?
As Hurricane Sandy continues to dominate, the impact of the storm on the U.S. housing market has become a forefront discussion. Major devastation expected from some of the highest levels of wind and rain have led to speculations regarding those properties that may not be properly secured or insured for hurricane damage – such as foreclosures, shadow inventory and properties in the process of foreclosures.
U.S. Foreclosures & Shadow Inventory
Bloomberg reported advisement from Fannie Mae, Freddie Mac, Bank of America Corp. and Wells Fargo & Company instructing U.S. property managers to secure any U.S. foreclosure properties, if possible, by boarding up windows and doors. According to RealtyTrac vice President, there are thousands of foreclosed or repossessed homes in Hurricane Sandy’s path that are expected to be severely damaged. Homes on the foreclosure pipeline are a concern in the long run, as it owners may not have resources to insure their homes adequately.
The U.S. Housing Market
The bottom line is: U.S. foreclosure homes destructed in the path of Hurricane Sandy are not necessarily going to be rebuilt. In U.S. housing markets across eastern states, particularly throughout New York and New Jersey, the property damage from Hurricane Sandy will have significant impact on the housing inventory. With estimates for insured property losses ranging between $5 billion to $10 billion, those foreclosed or repossessed homes still owned by the banks are facing the reality of shelling out more than the value of the property to re-build. Are there still U.S. foreclosures to buy? Absolutely, however certain markets within the U.S. are ore favourable for investors to succeed.
Know Your Market
One of the most common mistakes Canadian investors make when purchasing U.S. real estate is a lack of knowledge about the different types of housing markets and how to properly align certain strategies within a market type. For U.S. real estate investors interested in U.S. foreclosures for instance, ‘emerging markets’ and ‘sexy markets’ are the darlings of the bunch. Once you have identified a strategy and market type, you start to look for a property to invest in.
The election is coming up in a few days and beyond the impact of Hurricane Sandy, the president will have a defining role in U.S. housing policy and regulations going forward. As an entrepreneur, one of the most important challenges will be to find the solution within any perceived problems going forward. There is still a lot of potential opportunity within the U.S. housing market, especially for Canadian investors. The task for Canadians looking to buy and sell U.S. real estate will be to stay informed of developments and find the creative solutions.