Economist Paints Picture of Bright Recovery from Sandy


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11/27/2012
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The devastation created by Hurricane Sandy may create a mini-boom in of real estate finance and construction opportunities. A new analysis, by Dr. Peter Moric a professor at the Smith School of Business, University of Maryland School and former chief economist at the U.S. International Trade Commission, paints a bright picture for recovery.

He found that Sandy’s results are "far more complex than merely adding up insurance payouts and uninsured losses," and he adds that Sandy's property destruction and disruption of commercial activity could ultimately cost up to 3 or 4 billion dollars.

"Rebuilding after Sandy, especially in an economy with high unemployment and underused resources in the construction industry, will unleash at about three billion dollars in new direct private spending. Some people will rebuild larger than before, and the capital stock that emerges will prove more economically useful and productive," according to Morici.

"On the shore, older smaller homes on large plots are replaced by larger dwellings that can accommodate more families during the summer tourist season. The outer banks of North Carolina witnessed such gains several decades ago after rebuilding from a storm of similar scale.”

Therefore, properties in badly hit Sandy areas which were only slightly affected will appreciate as the nearby area is rebuilt, and the larger properties will create more demand for services as the local summer rentals become more upscale.

In short, as the debris still sits, and the impacts of Sandy continue to mount, the future holds the promise of recovery. Mr. Moric’s comments point towards a bright future as the Jersey Shore rebuilds.



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