theconnectionsnj.com HOME & DESIGN PAGE 33 Pandemic, Economy, and Climate: A powerful trio of global conditions continues to influence the real estate market. The pandemic affected home sales significantly. Urban departure, working from home, and remote learning were the largest drivers of relocation. We all thought the real estate market had reached maximum velocity, with competitive bidding and record-breaking high prices, when the storm called Ida became the next great housing disruptor. In Somerset County, hundreds of private homes and rental units were temporarily or permanently uninhabitable due to flooding and structural damage. Locals worked overtime to clean and restore their flood-damaged homes. Meanwhile, the demand for temporary housing soared. Winter arrived with a flurry of housing inquiries, directly related to Hurricane Ida. Damage from the catastrophic storm reduced the housing supply, pushing rent and sale prices higher, especially in areas unaffected by flooding. People with pets faced a greater challenge in trying to find temporary housing because homeowner associations and rental management companies have the power to restrict or forbid pets. Displaced residents with adequate financial resources can move, if they are able to find new homes to occupy while they renovate and sell their damaged properties. Owners of dwellings that sustained flooding or damage are required to disclose the incident(s) to potential buyers or tenants, or risk future liability. Once a property is restored, the question of whether flooding will occur again may affect its value. Buyers must consider flood insurance requirements, whether existing or potential, into the expense of owning a home or investment property. The uncertainty of climate change adds difficulty to establishing property values. I wonder which factor will have a greater impact on pricing: the scarcity of housing, or the probability of future flooding? According to the website of the New Jersey Department of Environmental Protection, the State has a program called Blue Acres, with funding legislated in 2007 and 2009. Blue Acres was created for “the acquisition of lands in the floodways of the Delaware River, Passaic River or Raritan River, and their respective tributaries, for recreation and conservation. Properties (including structures) that have been damaged by, or may be prone to incurring damage caused by, storms or storm-related flooding, or that may buffer or protect other lands from such damage, are eligible for acquisition.” I predict we will be hearing more about the feasibility of property buybacks after the experience of Hurricane Ida, and that it will be controversial. When housing is scarce, does it make sense to spend public funds to eliminate housing units? On the other hand, should the public subsidize housing that is likely to flood repeatedly and require expensive reconstruction? As we move into a new calendar year, some flood-affected locals continue to stay with family, friends, or at hotels, while waiting for new housing options to become available. Competition for housing was already fierce, and the lack of available homes in all price ranges will take months, if not years, to correct. Local expert Johanna Wiseman of RE/MAX Preferred Professionals can be reached at 908-705-0652, or visit www.MyBridgewaterHome.com Buyers must consider flood insurance requirements, whether existing or potential, into the expense of owning a home or investment property. We all thought the real estate market had reached maximum velocity, with competitive bidding and record-breaking high prices, when the storm called Ida became the next great housing disruptor. A GLOBAL TRIO HITS HOME By Johanna Wiseman, RE/MAX Preferred Professionals
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