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Real Estate in Sandy-Hit Neighborhoods Booming Despite Risks, Study Finds

By  Katie Honan and Amy Zimmer | October 27, 2017 7:33am 

 One Sixteen is the first in multiple buildings planned by The Marcal Group for Beach 116th Street in Rockaway Park, which was devastated by Hurricane Sandy.
One Sixteen is the first in multiple buildings planned by The Marcal Group for Beach 116th Street in Rockaway Park, which was devastated by Hurricane Sandy.
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The Marcal Group

NEW YORK CITY — Hurricane Sandy-hit neighborhoods across the five boroughs are being flooded with new development — even as many plans for coastal resiliency haven’t been completed, a new analysis finds.

The 2012 storm, the worst in the city’s history, caused catastrophic damage along the coast, and the storms could continue with sea level rise and climate change, officials say.

But it’s not keeping anyone away, according to the study released Wednesday by StreetEasy.

“The demand for new housing has proven stronger than the memory of Sandy’s destruction,” StreetEasy Senior Economist Grant Long said in the report, which noted an “explosion” of new buildings.

“The pace of waterfront development conflicts with the lessons of Sandy and this year’s hurricane season, and calls the wisdom of development in some flood-prone areas of the city into question.”

Red Hook, which saw its streets flooded with up to nine feet of water during the storm, has added 27 new residential buildings since 2012, the study found. And the cost to live there has continued to rise, with the neighborhood taking the top spot as Brooklyn’s priciest this year.

READ MORE: Sellers of $3M Red Hook Townhouse Are Throwing in a Free Tesla

Buyers are cognizant of the storm, but it’s likely just “in the mid-front of their mind,” said Chris Sheller, a broker with Corcoran who has lived in Red Hook for 15 years.

“There are some people who will only look on Coffey Street, where I have a listing, because it did not flood there," he said.

People are still drawn to the neighborhood for its proximity to Manhattan, and new transportation options such as the NYC Ferry help attract new buyers.

“The neighborhood has certainly rebounded,” Sheller added. “As awful as it was, the neighborhood is doing better than it was before. It’s a testament to New York and the neighborhood. It didn’t destroy the neighborhood.”

Another community devastated by the storm, Belle Harbor, also took the top spot as the priciest in Queens this year — despite resiliency projects on the bay and oceanfront that are still incomplete. 

READ MORE: 5 Years After Sandy, Here's How NYC is Spending Billions in Federal Aid

The price rise came after a few years of real estate dropoffs on the coastal neighborhoods on the peninsula, which includes Rockaway Park, Rockaway Beach, Bayswater, Arverne and Far Rockaway.

The median sales price on the peninsula dropped right after the storm — from $357,500 during the last months of 2012 to more than $207,000 by the spring of 2013, according to the StreetEasy analysis.

But the peninsula bounced back by the five-year anniversary and has seen the largest building boom of any of the city’s flood-zone neighborhoods.

“I wasn’t really sure what direction real estate was going to take after Sandy,” said Maureen Walsh, a real estate agent in Rockaway for more than 20 years. But the storm ended up bringing a lot of attention to the community, along with new investments such as the NYC Ferry and the stronger, more resilient boardwalk.

READ MORE: 12 Innovative Post-Sandy Projects Built to Withstand Future Storms

New businesses opened up in the years since the storm, which attracted new buyers, she said. 

“I get people asking about flooding,” she said. “But people love the beach.”

Glenn DiResto, another agent in Rockaway, said Hurricane Sandy “did not scare anybody away.”

“What I’ve really noticed is the interest that’s coming from off the peninsula,” he said.

“It’s really affordable compared to many other places in the city, and we get to live in paradise most of the year.”

New developments are planned for Rockaway, including the rezoning of Downtown Far Rockaway — which did not flood as badly as other neighborhoods — that will bring thousands of more units of housing.

One Sixteen, a new luxury condo development, is also planned just steps from the ocean on Beach 116th Street in Rockaway Park.

Sandy hasn’t affected real estate costs in all of the neighborhoods it hit, like the Financial District, which didn’t see much of a dip in costs after the storm, the StreetEasy analysis said.

And Howard Beach has recently seen its real estate costs plateau after a major increase in properties sold in 2013, the StreetEasy analysis found.

Yet with real estate costs rising throughout the city, people continue to look toward the coast, in spite of the risks.

“[Buyers] always ask about the storm, but people moving along the coast, that’s part of the territory,” Bob Tracey, of Tracey Real Estate, said.

He has offices in Gerritsen Beach and Breezy Point, which were both decimated by the storm. And yet the market's at an "all time high."

“Living along the coast has its benefits and its liabilities, and the benefits outweigh the possibility of a storm," he said.

DiResto said residents know what they're getting into when they move by the beach — and his hometown is looking better than it's ever been.

"People don't really look at the past, they are inclined to look at the future," he said. "And the future of Rockaway has never been brighter."