Buddy Heffernan had just put his Gerritsen Beach house on the market with plans to spend the rest of his golden years with his wife on Florida’s Gulf Coast.
Then, Superstorm Sandy washed through the seaside community, forcing him to navigate the murky waters of a real estate market with plummeting prices and rising flood insurance rates that can, in extreme cases, run $10,000 a month.
“Before the storm I could have sold my house for $300,000 easy,” said Herffernan, 76.
Like many people selling property in Gerritsen Beach, Heffernan said he’s been forced to lower his expectations – now he’s asking $279,000 for his two-bedroom, one-bathroom home.
Doreen Garson, owner of Doreen Greenwood Realty, said sales prices have dropped about 10 percent since Sandy. Many homes sold after the storm needed major repair.
“I talked some people out of selling immediately because you don’t want to flood the market,” Garson said. “I sold some fixer-uppers, but those bring the prices down. For a bank appraisal to decide what the buyer will pay, you need comparable houses.”
Joseph Sciulara, owner of “Best Seller” #1 Properties LLC, noted prices dropped as a record number of homes were put up for sale. The multiple listing service currently lists more than 50 houses for sale in Gerritsen Beach – about twice the inventory, pre-Sandy.
“I’ve sold homes for $200,000 that were getting $300,000 before Sandy,” Sciulara said. “Many of them are priced according to how they were damaged by Sandy.”
Investors arrived on the scene, said Paul Link of Tracey Real Estate, purchasing damaged properties that they are now turning around for a profit.
“For the first three to four months, there was no activity,” Link said. “Around March, some people did repairs and sold their houses. Properties are being sold now.”
Prior to the storm, Gerritsen Beach’s popularity was on the rise thanks to an abundance of affordable single-family homes in the waterfront neighborhood. The area’s proximity to the water is now considered a drawback by some.
“People’s confidence in the neighborhood is still low,” Link said. “The buzz still focuses on the fact that it’s on the water.”
Potential buyers worry about how flood insurance rates will change in 2015 when Gerritsen Beach is reclassified as a “Zone A” community – one prone to flooding. For Robert Bendall, a lifelong Gerritsen Beach resident who is under contract to purchase a home in the neighborhood, flood insurance remains a constant worry.
“When they quoted me the price of insurance, there was still the possibility that it will go up,” Bendall, 40, said. “I don’t think we could afford it since we budgeted to even afford the house.”
Garson said homeowners can expect to pay thousands of dollars a month for flood insurance if their homes are not raised more than three feet off the ground. That’s a big blow to many of Gerritsen Beach’s working-class residents.
“These are people who, when their kids are younger, live hand to mouth” Garson said. “They’re depending on FEMA, insurance, and help from the city.”
Garson said she expects the market will get better with time. She plans to keep using the same approach to selling homes as she did before the storm.
“For me, Gerritsen Beach is selling a neighborhood,” she said. “They want a safe, family-oriented place, and that hasn’t changed.”
– by Jacob Passy