Hurricane Maria drives Americans to invest in Puerto Rican homes

[DOS_patos]

At the end of last year, Puerto Rico suffered a devastating hurricane, which some estimates say killed as many as 5,000, and left the island without power for weeks.

Now, Americans are moving in on the island, capitalizing on the downward trend in real estate prices due to the storm. After Hurricane Maria hit the island, homes saw their values decrease by an average 15%, according to a new study from Point2 Homes.

The study shows that Americans’ interest in the island’s real estate is on the rise and online searches for homes for sale even peaked during the storm’s impact. In fact, the survey conducted by Point2 Homes shows potential U.S. homebuyers are looking to purchase homes on the island within a year.

Hurricane Maria caused an estimated $90 billion in damages, with housing receiving the largest portion of the destruction at $37 billion. More than 470,000 properties were hit by the storm, of which about 20% were completely destroyed.

But while home prices dropped 15% after the storm hit, it is hardly a new phenomenon on the island and was only exaggerated by the storm. Even before the storm hit, about 16,000 residents were facing foreclosures.

And due to the island’s ongoing 10-year economic recession, median home prices had already fallen since the housing bubble burst in 2008. Currently, home prices stand at about half of what they were before the recession.

Over the past eight years, the median home sales price dropped 48% from $224,000 in 2010 to $116,750 in 2018. Right before Hurricane Maria hit the island, home prices were about 15% higher at a median $136,500.

Now, as home prices continue to fall, Americans are growing more interested in buying real estate on the island. And while some of the traffic could be less serious lookers or those who are just curious, a majority of Americans said they are seriously interested in buying a home in Puerto Rico.

A survey by Point2 Homes of 435 of its site’s visitors showed 60% of views said they were seriously interested in buying property in Puerto Rico. Another 34% answered they were just trying to get a feel for the prices, and 6% said they’re looking to sell their home on the island.

As far as time frame, those looking to buy within the next six months saw the highest percentage of lookers at 29%, followed by 28% of those looking to buy a home within the next seven to 12 months. Another 16% said they will be buying in the next one to two years, 9% said they will buy in two years or more and 18% answered that they don’t know their timeframe.

 

[DOS_patos]

i honestly thought about it....and made plans to go and buy and spoke about it alot.

but after visiting last month.......
i couldnt do it.
people are living worse than i thought.
but not on the whole island but its sad to see outside the big cities.

 

[DOS_patos]

More Americans Looking for Bargains in Puerto Rico as Home Prices Drop to an 8-Year Low

With Puerto Rico suffering extensive storm destruction, there were many concerns about the long-lasting effects on its real estate industry. With this in mind, we generated an overview of the island’s housing sector nine months after the disastrous event occurred.

This study evaluates to what extent Hurricane Maria affected the Puerto Rico real estate market. We analyzed asking prices for homes sold on the island, before and after the natural disaster. We looked into the current demand for real estate in Puerto Rico by checking traffic patterns in Google, as well as on Point2 Homes, one of the top real estate websites for Americans and Canadians looking to buy property on the island.

In addition, we surveyed home buyers and local real estate agents to get their feel for the market and get a better picture of the demand and supply aspect.

Here’s what we uncovered:

• Hurricane Maria added to the existing downward trend in home prices on the island. Properties are now worth almost half what they were eight years ago after the recession had taken effect, and saw a 15% decrease since the natural disaster struck;
• Americans’ interest in Puerto Rican real estate is on the rise, with online searches for homes for sale on the island peaking during Maria’s impact;
• Based on our survey, potential home buyers from the U.S. are looking to purchase low-priced houses in Puerto Rico within a year.

Hurricane Maria in Real Estate Numbers
The damage caused by Hurricane Maria was estimated at around $90 billion, with housing representing the largest part of storm destruction (assessed at $37 billion). Over 470,000 properties were hit, out of which a fifth were completely ruined and the rest severely damaged. More than 16,000 residents were already facing foreclosure, according to the New York Times, while informal housing had long been a common practice on the island—only 65% of the homes were officially registered before the disastrous event occurred.

Puerto Rico has been going through an economic recession over the past 10 years. Median home prices had already been dropping since the housing bubble burst back in 2008, while the hurricane only added to the existing downward trend. Here’s how:


Huge Decreases in Puerto Rican Home Prices
We looked into the Puerto Rican properties listed on Point2 Homes and crunched the numbers. Within the last eight years, the median home selling price on the island decreased by 48%, from $224,000 (2010) to $116,750 (2018). Maria intensified the downward price trend. Right before it hit in September 2017, property prices were around $136,500, 15% higher than they currently are.

Here are some specific figures for the top 16 most looked-up Puerto Rican markets on the portal and the changes that they experienced in home prices:

Humacao and Aguadilla suffered the biggest home price depreciation of all the markets that we analyzed – a staggering 74% in eight years. Considered the hurricane’s ground zero, Humacao experienced the most significant drop in value from 2016 to 2018 out of all the cities.

Homes for sale in Guaynabo and Rincon are the most expensive in the country today and underwent the smallest price decreases. Arecibo, Fajardo, and Ponce, on the other hand, offer the most affordable options, with properties at around half the cost compared to eight years ago.

Real estate in San Juan, the most looked-up Puerto Rican destination, has become considerably more accessible. Experiencing a huge 59% drop, prices have decreased from a median of $265,000 to $107,450.


Interest in Puerto Rico Real Estate Resilient After Hurricane Maria
95% of all home shoppers start their buying process online, so to determine the interest in purchasing property on the island we turned to Google and our own website’s traffic analytics platform. Google Trends provided the first cues for an increased interest in the real estate market:

Traffic figures on Point2 Homes reinforce this upward tendency. Visits on the portal’s Puerto Rico Real Estatesection stayed strong after Hurricane Maria; moreover, they are seeing an uptick in 2018.

60% of the People Browsing Homes in Puerto Rico are Serious Buyers
What better way to get a feel for the Puerto Rico real estate market and people’s purchasing intent in the wake of Hurricane Maria than by talking to actual potential home buyers? To do this, we surveyed all users visiting the Puerto Rico section on Point2 Homes. We received answers from 435 visitors, 97% of which were U.S. mainland residents.

Based on the survey results, the island continues to be an attractive market for Americans looking to invest in low-priced real estate. In another study we released in April, Puerto Rico ranked 3rd in the top 30 home buying destinations in the Americas for U.S. residents, right after Mexico and Canada.

Out of all the respondents, 60% said they were interested in buying a Puerto Rican home, while 34% wanted to get a feel for the prices:

 

[DOS_patos]

More than half of the respondents estimated they would buy a property in Puerto Rico within a year. The reasons for looking up residences here were quite diverse: investment opportunities (in 30% of the cases), vacation homes (22%), family and friends already living there (39%), etc. 78% of participants stated homes on the island caught their eye even before the hurricane hit.

As expected, low prices attracted the most attention, with 39% of surveyed users looking to pay below $100,000, and 34% willing to go up to $200,000. Only 2% were inclined to make an offer between $501,000 and $1,000,000. The Puerto Rico luxury real estate market—homes over $1 million—appealed to only 3% of the respondents.

When having to choose what type of property to buy, a little over 60% preferred a house, rather than a condo or land.


The Real Estate Professionals’ Perspective
We reached out to the real estate professionals in Puerto Rico who have listings on Point2 Homes, to gain their insight on the island’s housing market after the hurricane. 48 local agents provided us with their input.

Based on the survey, professionals in Puerto Rico are quite positive about the rehabilitation of the real estate market. Here’s what they shared:

Almost half of the respondents were optimistic about the rehabilitation, while 28% of them were very optimisticabout it. According to the professionals, even though Maria was an unfortunate event, it brought with it real estate opportunities as well: an active rental market and lower-priced homes that attract more buyers.


What’s to Come
Puerto Rico is setting its hopes on tourism as a way to speed recovery, while voluntourism is also promoted and highly appreciated. Visitors are encouraged to not only aid in the rehabilitation of the island through cash influx but to also actively participate in helping out its residents through voluntary work.

More than 80% of Puerto Rico’s 155 hotels are back in business, welcoming travelers. The upcoming cruise season is expected to generate around $250 million in revenue from the brief visits of no fewer than 1.7 million people who have already booked their stay on the island.

Moreover, the increased coverage of the island in the media is seen as a great opportunity to boost awareness of this exotic destination.




Methodology:

• • The Puerto Rican cities listed in the study were the island’s most looked-up destinations on Point2 Homes, with the highest number of visits from October 2017 to March 2018;
  • Median home selling prices for Puerto Rico’s cities and for the island overall were calculated using the data available on Point2 Homes. For 2010, 2013 and 2016, we took into consideration all available listings for the entire duration of the year. For 2018, we used the active listings up until March;
  • Online users’ interest in Puerto Rico homes for sale was researched using the Google Trends platform, by looking at data from January 2017 to April 2018;
  • To determine home buying intent, we surveyed all users visiting the Puerto Rico real estate section on the Point2 Homes platform over the course of 3 months, starting November 2017 and ending January 2018. 435 respondents filled out the questionnaire;
  • To get a professional perspective on the real estate market in Puerto Rico, we reached out to local real estate agents that use Point2 Homes to advertise their listings. Surveys were sent out from November 2017 to January 2018 and 48 answers were received.

Fair use and redistribution
We encourage you and freely grant you permission to reuse, host, or repost the story in this article. When doing so, we only ask that you kindly attribute the authors by linking to Point2Homes.com or this page, so that your readers can learn more about this project, the research behind it and its methodology.

 

[Babelipsss]

Nice vacation home opportunity...just saying

 

[DOS_patos]

Nice vacation home opportunity...just saying

But can you with a clear mind buy it from people who need money just to eat? Sleeping in there car?
I couldn't.

 

[Sam Crooke]

Why would I buy a home knowing it'll be fucked up during the next hurricane?

 

[konceptjones]

Not gonna front, the wife and I had been considering PR if Belize ain't in the cards.

 

[shutupGabi]

Why would I buy a home knowing it'll be fucked up during the next hurricane?

I literally came in here to post this.

Unless they hurricane proofing all these homes they have to rebuild, what are we doing?

 

[Sam Crooke]

I literally came in here to post this.

Unless they hurricane proofing all these homes they have to rebuild, what are we doing?

Sum reason tha episode of boondocks pops in my head where ruckus calls the katrinians dumb for not knowing there's wind and rain in a hurricane

 

[DOS_patos]

I'll be back to get in yalls ass

 

[Babelipsss]

But can you with a clear mind buy it from people who need money just to eat? Sleeping in there car?
I couldn't.

I sure can. And don't be a hypocrite. You ever go to the DR? Plenty of poor oppressed people yet you can find a way to have a good time.

 

[Suckio Andretti]

But can you with a clear mind buy it from people who need money just to eat? Sleeping in there car?
I couldn't.

Uh that's happening everywhere

 

[DOS_patos]

View attachment 91091


Uh that's happening everywhere

So is child porn and pedophilia...you gonna join in that too?

 

[DOS_patos]

I sure can. And don't be a hypocrite. You ever go to the DR? Plenty of poor oppressed people yet you can find a way to have a good time.

I won't go into a ravaged area and take advantage if poor people.
And yes I do have a good time in the DR...but very different than people would think.
I know. What your getting at...but nah, ain't me.
As a black person...I just can't take advantage of people...I have certain lines I just won't cross.

 

[Qawshun]

As expected

 

[SneakDZA]

vultures

 

[DOS_patos]

Why would I buy a home knowing it'll be fucked up during the next hurricane?

you have to understand the infrastructure and whats going on.....

its alot of places in hurricane paths....yet people still buy homes in those places.
real estate still poppin in florida after the crimes
real estate still poppin in new orleans after katrina.

but when the infrastructure is replaced.....the prices sky rockets. and puerto rico will be the next go to spot and this is why they are allowing the shit to stay like it is....i said this a while ago.

its profit to be made in devastation.
while most people run away from it....thats actually the time to run towards it.
but seeing the shit first hand.....im cool. more power to those who can go thru with it.....but them white folk down there acting a fool.
a gotdamn fool. offering people fucking pennies.

where is all them ricans from NYC?

 

[Suckio Andretti]

So is child porn and pedophilia...you gonna join in that too?

Lol way to go..

 

[shutupGabi]

you have to understand the infrastructure and whats going on.....

its alot of places in hurricane paths....yet people still buy homes in those places.
real estate still poppin in florida after the crimes
real estate still poppin in new orleans after katrina.

but when the infrastructure is replaced.....the prices sky rockets. and puerto rico will be the next go to spot and this is why they are allowing the shit to stay like it is....i said this a while ago.

its profit to be made in devastation.
while most people run away from it....thats actually the time to run towards it.
but seeing the shit first hand.....im cool. more power to those who can go thru with it.....but them white folk down there acting a fool.
a gotdamn fool. offering people fucking pennies.

where is all them ricans from NYC?

Again...worst case scenario, let's say the house you bought gets destroyed in 2 years. Investment down the drain or nah?