Hurricane María severely affected the Puerto Rico real estate market, where home prices dropped to an eight-year low, a scenario that is drawing a growing interest from stateside buyers looking for property bargains, according to a study.
Point2 Homes, a real estate website for U.S. mainland residents and Canadians looking to buy property on the island, generated an overview of Puerto Rico’s housing sector nine months after the hurricane hit, concluding that “properties are now worth almost half what they were eight years ago after the recession had taken effect, and saw a 15 percent decrease since the natural disaster struck.”
“Hurricane María added to the existing downward trend in home prices on the island. Americans’ interest in Puerto Rican real estate is on the rise, with online searches for homes for sale on the island peaking during María’s impact,” the real estate firm noted.
“Based on our survey, potential home buyers from the U.S. are looking to purchase low-priced houses in Puerto Rico within a year,” the firm noted.
Hurricane María caused about $90 billion in damages to Puerto Rico, with housing representing the largest part of storm destruction, assessed at $37 billion. More than 16,000 residents were already facing foreclosure, Point2 Homes said, citing the New York Times, while informal housing had long been a common practice on the island — only 65 percent of the homes were officially registered before the event occurred.
“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 percent, from $224,000 in 2010, to $116,750 in 2018. María intensified the downward price trend. Right before it hit in September 2017, property prices were around $136,500, 15 percent higher than they currently are,” the real estate website noted.
As part of its research, Point2 Homes found that Humacao and Aguadilla suffered the biggest home price depreciation, while homes for sale in Guaynabo and Rincón 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 percent drop, prices have decreased from a median of $265,000 to $107,450,” Point2 Homes noted.
Saying that interest in Puerto Rico real estate remained “resilient” after Hurricane María, the website noted that 95 percent 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,” the website noted.
The findings showed that:
- 60 percent of the people browsing homes in Puerto Rico are “serious buyers,” while 34 percent wanted to get a feel for the prices:
- More than half of the respondents estimated they would buy a property in Puerto Rico within a year.
- Low prices attracted the most attention, with 39 percent of surveyed users looking to pay below $100,000, and 34 percent willing to go up to $200,000. Only 2 percent 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 percent of the respondents.
- When having to choose what type of property to buy, a little over 60 percent preferred a house, rather than a condo or land.
Meanwhile, as part of its assessment, Point2 Homes also spoke to 48 real estate professionals in Puerto Rico, “who are quite positive about the rehabilitation of the real estate market.”
“Almost half of the respondents were optimistic about the rehabilitation, while 28 percent of them were very optimistic about it. According to the professionals, even though María 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,” the study noted.