Puerto Rico new-home sales rising
SAN JUAN – The damage caused by Hurricane Maria to Puerto Rican homes, coupled with the flow into the economy of $62 billion in federal funds and insurance payments will help jumpstart the housing sector.
Homebuyers want newly built homes, a market that for the first time rose at the end of 2017.
“People are looking for new homes because they probably inspected a used home and noticed that it lost two windows and opted not to buy it,” Graham Castillo, president of Estudios Técnicos, said Thursday during a Mortgage Bankers Association convention.
Castillo predicted an increase of such magnitude in the construction of new housing projects that many companies will have to bring stateside workers and materials. The amount of work will be “beyond our ability to accept it,” and federal funds will have to be allocated quickly, he said.
He warned, nonetheless, that funds to rebuild homes must minimize the infrastructure flaws the island had before Maria wreaked havoc.
The government must also encourage developers to build affordable housing and refrain from eliminating incentives that allow families to purchase houses.
“The question is: Should we allow people who don’t have enough savings to put a down payment on a home to buy a house. Well, the renter’s market right now is equally expensive, so it is good policy,” he said.
A study by Estudios Técnicos on the state of the housing market showed the following:
- The housing real estate market has remained stable, selling an average 10,000 homes from 2013 to 2016, except last year, when only 8,797 homes, due to the impact of Hurricane Maria.
- About half of the houses that are being rented have a monthly rent of $500. About 58.1 percent of the new units sold cost less than $150,000.
- As of December, there were 154 new developments, for a total of 2,301 homes. Fifty-four of the new housing developments reported sales in the fourth quarter of 2017.
- Jobs in housing construction dropped from 32,282 in 2006 to 7,651 in 2016.
- About 53,000 homes that are being rented are structurally deficient. Some 76,000 homeowners also live in deficient homes.
- Renters in 52,000 homes and owners of 72,000 homes spent more than half of their yearly income in housing.
- More than 515,000 houses sustained a combined $4 billion in damages, the majority of which are in San Juan, Carolina, Caguas, Bayamón, Ponce, Humacao and Arecibo.
- The number of renters has increased by more than 8,000 since 2010.
- Home prices have gone down 24 percent since 2006, to an average of about $165,000.
- Cost of housing is high relative to income. The number of homes with reported incomes of $15,000 to $25,000 a year has risen.