An ambulance sits abandoned in the middle of a flooded street after Hurricane Sandy hit Hoboken, N.J.
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A disaster bounce? According to Yun, any short-term market downturn following Sandy is likely to be followed by a quick rebound. "There's going to be a pause on economic activity in the quarter. There are slower home and retail sales," Yun says. "But the need to rebuild, the injection of insurance money and federal money leads to a boost in economic activity in the subsequent quarters. We're going to have weaker activity now, but stronger economic activity in the long term."
Yun adds that the need to rebuild homes helps industries that support construction. "Homebuilding directly leads to so much more economic activity," he says. "Within three to six months, one begins to see an uptick, particularly because of the homebuilding and all the secondary related economic activity like plumbing and contracting."
Joseph Pasquarella, managing director at Integra Realty Resources, a real estate consulting firm in Philadelphia, adds that the area affected by Sandy would more quickly rebound because of its economic importance. Wall Street, and the people who work there and live in affected areas, will be back up in no time.
"They will quickly rebuild those cities in New Jersey and in New York," he says.
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