Following the historic Hurricane Sandy, economists and pundits from both sides of the mainstream media started debating whether or not the storm would negatively impact the national economy. The earliest guesses put the projected cost of the damage at roughly $20 billion, but some fear that this number could shoot as high as $50 billion once final figures are tallied.
A recent report in Forbes focused on the effect the storm would have on the real estate market. The news source cited a report from CoreLogic, an industry analytics firm, that estimated $88 billion worth of residences were in the path of Hurricane Sandy. Even if a fraction of these homes are damaged to the point where they need pre-sale renovation, it would constitute a substantial hit to the region's housing sector.
In terms of general economic performance, the jury is still out as to how the storm will impact the coming months. Certainly, fourth-quarter performance will suffer as people devote funds to reconstruction that might have gone to consumer pursuits. The affected areas constitute approximately 60 million people, and this curtailing in spending could cause a drop in retail profits during the holiday season.
In an article published November 1, market analyst David Rosenberg went against the mainstream consensus, saying that reconstruction efforts could hamper consumer spending. He went on to forecast a negative gross domestic product (GDP) result for the fourth quarter of 2012. He cited the fact that households in the Northeastern states have roughly 40 percent more purchasing power than other parts of the nation, suggesting that the drop in consumer spending could be magnified compared to past hurricanes.
Investors may want to review their portfolios as companies begin to work through the impact the storm will have on their revenues and overall performance. It may be a good time for pragmatic entrepreneurs to explore alternative asset strategies, including a move away from riskier options to more trustworthy choices. Cash flow real estate, for example, has a long history of stability and consistent revenue. Those interested in this investment method should check out GreatWealthStrategies.com to receive an informational "Free Game Plan Report."