Puerto Rico’s housing market is recovering, despite recent disasters including the earthquake on January 7. According to Global Property Guide (GPG), the island’s seasonally-adjusted purchase-only house price index rose 10.59% year-over-year as of Q3 2019. Quarter over quarter, though, house prices fell by 2.66% in Q3 2019.
Demand is on the rise in Puerto Rico as well, but GPG notes that the island’s housing market is still fragile, due to economic woes stemming from recent disasters.
On Tuesday, January 7, Puerto Rico was struck by a magnitude 6.4 earthquake south of Indios. Puerto Rico, still recovering from the effects of Hurricane Maria in 2017 when the island felt economic losses exceeding $1 billion in Ponce alone. Following the earthquake, CoreLogic expects the economic loss to be maintained within the $1 billion mark.
“I am concerned because Puerto Rico hasn't yet fully recovered from Hurricane Maria, and many of the homes on the island are designed for hurricanes and floods - they're basically built on stilts, which makes them very vulnerable to earthquakes,” said Leisha Delgado, Founder & CEO, Hello Solutions. “Our experience from Maria tells us that there will be challenges coordinating assistance efforts, and communicating with people in parts of the island without power, so they may not know how to get aid, or know that help is on its way.”
To assist with recovery efforts on the island, the U.S. Department of Housing and Urban Development (HUD) has released $8.2 billion in aid to Puerto Rico. The $8.2 billion tranche was originally intended to assist with recovery efforts following the 2017 hurricanes. In February 2018, Congress had approved $1.5 billion towards the recovery efforts with an additional $18.5 billion approved in April, which also included funds targeted to reinstating the electric grid and other mitigation activities after the devastation caused by Hurricanes Irma and Maria in 2017. HUD approved the disbursement of $8.2 billion in March 2019 as part of the grant made available to Puerto Rico's recovery by Congress in 2018.
"Now that proper financial controls are in place, implementing the second phase of Puerto Rico's disaster recovery program can move forward with an extension to its line of credit,” said HUD Secretary Dr. Benjamin Carson. “Additional oversight was needed before we could proceed with confidence that these critical disaster recovery funds will reach those who need them the most. HUD looks forward to working with Vivienda as they continue their recovery process. With this unprecedented amount of capital, it is our firm hope and expectation that Puerto Rico will become the jewel of the Caribbean.”