By all counts, Puerto Rico’s housing market is in a deep and prolonged crisis. At least 18 percent of Puerto Rico’s housing stock is vacant as a result of the island’s prolonged economic recession, which commenced in 2006, and the spike in foreclosures after Hurricane Maria suggests that vacant units are increasing at an accelerated rate. Puerto Rico’s economic recession led to depopulation and the loss of jobs, which induced a decline of home equity values and an increase in foreclosures. More recently, Puerto Rico’s housing stock has been damaged due to Hurricane Maria, which devastated the island on September 20, 2017.
The effects of the 2006–2016 economic crisis and the impact of Hurricane Maria (2017) further depreciated Puerto Rico’s housing market leading many families to either leave Puerto Rico, stay within their damaged homes, or move with other families within the island. Perhaps the clearest indicator of the housing crisis is that pre-Hurricane Maria, Puerto Rico lost about 45,880 households while adding 115,197 net housing units from 2005 to 2016.1 Because of this clear unbalance between the increase in the supply of housing and a sharp decline in demand for housing, Puerto Rico’s median home values have declined across the island by at least 10 percent since 2005. Furthermore, aggravating the potential demand for housing in the immediate future, median household income declined by 5 percent, from $21,458 in 20052 to $20,078.