Some 200 firefighters battled the six-alarm blaze in Breezy Point early Tuesday, which was fed by high winds and made more perilous by downed electrical wires, according to witnesses and local authorities.
"The winds were just devastating, blowing from one building to another," Mayor Michael Bloomberg said at a news conference.
By daybreak, emergency personnel and local volunteers could be seen sloshing through flooded streets to put out patches of remaining flames while others assessed what had been lost.
Fire authorities reported three people were injured by the storm, though all injuries were considered minor.
"It was terrible," said Steve Mastrandrea, a Breezy Point resident and volunteer fire fighter, who said he was "trying to give a helping hand and ... got trapped."
"We couldn't help anybody," he said. "I couldn't even help myself."
Flood waters engulfed Mastrandrea's home and began to rise from his basement as the fire raged outside.
"We couldn't tell if the fires were 100 yards or a mile away," he said. "It was just so bright. I couldn't tell where it was.
"I thought we were going to have to jump in the water," he added.
Mastrandrea's home was largely destroyed as he fled with his family to higher ground.
"There's nothing here," he said. "Our homes can always be rebuilt. As long as we have our lives and we're safe."
The National Guard and other emergency personnel fanned out across the neighborhood, though it is not clear what started the fire.
In September, the same area endured severe weather as a powerful cold front brought heavy rain, high winds and a tornado into the beachfront neighborhood of New York City.