After the Storm: What to Expect from the Real Estate Market
Our hearts go out to those south of us, and we feel so very fortunate to have missed the worst of Hurricane Ian. There is much speculation about why Sarasota has skirted a direct hit from a hurricane in more than 100 years, but whatever the reason, we support our neighbors who need help dealing with the aftermath. Recovery efforts are ongoing and at the end of this blog, I have included some organizations to support if you haven’t already.
Post natural disasters, whether from fires on the west coast, tornadoes in the central US or hurricanes along our coast, there are two ways in which to discuss the impact they have on the real estate market. The most immediate is the effect it has on transactions already in motion - homes that were under contract prior to the storm. The other concerns short- and long-term impact. According to a recent report from the Florida Realtors, long-term demand will not be negatively impacted, and buyers tend to resume their searches within a month or two. However, the biggest challenge will come from the insurance market. Inflated rates will likely have a longer lasting impact on the market than the hurricane.
The short-term forecast for the greater Sarasota region is that homes will become in short supply again (we had seen inventory starting to balance in the months prior to Hurricane Ian) as people displaced south of us relocate here either permanently or while their homes are rebuilt. The influx of workers to help with recovery efforts and construction will also increase demand for housing – and likely lead to increased rental rates.
For homes that were under contract before the hurricane, an “act of God” provision may have been triggered or the seller needing to repair damage will mean a delay in closing. Another consideration is the possibility of assigning benefits of the seller’s insurance policy. For more complicated issues, I recommend enlisting a real estate attorney to iron out the finer details. I would be happy to discuss this with you further and provide referrals and more information.
Further studies have suggested that the return to the market as normal, is transversely correlated with the time between natural disasters. (i.e., the greater the amount of time between them, the shorter the amount of time for market recovery.) While the state of Florida may experience hurricanes on average every 3 years, it is large enough that individual areas (panhandle, north, southwest, etc.) have a much longer time between storms. That distance between storms, per area, is why it is not surprising that home prices here are expected to continue to top the national averages.
One of the many reasons I love working for Michael Saunders and Company is their mission to support our neighbors in need. They have matched staff donations up to $50,000 for the recovery efforts. Other wonderful organizations you may want to support are the Gulf Coast Community Foundation, the Fort Myers Beach Community Foundation, Community Foundation of Charlotte County, Harry Chapin Food Bank, and Suncoast Humane Society.
The best thing to come out of Hurricane Ian besides the outpouring of support from donors, volunteers, first-responders, and others, is that it took the summer with it. Fall is here, humidity is low, and the beach is calling. Contact me with questions you may have – whether buying or selling – I am happy to discuss your real estate goals: 818-416-2505 or beverlysthilaire@michaelsaunders.com.