Home Prices After Ian? Probably Going Up
A price spike is expected for Florida real estate spared the wrath of Hurricane Ian. Multiple studies show property values in storm-ravaged regions have historically risen past the national average following a disaster.
Veros Real Estate Solutions estimated that property prices topped the national average by 7% in five metropolitan areas over the 12 months following a hit by a major storm.
An April 2022 analysis of Florida’s housing market by University of California, San Diego economist Joshua Graff Zivin and colleagues also concluded that home prices rise temporarily after hurricanes. And the authors also said they did not observe “any major changes to the racial, ethnic or gender profiles of buyers, suggesting that socio-demographic characteristics of neighborhoods are quite stable in the face of these housing market shocks.”
Many storm victims show an unwillingness to move, which is often the biggest factor in rising prices. However, Ian might change that equation because of predicted hikes to homeowners insurance policies.
A June 2022 report from the Insurance Information Institute found the average cost of insuring a home in Florida has risen to $4,231 annually, although Veros Chief Economist Eric Fox still does not anticipate the situation changing significantly.
“People want to move from states that aren’t run as well as ours, and they have the money to do it,” says Florida real estate agent Rick Pitts. “Hurricanes are no joke – but in California you don’t get an earthquake warning.”
Source: Forbes (10/07/22) Kochkodin, Brandon
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Buyers Undeterred in Ian’s Hardest-Hit Areas
In the month before Hurricane Ian hurtled into southwest Florida, shredding Lee County and destroying or damaging more than 32,000 homes, the area reigned as having the most overvalued real estate in the nation.
The county of pristine barrier islands and waterfront homes had bullied title-holder Boise, Idaho, into second place in an August ranking of price-bloated housing markets, according to a study released Tuesday by Florida Atlantic University and Florida International University.
Two weeks after Ian’s Category 4 wrath, economists and Realtors said the Sept. 28 storm may be a pause in Florida’s humming housing market but is unlikely to have long-term impacts because “people want to live near saltwater in a warm and business-friendly climate,” said Ken H. Johnson, an FAU housing economist.
In the near term, however, Ian could bolster unaffordability in Southwest Florida and Palm Beach County by reducing the number of homes for sale and rent as locals look for temporary residences while their Lee County homes are rebuilt.
“I haven’t lost a single potential buyer because of the storm,” said Bob Ashworth, a real estate agent with RE/Max Realty Team in Cape Coral. “We still have strong demand. People still want to buy.” (more…)