Hurricane Ian Update
Edited by Ashley McCrea
It’s been over a month since Hurricane Ian slammed into Southwest Florida, and something that’s been on
a lot of people’s minds is how this will impact the value of real estate in this area. I’ve done the research,
and you may be surprised by what we found out.
Hurricanes: Good or Bad for Real Estate?
Hurricanes are generally a very negative thing, and general wisdom would say that hurricanes are
also bad for real estate. Something came through that damaged a lot of properties; who would want to live
near a place that is susceptible to hurricanes? However, the reality isn’t that way.
There’s a research website called veros.com that took 30 years’ worth of storms, filtered through
the costliest storms, and focused on the ones that were near population centres. The ones at the top of this
list were ones you’d expect: Hurricane Andrew, Hurricane Charlie, Hurricane Hugo, Hurricane Katrina,
just to name a few. When they normalized the data and compared the real estate appreciation in these
areas after the storm versus the rest of the United States during the same time, what they found was quite
interesting. In the year after a significant, catastrophic storm came through, there was an average of about
5 and 6.5% appreciation above and beyond what the rest of the United States saw in that time frame
across the board. In none of these scenarios did prices go down after these storms.
Why Is There Appreciation After Hurricanes?
After a hurricane, a significant amount of people are displaced from their homes due to flooding.
As there are lots of people who need another place to live, the demand for housing is higher after a storm.
On top of that, there are homes that are too severely damaged to be sold, so the supply of housing goes
down. If we look at the general indicators of supply and demand, if supply has gone down and demand
has gone up, there will obviously be appreciation in the marketplace.
We see that in sales, but we also see this in rentals. After a storm, there is a significant demand for
rentals for shorter to medium terms, about six months to a year, when people are redoing their homes,
which means the rental market gets a surge in demand. In addition, interest rates are presently climbing
above 7% and doing what it is supposed to do in slowing down the sales in the real estate market. This
will also impact appreciation in this industry.
That being said, the actual number of properties that are available to rent or buy is at the exact
same level that it was prior to Hurricane Ian coming through. It took us a few weeks to shake out what
we’d been through, but we’re on a trajectory to get back to the same sales we were at before the storm.
What About Coastal Areas?
All the information I’ve provided thus far pertains to Southwest Florida. In coastal areas like Fort
Myers Beach, Sanibel Island, and Captiva Island, this is going to take more time. There are places that
will never be rebuilt and others that will take a longer time to rebuild, but I believe these areas will see a
significant increase in revenue over time. This is due to the construction cost to rebuild, which will go up
due to bringing these buildings up to flood standards, resulting in the value of these properties increasing
along with it.
In addition, insurance in the state of Florida has the potential to be one of the biggest risks for
people moving to Florida. The high cost and low availability of insurance will cause problems unless the
Florida government steps in and figures out how to fix the insurance market as it stands right now.
A Silver Lining for Investors
This is a good time to enter the market and procure properties that you may have not been able to
purchase before the storm. We’ve seen a number of significant price reductions on severely damaged and
flooded properties on our MLS, with some being reduced by one million dollars.
If you’re interested in investing in the Southwest Flordia real estate market right now, we’ve put
together a list of properties that have been damaged and are on the market. Feel free to reach out!
If you are considering selling and want to get an idea of what your Florida home is worth, send an email to info@gulfpointeproperties.com. If you’re looking to purchase in the area, you can get a jumpstart by filling out your home wish list here: https://forms.gle/B91pjBStQbEnUCBPA
📲 Thank you for your support! We have so many people contacting us who are moving here to Naples & Fort Myers, and we ABSOLUTELY love it! If you are moving or relocating here to Southwest Florida, my team and I can make that transition so much easier on you.
Reach out…we’re here for you!
Brad Dohack, Broker/Owner at Gulf Pointe Properties, Team Lead
📲 Call/Text Direct at (239) 734-7723
📲 Email: info@gulfpointeproperties.com
👨💻 Website: https://www.homesearchinswflorida.com/
