Since Hurricane Ian people from all over the country have been asking what effect the hurricane will have on pricing in SW Florida. We studied past hurricane sales pricing data to see what impacts other hurricanes had on pricing so we could draw some conclusions.
Past Hurricane Sales Pricing Data shows the median sales price when Hurricane Charley hit in August of 2004 was $202,600. In the months following the median price went to $197,800 through November, but then the market started taking off once the world recognized we are getting back on track. It’s almost like Hurricane Charley put SW Florida on the map. Prices ended the following year at $322,300.
Keep in mind this was also the runup to the housing boom in SW Florida and other parts of the country. It was fueled by easy-to-get loans and overleverage. Probably none of the runup in prices had to do with Hurricane Charley, but Charley certainly didn’t hold our market back in any way either. We know this because similar markets like Phoenix and Las Vegas increased by similar percentages to what we did in SW Florida.
Hurricane Irma hit in September of 2017. The median price of a home back in September of 2017 was $255,000. By the end of that same year that number fell to $238,350. Keep in mind one thing about these statistics. Some homes had damage and needed repair before they could close, so it could skew the data. We only count homes that officially could close, and in those few short months we closed what we could.
We like to look at longer periods of time, so we looked through the next year for both hurricanes. By the end of 2018 the median home price was $246,000. Home prices 15 months later were still below what they were when Hurricane Irma hit.
So, what conclusions can we draw? One thing we know is that people have been displaced in their current homes. Those people are looking for new housing. Some are looking for temporary housing until their existing home is repaired, and some homes were wiped out and they’ll be looking for permanent housing. The need for rentals is expanding.
It remains to be seen how many displaced homeowners will look to purchase or rent, and how many might just leave the area.
Currently there are 138 less single-family homes on the market now than before Hurricane Ian hit. We expect this number to climb as agents gain access to power and Internet and assess their listings.
When Hurricane Charley hit the market nationwide was about to take off, and it did. When Hurricane Irma hit the economy was just revving up after a long flat growth period and housing hadn’t been affected yet.
With Hurricane Ian, the economy and the housing market were in contraction. Interest rates have risen, and housing had already started a downturn. Our market leveled off in August, but more economic headwinds were on the way.
Our conclusion is Hurricane Ian probably will not help our local real estate market based on past storms and economic conditions. Florida already had a desperate insurance situation pre-Ian, and we expect that to worsen. Building codes may change again, although newer built homes seemed to fare well. Nothing protects against rising water, and they say this was a once in a 500-year storm.
It will be interesting to watch sales numbers as they begin to change over the coming months. Nobody tracks the market like we do, so stay tuned. You can read articles and sales data going back to 2005 on our Blog at https://blog.topagent.com You can find out what your home is worth at www.SWFLhomevalues.com Keep in mind the analysis tool doesn’t know how much damage your home may or may not have. We would need to evaluate your home’s value further to be more accurate.
You can search the MLS at www.LeeCountyOnline.com, or call us at 239-489-4042 The Ellis Team is here to help. I still don’t have power yet, but we are working hard to answer your questions.
Good luck and stay safe. We’ll get through this together.
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