“Everything is going as usual,” says one of the agents. hurricane-affected area experienced price spikes
Less than a month after Hurricane Yang wreaked havoc in southwest Florida, investors and other buyers are seeking housing in a region where home prices have skyrocketed in recent years.
According to real estate agents in Naples, Florida, and other areas close to the path of a Category 4 hurricane, demand remains strong, both locally and out of state. They say they’ve received a plethora of inquiries from people who are still interested in moving to the Sunshine State or who are hoping to pick up distressed properties.
“It’s pretty much business as usual,” said Kelly Baldwin, an agent for Coldwell Banker in Longboat Key, Florida.
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The costs associated with fortifying a home against wind and flooding, along with rising homeowner premiums and flood insurance, are enough to force some longtime Florida residents to leave.
But some investors with more cash are showing interest. Freely Sausier, a global real estate consultant at Premier Sotheby’s International Realty in Naples, is working with a wealthy man planning to spend up to $50 million on distressed properties in areas that have been hit by Jan.
“He called me after the storm,” she said. “I’ve been calling agents and others for a week trying to find properties that aren’t up for sale because those homes are still drying and being refurbished so they aren’t on the list yet.”
Rick Lema, whose primary residence is in Narragansett, Rhode Island, owns a home in a mobile home park in Englewood, Florida, about halfway between Sarasota and Fort Myers, that was damaged by the storm. Buying with cash, he began driving around the area the day after the storm before renovating his own home, looking for emergency waterfront homes and commercial properties.
Mr. Lema had looked for investment opportunities before, but felt that “the prices were outrageously ridiculous.” Now, in his opinion, the owners of the damaged property will take the opportunity to get rid of their assets. “If they asked for $1 million before the storm, I will offer $750,000,” he said.
Of course, some potential buyers will think twice about the damage caused by the hurricane, which is expected to be between $40 billion and $64 billion in flood and wind losses for Florida residential and commercial real estate, according to an estimate from information company CoreLogic. What’s more, according to a recent report by brokerage Redfin, 62% of US residents who plan to buy or sell a home next year are hesitant to move to a climate-risk area.
Some of those planning to settle in the area are now reconsidering their decision. Kurt Kümmerle, 60, a carpenter living in Marmore, New Jersey, owns a piece of land in Port Charlotte, about 30 miles northwest of Fort Myers. He said he always thought he would build a retirement home there with his significant other, Robin Konchak. But now he plans to sell the land.
“We realized that southwest Florida is too dangerous to live permanently,” Ms. Konchak said.
However, this does not bother many others. Connie Langenbahn, 62, a retired school bus driver, and her husband Gregg Langenbahn, 61, are leaving their Cincinnati home in November to become permanent residents of southwest Florida. The couple said they will be living with their daughter in Sarasota, Florida while they buy a house, a process they started two years ago.
“The hurricane scared my husband, but my whole life I dreamed of living in Florida, and I don’t give up,” said Mrs. Langenbahn.
They hope to spend no more than $450,000 on a three-bedroom, two-bath home. “I hope prices don’t go up now because people need houses,” she said.
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Some housing analysts think so, at least in the short term. “Most likely, we will see prices rise almost immediately, mainly due to continued strong demand and inventory shortages caused by the hurricane,” said Ken H. Johnson, a housing economist at the College of Business at Florida Atlantic University.
“While prices can be volatile in the first few months, demand for accommodation along the coastline with warm weather and a business-friendly economy appears to have led to a rapid economic recovery from recent past hurricanes,” said Dr. Johnson.
Few areas in the US have seen such price increases. According to the Naples Council of Realtors, the average selling price of a single-family home rose by 24.9% between August 2021 and August 2022, the latest month for which statistics are available, to $725,000. Condominium prices have risen 34% over the same period.
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A study released Oct. 11 by Dr. Johnson and Eli Beracha, Ph.D., of Florida International University found that the Cape Coral-Fort Myers metropolitan area was the nation’s most overvalued housing market in August – before Hurricane Jan – with buyers. paying an average of 70% on top of the area’s long-term pricing trend.
“Due to the devastation, there won’t be many homes for sale for a while,” said Kristen Conti, broker-owner of Peacock Premier Properties in Englewood, Florida. The lack of supply, coupled with demand for homes from both end users and investors, will push home prices up within 12 to 18 months, she said.
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