If you have a home in Florida — or are considering buying one — you probably want to know how hurricanes affect the real estate market in the state. Is it good for buyers? For sellers? Why?
What’s interesting is that previous natural disasters have proved good for home buyers. Many could never have afforded to buy their first home if they hadn’t had the opportunity to purchase a flood-damaged home.
What Happens Immediately After a Major Storm
Of course, right after a storm the real estate market drops dramatically. Homeowners focus on collecting insurance payouts and repairing or rebuilding their homes. It’s hard to sell a house — especially a flood-damaged one — without taking a significant discount.
Home Buyers and Investors: A Great Opportunity
If you’re a home buyer, this can be your opportunity to get into the real estate market inexpensively. As long as you can get a price that’s appropriate to the damage or find a home that hasn’t been affected that much, you should be able to get the bank to approve the mortgage.
Of course, you want to work with a good buyer’s agent to get a great home at a great price. They should be a strong negotiator, so that you can make sure all the costs you’ll face during repairs and rebuilding will be taken into account.
Decide how much of a renovation you want to take on. If you’re looking for a new primary residence, you may choose to look for minimally damaged homes. As an investor, you may be better positioned to invest in a full renovation and flip the property after the market recovers.
Homeowners: Ride Out the Storm or Sell an Undamaged Home
You’ve already ridden out the storm when the hurricane came through, but if you suffered home damage, the best course of action is to ride out the real estate storm as well. If you do need to sell immediately, though, be sure to work with a top-rated realtor who can help you assess your home’s value and get a fair price for your property.
If you can, repair your home, resume your normal life, and wait until the community and real estate market recovers. Over time, you can expect home prices to rebound, giving you a better opportunity to sell if that’s your overall plan.
Have a home that wasn’t damaged? This is the perfect time to sell. People moving from damaged homes or looking to come into the area have very few choices, and you may be able to get a higher price than you expect. There may be multiple offers or even a bidding war that results in a significant profit.
Be very careful about being taken in by the various scammers that fill an area after a hurricane. Everything from fly-by-night repairs to fake home-buying schemes and more can make a tough situation much worse. Focus on repair companies you know, avoid any financial schemes, and keep life as normal as possible.
A Year Later: The Market Improves Above Former Levels
It takes a while, but eventually property values recover and then continue upward to reach new highs.
Why? Because the repairs that people make are generally with newer, better materials. Homes are renovated by necessity and a newly renovated home is worth more than an older one. Truly dilapidated properties are torn down and replaced by better homes.
Homes in the area will have new roofs, new flooring, and potentially new appliances. Folks may upgrade to more hurricane-resistant materials. Repairs may meet new building codes and have additional safety features.
Federal aid and insurance money have also been used to rebuild the local infrastructure as well. Post-hurricane areas may have better roads, stores, and even piers.
Those who bought and repaired distressed homes get the best increase in home values, but those that simply kept their existing property will benefit as well. With the storm a distant memory, regular buyers venture back into the market looking for homes to buy.
At this point, the market becomes more of a seller’s market. The newly updated homes are very attractive to buyers and prices are higher than before. The infrastructure is new and attractive, making people excited to move into the area.
Interested in Florida Real Estate?
Fortunately, a hurricane is not the end of the real estate market in Florida. It’s simply part of the up and down nature of the market.
As a Florida homeowner, be sure you fully review your homeowner’s coverage so that you understand what damages from a natural disaster are covered and what is not. Be aware of deductibles, which may be higher for hurricane damages like wind.
Interested in buying or selling a home in Florida? Clever can help. Working with an experienced realtor like a Clever Partner Agent can mean significant savings on your listing commissions as a seller.
Fill out the online form today and we’ll be happy to connect you to an experienced local realtor for a no-obligation consultation.