As residents in Texas and Florida pick up the pieces in the wake of two devastating hurricanes to hit the southeastern United States in the last month, the focus now shifts to recovery.
As the dangers subside as floodwaters recede, attention invariably turns to longer-term impacts, including what happens to the real estate in those storm-ravaged towns and cities?
The natural assumption is that, as happened in New Orleans after Katrina in 2005, residents may abandon their homes, causing property values to plummet.
That isn’t always the case, according to Todd Tomalak, vice president of research at John Burns Real Estate Consulting, a nationwide firm.
“We see a big disconnect between the [neighborhoods] that were hit and those that were not hit” in some storms, even within the same city, he explained. “The areas nearby not directly hit by the storm continue chugging along.”
In Houston, home sales have naturally slowed since Harvey. However, it isn’t a complete rainout in the market. Homes in areas not impacted by flooding might actually be worth more now than they did before the floods, as folks whose properties were badly damaged begin to look in earnest for safer places to live.
The inevitable rebound that comes from rebuilding the Houston area may cause a bounce-back in the months ahead, according to Vicki Fullerton, chairman of the Texas Association of Realtors.
“The devastation brought on by Hurricane Harvey will affect real estate activity in many areas of the state for the remainder of this year,” Fullerton told the Dallas Morning News. “It’s going to take a while to sort this out.”
In Florida, the impact of Irma is still being sorted out, but the rebuilding effort faces plenty of challenges.
Some cities, like Miami, are so far south that finding masses of construction workers and transporting materials will likely cost far more than the rebuilding efforts underway in Texas.
The true impact of Harvey and Irma continue to be sorted out, but history teaches us that hurricanes aren’t likely to keep buyers away for long.
Orell Anderson of Strategic Property Analytics in Laguna Beach, Calif., who worked in New Orleans after Katrina, said people are always attracted to the shore.
“People pay significant premiums to be on the water” and likely won’t be deterred by a big storm, real estate appraiser Anderson told Realtor.com. “[Most] people … arrive at the conclusion that that only happens to other people and not me.”