(Photo Illustration by The Real Deal with Getty)
Despite the destruction that Hurricane Ian brought to southwestern Florida less than a month ago, the region’s residential market remains strong as potential buyers hope that a price drop is on the horizon.
Investors and home buyers are hunting for deals on damaged homes and distressed commercial properties in the wake of the storm, The Wall Street Journal reported.
Demand for homes among Florida residents and out-of-towners remains strong despite the storm’s destruction, residential real estate agents told the publication. Potential buyers are still very interested in migrating to Florida or picking up distressed properties.
“It’s pretty much business as usual,” Coldwell Banker agent Kelly Baldwin told the Journal. “I haven’t had anyone reach out who wants to stop their home search.”
Investors with dry gunpowder are interested in swooping into a market where home prices have skyrocketed in recent years and taking advantage of Florida residents who may want to leave the state.
Premier Sotheby’s International Realty’s Friley Saucier is working with a buyer who plans to spend as much as $50 million on picking up properties that were damaged by the hurricane.
“[The buyer] called me after the storm,” Saucier said. “I’ve spent a week calling agents and others trying to find properties that are off-market because these homes are still being dried out and remediated, so they’re not yet listed.”
Rick Lema, who owns a mobile home park located about halfway between Sarasota and Fort Myers that was damaged by the storm, began searching for distressed waterfront homes and commercial properties in nearby neighborhoods before even fixing up his own home. Lema, who said that “prices were through-the-roof ridiculous” beforehand, now thinks owners of distressed properties will quickly want to sell.
“If they were asking $1 million before the storm, I’ll offer $750,000,” Lema told the publication.
Connie and Gregg Langenbahn began looking for a three-bedroom, two-bathroom home in southwest Florida two years ago. The couple is moving from Cincinnati to Florida next month to continue their search and said they remain undeterred by the storm’s impact on the region.
The circling of potential home buyers and investors on distressed properties in southwestern Florida comes as the state continues to assess the full extent of damage caused by the storm. The total cost of flood and wind damage to Florida residential and commercial properties is expected to fall between $40-$64 billion, according to the data firm CoreLogic.
Most Americans are uncertain about moving to a market that is prone to hurricanes. About 62 percent of residents who plan to buy or sell a home in the next year are hesitant to relocate to an area that faces climate risk, according to a report by Redfin.
But southwestern Florida’s real estate market has weathered such concerns in recent years. The median sales price for a single-family home increased by nearly 25 percent to $725,000 between August 2021 and August 2022, according to the Naples Area Board of Realtors. Condo prices shot up by 34 percent during the same period.
Despite Hurricane Ian, many believe that the region’s real estate market will remain attractive to buyers and prices will not come down.
“We most likely will see an increase in prices almost immediately, driven mostly by continued strong demand and a storm-induced inventory shortage,” Florida Atlantic University housing economist Ken Johnson told the Journal. “While pricing might be erratic for the first few months, the demand for living along a coastline with warm weather and a business-friendly economy seems to have led to quick economic recoveries after recent past hurricane strikes.”
Peacock Premier Properties broker-owner Kristen Conti told the publication that “there won’t be a lot of homes to sell for a while” due to a lack of supply and increased demand that could drive up prices for the next 12-18 months.
— Pat Ralph
