Florida’s changed a lot in the over 20 years I’ve lived on the Gulf coast, and it’s changed even more as a result of COVID-19. But the biggest change to southwest Florida and the entire coastline south of Tampa may come as a result of Hurricane Ian.
Now that the flood waters are receding and everyone is assessing the damage from the storm, we’re starting to get a feel for the damage to real estate values. Feedback from brokers is that the investors and buyers are now out in force looking for properties to buy in as-is condition. One broker from Englewood predicts that home prices will increase for at least another 12 to 18 months because of the additional demand.
Buyers from out of state have not changed their minds and are motivated to buy before prices increase further because of the anticipated additional shortage of properties to buy in the aftermath of the storm. In addition, they have not been discouraged by the increased costs associated with fortifying homes against wind and flooding.
The fallout from the insurance companies is still unknown, but anyone purchasing a coastal home now is calculating that additional cost into their affordability factor.
Of course, Anna Maria Island and other barrier islands on the coast that did not have major damage will be looked at by buyers and seasonal renters. This could prove to be an even busier rental season for Anna Maria Island with higher price tags for rentals and purchases alike.
Assuming all of the above, where does that leave the average buyer who wants to live on the coast? Unfortunately, many will be forever priced out of coastal living because of a combination of building codes and the increased costs of flood and homeowners’ insurance.
The most recent update to Florida building codes from 2020 includes provisions to seal roof decks, as well as longer standing requirements to install impact-resistant windows or shutters and an update to stronger connections between the roof, walls and foundation.
As previously stated, homeowner’s insurance companies are requiring condos and single-family homes to install new roofs before they will provide an insurance policy. This is happening even if there are currently no leaks or damage to existing roofs, if they are over a certain age.
According to a recent report by CoreLogic, there are nearly 33 million homes at risk of hurricane-force wind damage along the Gulf and Atlantic coasts in Florida, so the amount of property updating required is substantial.
When Hurricane Michael hit the Panhandle town of Mexico Beach, it didn’t take long for the area to recover with high-end homes, gated communities and beachfront condos supplanting the original old Florida cottage nature of the area. This is certainly going to happen in parts of southwest Florida where many homeowners do not have flood and/or homeowner’s insurance and are planning not to return. Just to prove that “deep pocket” money isn’t afraid of storms, The Ritz Carlton Residences on Estero Bay, located just south of Fort Myers Beach, is breaking ground next year with units starting at $2.8 million.
I still have my crystal ball handy from Halloween and it’s telling me Florida’s real estate values are strong and may actually get stronger because of Hurricane Ian. The downside is will “old Florida” be gone forever? The crystal ball is saying, “Why are you asking that question? You know the answer.” Unfortunately, I do.
