How Did 2017’s Hurricane Season Impact Real Estate?

There’s little doubt that the residential real estate market in places like Florida, Texas, and Puerto Rico will be impacted by the tragic intensity of 2017’s hurricane season.

But, how much impact will there be, and what do real estate agents like you need to know? Keep reading to learn more about what experts are predicting for 2018 and beyond so that you can be prepared.

If your community was impacted, lost revenue is likely

Ron Peltier, chairman and CEO of HomeServices of America, in a look at real estate after Hurricanes Irma and Harvey stated recently, “Just in our business alone, a lot of transactions will fall out; there will be a lot of lost revenue for agents and brokers … I don’t think it will right itself any time soon.”

However, the extent of revenue lost will vary and every community will have it’s own experience.

Rei Mesa is the president and CEO of Berkshire Hathaway HomeServices Florida Realty. They have 40 offices throughout Florida, and each one is operating at normal capacity. Mesa explains, “Florida is resilient. There were delays due to repairs, re-appraisals and re-inspections, but we’ve become very good at forecasting the impact [of hurricanes].”

You never know how your own commissions will be impacted, so make sure you have a plan in place for any lost wages (an important reminder not only for this year).

Home sales dropped after the major U.S. hurricanes of 2017

In hard-hit Houston, property sales plummeted 96% during the 10 days before and after Hurricane Harvey. Sales have since returned to normal, perhaps because buyers who decided to purchase in hurricane-prone areas were already aware of the risks. Most buyers stayed true to their contracts.

Still, the after effects of a hurricane can linger.

Understanding the lasting impacts of a hurricane

Even if home sales return to pre-storm levels quickly, problems can still arise. There will be labor shortages for repairs as companies and contractors become backlogged with requests. Florida could have a particularly rough time, since many contractors went to Houston in the aftermath of Hurricane Harvey.

Mold problems are also likely, and many times these issues aren’t obvious until months later. Some homes will have to be re-inspected before financing can go through, which adds to the closing timeline.

Further, agents will have to manage seller expectations. Home prices can drop immediately following a natural disaster and your sellers may have to accept this reality if they’re anxious to sell their property quickly. However, many experts expect prices to eventually rise in hurricane-impacted regions as well, so that may be a comforting silver lining for some of your clients.

 

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