How will Hurricane Ian affect the Sarasota real estate market?
As we slowly return to normal after Hurricane Ian, the big question in the real estate industry is whether there will be a sudden drop in prices and a panicked flood of new inventory from people who wish to move away from future storms.
Craig Ceretta, a local broker manager with Premier Sotheby’s International Realtydon’t think so.
“People have short memories. If you look at other cases like this, you usually see a short-term impact with reduced demand and then it goes back to what it was before,” he says. “Some people will say they don’t want to live in a hurricane zone. , but just as many buyers and investors are watching to see if prices will drop. How much, we don’t know, but that’s what happens every time.
After Hurricane Irma in September 2017, Home Sales in Sarasota and Manatee Counties were down 16.8 percent compared to September 2016, largely due to storm-induced closures and evacuations. New registrations have also declined. According to statistics published by the Sarasota and Manatee Realtors Association (RASM) at the time, the number of new single-family homes on the market fell by 31.8% and new condo listings fell by 20.9%.
Yet: “We had our strongest market ever in the two to three years after Irma,” says Budge Huskey, CEO of Premier Sotheby’s.
Typically, there is an increase in listings in September as buyers prepare for Sarasota’s peak season. However, “when Irma started her way to Florida, sellers weren’t preparing to list their homes — they were preparing to keep them safe,” Xena Vallon, then RASM president, said in 2017.
Yet, while sales and listings declined after Irma, median prices rose. The median single-family home price in Sarasota County rose 8.4% to $269,900, while Manatee County rose 9.3% to $295,000. Condos in Sarasota rose 11.2% to $220,000. Condo prices for Manatee rose 2% to $181,500.
The following year, the Sarasota and Manatee county markets were healthier than ever, seeing increased sales in all home types in both counties, to the point that we wondered if we were in the middle of a housing bubble.
Adam Hancock, owner and founder of The Sunshine State Company, serves homebuyers almost entirely from out of state and sees no change in the appeal of the Ian-related area. He points to previous variables, such as soaring interest rates, as a more important factor than the storm.
“I don’t see Ian stopping anyone who was going to move to Florida already,” he says. “People were already favoring Sarasota over the Naples and Fort Myers area because of similar benefits and comparable price.”
Roger Pettingell, a Coldwell Banker Realty agent-broker who specializes in waterfront properties, says: “We’ve been through this before – oil spills, pandemics, hurricanes – when disasters happen, but it usually doesn’t last long. Hurricane season is in the fall, and people will still want to be here during the colder months.”
Ceretta points to the near collapse of Dolphin Tower in 2010 as another lesson in local market response to disasters.
“There was a sell-out panic and people immediately bought discounted condos,” he says. “Even in this case, where it was unclear whether or not a property would pass inspection and be repaired, buyers rolled the dice. Now that the Dolphin Tower is repaired, they are selling with no problem because the people trust repairs.”
Cerreta also points to the tragic 2018 red tide outbreak that caused some people on barrier islands to sell out. “But there were people ready to buy right behind them,” he says.
“The waterfront home inventory is still low, and I think that will protect against any significant changes in the market. Our listings always sell out within a week,” adds Pettingell.
This time around, Ceretta expects housing stock to shrink as landlords pull listings to deal with hurricane damage before putting them back on the market. The challenge in this scenario will be finding workers who have not already headed to harder-hit areas, where guaranteed FEMA money will flow.
“In most cases, people won’t panic to sell,” he says. “They won’t want when buyers are expecting a bargain from Ian.”
Within the local market, Hancock says inner neighborhoods could benefit. “Any insecurities about Lakewood Ranch and Parrish’s distance from the coast could be assuaged,” he says.
But for beachfront die-hards like Pettingell’s guests, little will change.
“They were already facing high risks and are ready to take them,” he says. “A waterfront property will always be magical.”
“Risk-averse people who leave are replaced by someone who wants to be here,” Husky agrees. Rather, he wonders if the local market will see an influx of people from Sanibel and Naples, which were much harder hit by Hurricane Ian.
While they don’t see Ian causing a long-term market downturn, all point to a likely increase in demand for new construction, built to updated codes that can withstand hurricane-force winds.
A wild card is the cost of home insurance, which can affect market reaction. But those effects will take time to kick in as policies are renewed after Ian.
“I think flood insurance will go up dramatically. If rates double, we’ll lose people,” Ceretta says. , but it could have a bigger impact on buyers of $1 million homes, especially as more insurance companies pull out of the state.”
“Insurance ripple is significant, but it won’t wipe out an entire market,” Hancock said.
“It’s always off season too,” Pettingell says. “We’ll see that play out in the peak season this winter when buying traditionally picks up. At the moment it’s still a strong market and we still have what people want.”