Property that survived Hurricane Ian will gain in value. The photo was taken by RICARDO ARDUENGO/Agence France-Presse.
Rick Pitts, a real estate agent, was selling the dream of waterfront living even as Hurricane Ian hit.
The owner of a Cape Coral real estate company told his followers to check out a canal lot on the north side of town when Ian hit. The perfect setup for punchlines such as "Gives new meaning to the term underwater mortgage" and "Must own a boat" can be found in the autogenerated tweets.
The research from the Federal Reserve Bank of Dallas spoils the gag because of the timing. Real estate in areas affected by hurricanes has appreciated more than the national average in the past.
People who didn't have their houses damaged say they're not going to sell now. I told them that they have no competition.
According to a study by Veros Real Estate Solutions, a provider of residential property valuations to the real estate industry, property prices jumped by an average of 7% above the national average in five metropolitan areas hit by major storms.
An analysis done by the Federal Reserve Bank of Dallas found that Floridians digging themselves out of the storm had the same effect. The gains lasted for years after that.
Authors Anthony Murphy of the Dallas Fed and Eric Strobl were professors at Ecole Polytechnique when they did the research.
The breakdown was co-authored by the University of California, San Diego. Data from 2000 to 2016 was used in the paper. They found that Hurricanes cause a temporary increase in home prices.
Another misconception was busted by the research.
The income of new and remaining residents was higher than the baselines, but there were no major changes to the racial, ethnic, or gender profiles of buyers.
It's easy to understand why housing in areas hit by hurricanes is appreciated faster than usual.
Anthony Murphy of the Dallas Fed said it wasn't obvious what effect would be found. It's more of a shock to supply than to demand.
Many storm victims won't leave. They are willing to keep their professional and personal ties to the region, even if that means having to look for homes when few are available.
Eric Fox, the chief economist, said there are a lot of people who aren't going to move and there aren't places available.
There are reasons to believe that Hurricane Ian might be different.
Six property insurance companies in the state have been declared bankrupt. The FIGA pays claims made by customers of failed insurers out of its pocket.
The costs of the organization are passed on to the people of Florida. The assessments tack 2% onto all Florida homeowner's policies.
According to the Insurance Information Institute, the cost of insuring a home in the state of Florida has gone up to $4,231 per year. According to Triple-I, that is almost three times the national average, and also three times more than the per capita property tax in the state.
Veros' Fox doesn't think that will change a lot. Veros is predicting a boom in Lee County.
Fox doesn't think this time will be different. Lee County housing prices were expected to increase over the next year. Over that time, Fort Myers and Lee County could see 9 to 10% appreciation. If it isn't close to that, I'd be surprised.
There is something else that sceptics should think about.
He said that people would like to move from states that aren't run as well as ours. You don't get an earthquake warning in California because of hurricanes.
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