Post Irma Thoughts on the Market

As with any market, there are going to be some positive and negative elements. At the end of the day, the West Coast of Florida with its beaches, culture, weather, and way of life will always be a huge attraction.

So what is the impact post-Irma? My honest feeling is that beyond losing the two to three week period surrounding the storm, it is business as usual. So obviously sales for September are going to be down but my prediction is a quick rebound to a normal market.

Some examples to support this: we started negotiating an offer on a waterfront home on Siesta Key pre-Irma and finished the negotiations post-Irma and are now officially under contract. This week we had multiple offers on another one of our waterfront listings on Siesta Key. One of the buyers, bidding sight unseen. I spoke to two out of town clients this week about their plans to buy and sell in the Sarasota area. Those decisions completely unrelated to the storm.

Again there will be an impact, in particular, delayed closings. Most significantly on new construction and downtown condo buildings that are close to completion. In some cases where FPL infrastructure is critical, we may see much longer delays. But overall from a sales perspective, it is back to normal.

Some trends we may see.

Near-term market trends:

  • Sales will remain strong, but prices will fluctuate even more than before the storm.
  • Increase in investors searching for bargains as a result of hurricane fear.
  • Fewer new listings than normal will come on the market in September and October as sellers clean up and find it harder to complete pre-listing tasks due to demand on vendors.

Medium and long-term impact:

  • Increased demand for construction built after 2006 (current hurricane code) –people feel safer.
  • Decrease of interest in homes that are older (pre-2002) due to older roofs, windows, and codes. Even homes with new roofs may experience some resistance due to buyer perception.
  • Sellers will be forced to spend money on new roofs and windows to compete with newer construction.
  • Decrease of interest in homes that are in a flood zone, unless they are code compliant ( i.e. newer and elevated).
  • Buyers will demand to be more educated on flood zones, elevation and hurricane codes. They will request more data and analysis from their Realtors.

Bottom line: Sales will remain strong. Most people accept that hurricanes are a fact of nature just like tornados and floods are in other parts of the country. People still want to move to Florida and especially in the Sarasota and surrounding area.

As noted above, I think the demand for new hurricane compliant construction will grow so continued strong sales and price trends in this sector. Demand for older homes, particularly those in flood zones and constructed below base flood elevation will lessen which will create the need for some discounting of these properties. This is a trend we have already seen – it will just continue.

Contact
Joel Schemmel
50 Central Avenue, Suite 110
Sarasota, FL 34236
Phone: 941.587.4894