Home Buyers Flock to Florida Cities Devastated by Hurricane Ian
‘It’s pretty much business as usual,’ one agent says; area damaged by storm had experienced sharp price run-up
‘It’s pretty much business as usual,’ one agent says; area damaged by storm had experienced sharp price run-up
Less than a month after Hurricane Ian caused widespread devastation to southwestern Florida, investors and other buyers are scouring for housing deals in a region where home prices have soared in recent years.
Demand remains strong from both locals and out-of-staters, according to residential real-estate agents in Naples, Fla., and other areas near the path of the Category 4 storm. They say they have received numerous inquiries from people still interested in relocating to the Sunshine State, or hoping to pick up distressed properties.
“It’s pretty much business as usual,” said Kelly Baldwin, an agent for Coldwell Banker in Longboat Key, Fla. “I haven’t had anyone reach out who wants to stop their home search.”
The costs associated with fortifying a home against wind and flooding, along with rising premiums for homeowner and flood insurance, are enough to cause some longtime Florida residents to leave.
But some investors with plenty of cash are expressing interest. Friley Saucier, a global real-estate adviser at Premier Sotheby’s International Realty in Naples, is working with a wealthy individual planning to spend as much as $50 million on distressed real estate in areas that suffered damage from Ian.
“He called me after the storm,” she said. “I’ve spent a week calling agents and others trying to find properties that are off-market because these homes are still being dried out and remediated, so they’re not yet listed.”
Rick Lema, whose primary residence is in Narragansett, R.I., owns a home in a mobile-home park in Englewood, Fla., about midway between Sarasota and Fort Myers, that was damaged by the storm. A cash buyer, he started driving around local neighbourhoods the day after the storm, before he repaired his own home, to look for distressed waterfront homes and commercial properties.
Mr. Lema had been looking for investments previously, but felt that “prices were through-the-roof ridiculous.” Now, he believes owners of damaged properties will jump at the opportunity to unload their holdings. “If they were asking $1 million before the storm, I’ll offer $750,000,” he said.
Certainly, some potential buyers are thinking twice after the damage caused by the storm, which is expected to be between $40 billion and $64 billion for flood and wind losses to Florida residential and commercial properties, according to an estimate by data firm CoreLogic. What is more, 62% of U.S. residents who plan to buy or sell a home in the next year are hesitant to move to an area with climate risk, according to a recent report by brokerage Redfin.
Some with plans to settle in the area are now reconsidering. Kurt Kuemmerle, 60 years old, a carpenter who lives in Marmora, N.J., owns a piece of land in Port Charlotte, about 30 miles northwest of Fort Myers. He said he always thought he would build a home there for retirement with his significant other, Robin Konschak. But now he plans to sell the land.
“We realised that southwest Florida is far too dangerous to live in permanently,” Ms. Konschak said.
Yet many others are undeterred. Connie Langenbahn, 62, a retired school-bus driver, and her husband, Gregg Langenbahn, 61, are leaving their home in Cincinnati in November to become permanent residents of southwest Florida. The couple said they would live with their daughter in Sarasota, Fla., while they shop for a home, a process they began two years ago.
“The hurricane scared my husband, but it’s been my dream my whole life to live in Florida, and I’m not giving up,” Mrs. Langenbahn said.
The two are hoping to spend no more than $450,000 for a three-bedroom, two-bath home. “I’m hoping that prices don’t go up higher now because people need homes,” she said.
Some housing analysts think they will, at least for the short term. “We most likely will see an increase in prices almost immediately, driven mostly by continued strong demand and a storm-induced inventory shortage,” said Ken H. Johnson, a housing economist at Florida Atlantic University’s College of Business.
“While pricing might be erratic for the first few months, the demand for living along a coastline with warm weather and a business-friendly economy seems to have led to quick economic recoveries after recent past hurricane strikes,” said Dr. Johnson.
Few areas in the U.S. have seen prices run up this much already. According to the Naples Area Board of Realtors, the median sales price for a single-family home increased by 24.9% between August 2021 and August 2022, the latest month for which statistics are available, to $725,000. Condominium prices increased by 34% during the same period.
A study released Oct. 11 by Dr. Johnson and Eli Beracha, Ph.D., of Florida International University, found that the Cape Coral-Fort Myers metropolitan area was the nation’s most overvalued housing market in August—before Hurricane Ian—with buyers paying an average of 70% over the area’s long-term pricing trend.
“Due to the devastation, there won’t be a lot of homes to sell for a while,” said Kristen Conti, broker-owner of Peacock Premier Properties in Englewood, Fla. Lack of supply, combined with the demand for homes by both end-users and investors, will cause home prices to increase for 12 to 18 months, she said.
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Vacationers scratching their travel itch this season are sending prices through the roof. Here’s how some are making trade-offs.
Capri Coffer socks away $600 a month to help fund her travels. The Atlanta health-insurance account executive and her husband couldn’t justify a family vacation to the Dominican Republic this summer, though, given what she calls “astronomical” plane ticket prices of $800 each.
The price was too high for younger family members, even with Coffer defraying some of the costs.
Instead, the family of six will pile into a rented minivan come August and drive to Hilton Head Island, S.C., where Coffer booked a beach house for $650 a night. Her budget excluding food for the two-night trip is about $1,600, compared with the $6,000 price she was quoted for a three-night trip to Punta Cana.
“That way, everyone can still be together and we can still have that family time,” she says.
With hotel prices and airfares stubbornly high as the 2023 travel rush continues—and overall inflation squeezing household budgets—this summer is shaping up as the season of travel trade-offs for many of us.
Average daily hotel rates in the top 25 U.S. markets topped $180 year-to-date through April, increasing 9.9% from a year ago and 15.6% from 2019, according to hospitality-data firm STR.
Online travel sites report more steep increases for summer ticket prices, with Kayak pegging the increase at 35% based on traveler searches. (Perhaps there is no more solid evidence of higher ticket prices than airline executives’ repeated gushing about strong demand, which gives them pricing power.)
The high prices and economic concerns don’t mean we’ll all be bunking in hostels and flying Spirit Airlines with no luggage. Travellers who aren’t going all-out are compromising in a variety of ways to keep the summer vacation tradition alive, travel agents and analysts say.
“They’re still out there and traveling despite some pretty real economic headwinds,” says Mike Daher, Deloitte’s U.S. transportation, hospitality and services leader. “They’re just being more creative in how they spend their limited dollars.”
For some, that means a cheaper hotel. Hotels.com says global search interest in three-star hotels is up more than 20% globally. Booking app HotelTonight says nearly one in three bookings in the first quarter were for “basic” hotels, compared with 27% in the same period in 2019.
For other travellers, the trade-offs include a shorter trip, a different destination, passing on premium seat upgrades on full-service airlines or switching to no-frills airlines. Budget-airline executives have said on earnings calls that they see evidence of travellers trading down.
Deloitte’s 2023 summer travel survey, released Tuesday, found that average spending on “marquee” trips this year is expected to decline to $2,930 from $3,320 a year ago. Tighter budgets are a factor, he says.
Wendy Marley is no economics teacher, but says she’s spent a lot of time this year refreshing clients on the basics of supply and demand.
The AAA travel adviser, who works in the Boston area, says the lesson comes up every time a traveler with a set budget requests help planning a dreamy summer vacation in Europe.
“They’re just having complete sticker shock,” she says.
Marley has become a pro at Plan B destinations for this summer.
For one client celebrating a 25th wedding anniversary with a budget of $10,000 to $12,000 for a five-star June trip, she switched their attention from the pricey French Riviera or Amalfi Coast to a luxury resort on the Caribbean island of St. Barts.
To Yellowstone fans dismayed at ticket prices into Jackson, Wyo., and three-star lodges going for six-star prices, she recommends other national parks within driving distance of Massachusetts, including Acadia National Park in Maine.
For clients who love the all-inclusive nature of cruising but don’t want to shell out for plane tickets to Florida, she’s been booking cruises out of New York and New Jersey.
Not all of Marley’s clients are tweaking their plans this summer.
Michael McParland, a 78-year-old consultant in Needham, Mass., and his wife are treating their family to a luxury three-week Ireland getaway. They are flying business class on Aer Lingus and touring with Adventures by Disney. They initially booked the trip for 2020, so nothing was going to stand in the way this year.
McParland is most excited to take his teen grandsons up the mountain in Northern Ireland where his father tended sheep.
“We decided a number of years ago to give our grandsons memories,” he says. “Money is money. They don’t remember you for that.”
Chima Enwere, a 28-year old piano teacher in Fayetteville, N.C., is also headed to the U.K., but not by design.
Enwere, who fell in love with Europe on trips the past few years, let airline ticket prices dictate his destination this summer to save money.
He was having a hard time finding reasonable flights out of Raleigh-Durham, N.C., so he asked for ideas in a Facebook travel group. One traveler found a round-trip flight on Delta to Scotland for $900 in late July with reasonable connections.
He was budgeting $1,500 for the entire trip—he stays in hostels to save money—but says he will have to spend more given the pricier-than-expected plane ticket.
“I saw that it was less than four digits and I just immediately booked it without even asking questions,” he says.
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