Home Buyers Flock to Florida Cities Devastated by Hurricane Ian | Kanebridge News
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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

By ROBYN A. FRIEDMAN
Wed, Oct 19, 2022 8:44amGrey Clock 3 min

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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The Lipstick Index Is Back

Sales of the cosmetic product are a bright spot in an otherwise bleak discretionary-goods environment

By JINJOO LEE
Fri, Nov 25, 2022 2 min

Masks off, lipstick index on.

In a gloomy economy, consumers might cut back on other discretionary purchases but will keep shelling out for small luxuries such as lipstick—or so goes the theory. “When lipstick sales go up, people don’t want to buy dresses,” Leonard Lauder, then-chairman of Estée Lauder who is widely credited for coming up with the so-called “lipstick index,” told The Wall Street Journal in 2001.

L’Oréal Chief Executive Nicolas Hieronimus called this out during the company’s earnings call in October, noting that a luxury lipstick or mascara is only €30, making it an “affordable treat.” Sales at L’Oréal rose 9.1% in the third quarter compared with a year earlier despite slower sales in China due to Covid-related lockdowns. Coty, maker of CoverGirl makeup, said organic sales grew 9% over the same period.

Beauty sales have also been a rare bright spot for retailers: Target said beauty category sales grew roughly 15% in its quarter ended Oct. 29 compared with a year earlier, with Ulta Beauty shops in Target tripling their total sales volume over that period.

While Macy’s namesake stores saw comparable-store sales decline last quarter, its beauty-focused Bluemercury chain saw same-store sales grow 14% last quarter compared with a year earlier. Kohl’s locations with Sephora are outperforming the rest of the department-store chain.

Of the 14 discretionary categories that market research firm NPD Group tracks, prestige beauty—products you might find at a department store or a Sephora—is the only category that is seeing unit sales growth year to date. And lipstick, which suffered during the masked-up pandemic, is making up for lost time.

Lipstick sales have grown 37% through October this year compared with a year earlier, according to Larissa Jensen, beauty industry analyst at NPD Group. That is an acceleration from the 31% growth seen during the same period last year. Lip product is the only major category within prestige beauty where sales are actually up compared with pre-pandemic levels, according to Ms. Jensen.

Cosmetic companies have also called out strong sales in fragrances, calling it the “fragrance index.” Demand has been so robust that there is an industrywide fragrance component shortage, Coty said in a press release announcing third-quarter earnings earlier this month. CEO Sue Nabi said during the call that Coty hasn’t seen any kind of trade-down or slowdown, also noting that consumers are shifting away from gifting perfume to buying it for themselves.

“A big piece of it is just a shift in what wellness means to consumers,” NPD Group’s Ms. Jensen said. “Beauty is one of the few industries that are positioned to meet [consumers’] emotional need. It makes them feel good.”

While the lipstick effect could be observed in the recession in the early 2000s, that wasn’t the case during the 2007-09 recession, during which lipstick sales declined alongside other discretionary purchases. Part of this might have had to do with category-specific dynamics.

There was a lot of newness in the cosmetic industry in 2001, including lip gloss, a relatively nascent category back then. That tailwind simply wasn’t there starting in 2008, though nail polish turned out to be consumers’ small indulgence of choice in that period. This time around, consumers may be eager to show off a part of their face that was hidden behind a mask for so long during the pandemic.

In an otherwise bleak environment for companies selling discretionary goods, those in the business of selling cosmetics look well poised to come out of the holiday season looking freshened up.

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