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With the Hurricane Ike behind us, and looking at all of the clean up in the areas that have been affected by the storm, I can’t help but think about how natural disasters can significantly affect real estate and the housing market.
It seems that in most cases natural disasters are bad for real estate – homes and buildings demolished and destroyed, people fighting with insurance companies and mortgage companies, jobs lost or temporarily displaced – not to mention unfortunately in many cases the number of lives lost and completely turned upside down.
Since I like to find the positive in every negative, I started thinking about ways natural disasters can help real estate. In some areas, it can give the community a chance to rebuild and renew. Many people in communities can become closer to each other after having survived the difficult circumstances of a natural disaster. As the rebuilding process takes place, better things can come along, somewhat like a phoenix out of the ashes.
It also helps remind everyone what’s really important in life – the people around you. Getting a million dollar real estate deal closed is nothing in comparison to knowing your friends and your family are safe. Those types of things in life should be a number one priority, but in the quest for success we often forget about them.
Natural Disasters can hit any area in many ways – from hurricanes to tornadoes to flooding to even wildfires. Everyone should have a natural disaster plan – who to call, how to evacuate safely, and what to do without electricity or water. It’s not a bad idea to also have plans set out for your business if you could potentially be affected by a natural disaster – it can help things go much smoother in case of an emergency.
Do you have any thoughts on how natural disasters affect the real estate market? Leave your thoughts in the comments below.
17 Comments
A lot of people just decide enough is enough and move. In Tucson Arizona since ewe have no real “natural disasters” to speak of we get a lot of people that move here shortly after a bad hurricane season or an earthquake. 3 months after Katrina we have a lot of people from Florida and the Gulf region saying enough was enough and they were moving to AZ where they wouldn’t have to think or deal with those events…..
I agree that the destruction has been horrible and tragic, but I think the rebuilding process really may help revitalize certain areas. Gavleston, for instance, on the Texas coast has a lot of older homes that were already not in the best of condition and didn’t exactly have the greatest property value. In the storm, some were damaged and some were completely wiped off the map, and if the families are able (or choose to) rebuild rather than just move away as Michael suggested, it really could help improve the real estate market there. Additionally, after Ike, people are going to be more cautious about homes having strong foundations and being solidly built to weather such a storm. If homes are rebuilt to better withstand storms, that may also up their value, or at least demand.
I could certainly understand not wanting to risk the chance of dealing with something like that again! You have a good point Emily with the storm proof homes also – thanks for the comments!
I had never thought that a hurricane could possibly help real estated but I think you have convinced me otherwise. However, the damage is far worse than the gain.
They say that is how you encourage growth in a forest – keep on burning it down and it grows back stronger.
Actually,I think all you have said are reasonable.But I also insist that no matter what,disaster is always the last idea to turn things better.No one is supposed to lose someone he loves or the house which has been lived in for years.Those merchants who is planning to count money after disaster are immoral.
I think after the great chicago fire they were able to rebuild in a more sensible way from all that had been learned about urban planning over the years since the orginal city design.
Also sometimes a disaster kick things into gear. Galveston has some of the best systems in place to deal with hurricanes following the 1901 debacle.
I’d say it depends on how strong community relations are, and how well prepared they are for something like Ike or Katrina. Granted Katrina was a bad one, but its been years, and New Orleans is still a shambles and they’re not even prepared for the next one. I don’t know much about Galveston and the communities there, but I’m hoping they’ll be able to pick up things faster than Louisiana.
I think that a hurricane can help jump start the real estate market in any area where it is stagnating like most areas are in todays economy. It opens up work for home builders who are desperately looking for work these days and being forced to lay off thousands of workers.
The disaster effect, depends on the timeline your looking at. I have some experience in that Hurricane Katrina half submerged my rental in New Orleans. It was rent ready after 6 months, and the market rent was 30 percent higher than before. Overall however, the area is still depressed and may never recover economically. Now the rent is back to the same price as it was before.
Being so close to the devestation created by IKE it is tough to see the positive over the negative, but you are right if you look hard enough you can always find some good! Our office is taking donations for ANY BABY CAN to help out the families that have been displaced with new borns and young infants and for those babies born in Austin to parents who had to evacuate.
We have friends in in South Carolina, and they simply recon they will re-build if a hurricane strikes.
What one then does have to realize is that the prices of homes will probably drop a lot if a hurricane even strikes a second time.
Not a fun place to speculate with a home…
A natural disaster that occurs in an area more than once in the space of a couple of years is sure to drive any real estate price down.
Who wants to live in an area that is known for natural disasters.
I would like to know if the value of houses remain the same after a hurriacane strikes a town. hope it keeps it’s value.
I guess far from helping, it just complicate things for people. Of course Real Estate agents take advantage of this to get more money out of it.
Thankfully I don’t live in an area known for many natural disasters. Unless you by a home a little too close to the ocean and if you do that, you should have known better.
ya,
I agree that natural disasters have both the good and bad effects on the real estate.The good effect is that such disasters can give the community a chance to rebuild and renew.And the good thing is that people come closer to each other in such circumstances.The bad is that after loosing many things in these disasters people fight with insurance companies.