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Ian was a whole bigger beast than Irma. Just the sights of the destruction on Ft. Myers Beach, Sanibel, Boca Grande looks like after an atomic bomb.
Sarasota won't be affected much since the damage there will be repaired faster since there was less! However Venice on South is another story. Major flooding too especially in North Port.
Wind damage southern Sarasota county on southward was a lot worse. Englewood, Placida, Port Charlotte. My area of Punta Gorda is going to take a MAJOR hit. Most homes will need new roofs around here. Wind damage in Englewood seemed worse than here in Punta Gorda. These homes won't be ready to sell in 6 months. Will be over a year before all the roofs are replaced because there are so many. What I saw in northern Charlotte County yesterday there is no way the real estate market will heat up for at least a year or more. My large sub division had 6 houses for sale. All of them need new roofs now.
One being that every buyer has a different tolerance for risk, and that the risk of buying varies with the proximity to the areas that are frequently the hardest hit by storms. History shows the Sarasota-Manatee area to have substantially lower risk than Charlotte, Lee and Collier counties. One even states that residents from those counties may desire to move from those areas north to decrease the odds and threat level.
Another is that the risks are already widely known and accepted as part of the equation when those from other areas consider buying, and have only a negligible effect in the overall decision for many to most buyers.
Combine the two and you can see why they seem confident that the two counties will most likely benefit after buyers assess the fact that the “big three” Charley, Irma and Ian all did their worst destruction to areas in Charlotte county and below, and other than North Port, Sarasota county has had a much milder effects. Those with the means to buy in newly constructed and higher priced areas from Venice north to Lakewood Ranch probably will have more incentive now even if they may have preferred the prestige of a Naples address in the past.
The luxury Realtor in the article has absolutely zero concern about his high dollar clients shying away from waterfront homes simply because they are wealthy enough to buy, insure, and rebuild come what may. So it’s obvious that much of you risk tolerance depends on your ability to sit in on what amounts to a high stakes poker game.
It’s the fixed income retiree that is now going to have the most questions as to whether SWFL is worth it, rather than another area that may have less appeal to them as a future home. An area that has less quality of life and amenities but offers them more confidence and stability. It’s sad, but many of these folks were already questioning their ability to afford this area and I doubt many would take the risk of buying older, less storm worthy homes and virtually none would buy a mobile home after witnessing what happened to them during Ian.
Notice that none of the subjects interviewed for the article made even a mention of these potential buyers or these types of homes. That shows you their desired vision for the future of the land and development in and around Sarasota and the types of buyers they want to coming as well.
Hurricane Ian likely will exacerbate Florida's already existing insurance crisis with more meaningful implications for coastal real estate markets than after prior destructive hurricane impacts.
It would seem certain that insurance premiums will increase even further, and availability may become more limited. For wealthy individuals who can self-insure and perhaps even absorb a total loss of home equity with little meaningful financial consequence, higher insurance premiums and escalated risk may not deter housing decisions. For others, who may not be able to finance home purchases with mortgage loans, the costs and risks may make housing purchases prohibitive.
The insurance issue is much greater than just flood insurance.
From the article:
<<A wild card is the cost of homeowners’ insurance, which may put a spin on how the market reacts. But those effects will take time to trickle out as policies come up for renewal post-Ian.
“I think flood insurance will go up substantially. If rates double, we’ll lose some people,” Ceretta says.
“People who buy a $5 million home on the water won’t balk at the increase, but it may have a greater impact on buyers of $1 million dollar homes—especially as more insurance carriers pull out of the state.”
“The ripple of insurance is big, but it won’t take out an entire market,” Hancock says.>>
The article makes no mention of the scenario warned about by climate change financial experts -- that a lack of availability of home insurance will result in a lack of availability of mortgage loans. See posts 21 and 57 in this thread.
Florida coastal real estate markets certainly will be impacted in the aftermath of Hurricane Ian by the subsequent cost and perhaps even availability of home insurance. Will more insurance companies fail or withdraw from the Florida market? Will the state-sponsored Citizens Property Insurance Corporation face losses that will require it to assess other policy holders in the state? Will even Citizens be able to assume the risk of insuring coastal properties as even before Ian Citizens was limited in its ability to contract for desired reinsurance policies?
Regarding Citizens' assessment policy to recover losses not covered by reinsurance and reserves, see post 110 in this thread:
If Citizens' assessments take place, what will be the political reaction in areas of Florida that escaped the impact of Hurricane Ian? Won't there be a demand for Citizens to price insurance sufficiently that coastal properties aren't subsidized potentially requiring future assessments? Will Citizens even be available to insure coastal properties without limits on coverage and punishing deductibles? Will Florida politicians instead backstop Citizens requiring cuts in other state funding or tax increases? Will Citizens and other insurers be forced to raise premiums to build necessary reserves if the reinsurance market is closed for Florida insurers?
No article accurately discussing the future of any Florida coastal residential real estate market can avoid a discussion of the current size of the cash market, and the potential size of the cash market in the future (which will be negatively impacted by falling equity markets, recession fears, etc.). And what is the size of the cash market if insurance is limited or prohibitively expensive? How many cash buyers are willing to self-insure and absorb completely any potential loss?
What will be the impact of the quality of life in communities if less wealthy essential workers and other employees no longer can afford to live in the communities, let alone own residences?
The article glosses completely over the reality that unlike after Hurricane Irma and prior hurricanes, the Florida insurance markets were in a crisis before the impact of Hurricane Ian.
The article surprisingly didn't discuss how any combination of likely higher insurance premiums and higher mortgage rates would impact the residential real estate markets in the months ahead. The cost of home ownership seems likely to increase unless prices of homes fall meaningfully.
What happens to existing homeowners with mortgages requiring home insurance if that insurance no longer is available or becomes much more expensive? Will some abandon the market, especially if they can sell and exit with cash after paying off their mortgage? If so, how much will such decisions increase available supply or residences and lower home prices?
Many questions. Answers to follow in coming months, and years.
History shows the Sarasota-Manatee area to have substantially lower risk than Charlotte, Lee and Collier counties. One even states that residents from those counties may desire to move from those areas north to decrease the odds and threat level.
Is history relevant to the actuality of hurricane risk in different areas of the Gulf coast of Florida? Is there any scientific research saying the Sarasota-Manatee area actually has substantially lower risk than other west coast Florida counties? Admittedly, the science may be irrelevant for many buyers. E.g., persons flock to lottery vendors that have sold winning tickets to large jackpots in the past even though the odds are no different than at their neighborhood lottery vendor.
Quote:
Originally Posted by Usir
Another is that the risks are already widely known and accepted as part of the equation when those from other areas consider buying, and have only a negligible effect in the overall decision for many to most buyers.
Reading through other threads in this forum, I don't think that the actual risks are widely known, so they can't be "accepted."
E.g. post 76, regarding the implications of still warming oceans and hurricane rapid intensification.
The problems posed by Hurricane Ian to premiums and availability of residential insurance, let alone flood insurance, will become better known in coming months and years, but I doubt if many persons have yet discounted a worst case scenario. See post 4 in this thread.
This sentence in the article also raises a red flag IMO.
<<Cerreta also points to the tragic red tide outbreak of 2018 that pushed some people on the barrier islands to sell.>>
Hurricane Ian, by washing nutrients into the ocean, may result in a major red tide event.
<<And speaking of algae blooms, Dr. Milbrandt says the increase in nutrients in the water, could lead to more algae blooms including red tide. While the sample size is small, the year after charley and irma, southwest florida saw major red tidial blooms.
“We had large, long lasting red tide blooms, which are algae that bloom and cause respiratory irritation,” said Dr. Milbrandt. “So, that is not a formula, that sample size is relatively small, over a 20-year period, and it is very difficult to predict such a large disturbance happens, what is going to happen. But certainly, the conditions would be favorable for some kind of bloom development.”>>
The organism that creates the Red Tide thrives in a cooler ocean, so this risk will mount as the ocean cools off the Florida coast.
<<Karenia brevis has an optimum temperature range of 22–28 °C (72–82 °F),[8] an optimum salinity range of 25-45 Practical Salinity Units (PSU),[9] has adapted to "low-irradiance environments," and can utilize both organic and inorganic nitrogen and phosphorus compounds to survive.>>
This sentence in the article also raises a red flag IMO.
<<Cerreta also points to the tragic red tide outbreak of 2018 that pushed some people on the barrier islands to sell.>>
Hurricane Ian, by washing nutrients into the ocean, may result in a major red tide event.
<<And speaking of algae blooms, Dr. Milbrandt says the increase in nutrients in the water, could lead to more algae blooms including red tide. While the sample size is small, the year after charley and irma, southwest florida saw major red tidial blooms.
“We had large, long lasting red tide blooms, which are algae that bloom and cause respiratory irritation,” said Dr. Milbrandt. “So, that is not a formula, that sample size is relatively small, over a 20-year period, and it is very difficult to predict such a large disturbance happens, what is going to happen. But certainly, the conditions would be favorable for some kind of bloom development.”>>
The organism that creates the Red Tide thrives in a cooler ocean, so this risk will mount as the ocean cools off the Florida coast.
<<Karenia brevis has an optimum temperature range of 22–28 °C (72–82 °F),[8] an optimum salinity range of 25-45 Practical Salinity Units (PSU),[9] has adapted to "low-irradiance environments," and can utilize both organic and inorganic nitrogen and phosphorus compounds to survive.>>
What would be the impact on coastal real estate markets of another major red tide event following in the wake of Hurricane Ian?
I will say driving over the Peace river on 41 a few days ago the water is VERY dark! The water level is also up really high still due to fresh water runoff! This area of Punta Gorda is very salty brackish water Charlotte Harbor yet the water is high due to all the runoff from central FL.
You know it wouldn't have shocked me if you found largemouth bass and Bluegill near Fishermans Village right now with all the freshwater flowing down.
I know this can't be good for red tide. I've never seen this much freshwater running into Charlotte Harbor like I did after Ian.
I will say driving over the Peace river on 41 a few days ago the water is VERY dark! The water level is also up really high still due to fresh water runoff! This area of Punta Gorda is very salty brackish water Charlotte Harbor yet the water is high due to all the runoff from central FL.
You know it wouldn't have shocked me if you found largemouth bass and Bluegill near Fishermans Village right now with all the freshwater flowing down.
I know this can't be good for red tide. I've never seen this much freshwater running into Charlotte Harbor like I did after Ian.
I know fossil hunters who go to the Peace. They check water levels to make sure it's 'hunt able' meaning not too deep, because they need to be able to stand in the water. They generally are able to go during winter, since during summer, rainy season, the water levels are too high.
Yesterday the water was 17 FEET above what they would consider OK for fossil hunting.
The water flowing out of the Venice inlet is Tea Brown, & filled with Manatee food that has torn away from the bottom of the backwaters. Lifeguards at Nokomis Beach are prohibiting swimmers from entering the brownish water that spews out when the tide is going out....good idea.
I'm not sure that dark water = red tide fuel Does anyone out there know if the Brown water is nutrient rich eough to feed Red Tide?
The water flowing out of the Venice inlet is Tea Brown, & filled with Manatee food that has torn away from the bottom of the backwaters. Lifeguards at Nokomis Beach are prohibiting swimmers from entering the brownish water that spews out when the tide is going out....good idea.
I'm not sure that dark water = red tide fuel Does anyone out there know if the Brown water is nutrient rich eough to feed Red Tide?
I would think so with all the agricultural runoff from inland areas. I'd imagine red tide in Lee and Charlotte counties will be bad due to the Peace River. A lot worse than up by you.
The only good side is red tide usually happens in the summer. In a month the waters near the coast will dip below 80 degrees.
By next May when the water heats up I'd think all that would be long gone by then.
If this were early August I'd very concerned about red tide.
Back in 2018 red tide killed summer tourist season in Ft. Myers.
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Are insurance costs, availability, a "wild card" or a certainty?
