hurricane irma

Hurricane Irma: A Major Hurricane and Its Impact on the Real Estate Market

A Letter From the CEO:

Hurricane Irma was the largest, most powerful hurricane I remember bearing down on Florida. After causing devastation in the Caribbean, it battered the Keys and then took on the southwest coast of Florida before turning inland and going up the west center of the state. Extensive flooding extended to the entire east coast of Florida before it finally left the state. As a result of this storm, there are several effects that will continue long after the water recedes:

Good News:

  1. People heeded the warnings and most evacuated threatened areas. If this storm had followed the west coast path and had not weakened, the evacuation would have been key to minimizing injury and death.
  2. The storm went inland and weakened to a Category 1-2 by the time it reached Tampa Bay.
  3. Storm surge, initially forecasted at 6-10 feet, never materialized in Tampa Bay, avoiding major flooding.
  4. While there was damage to numerous properties, it was limited and most houses have been able to close with only a reinspection by the mortgage company.
  5. Strengthened building codes significantly reduced damage to newer homes.
  6. The biggest issues Tampa Bay residents experienced was loss of power or cable. These were corrected within the first week after the storm.
  7. This single event should not slow down the 300,000 people a year that move to Florida. This pace has been important in maintaining demand for homes and driving the economy.
  8. Our first responders (police, firemen, EMT) and public officials (Governor Rick Scott, Tampa Mayor Bob Buckhorn and St. Petersburg Mayor Rick Kriseman) did an admirable job during this emergency.

Lessons Learned:

  1. A storm the size and power of Irma represented a threat not seen in Florida in recent memory.
  2. The utilities companies can learn from this experience and strengthen their distribution system.
  3. Some areas need to modify their disaster plans (i.e. nursing home tragedy).

Longer-Term Impact:

  1. We may see higher insurance as a result of damage caused by Harvey, Irma and Marie. The National Flood Insurance Program already has a significant deficit and these storms will only make it worse. In addition to the direct losses property insurers are experiencing, these losses will increase the price they pay for reinsurance, which will be passed through to their customers.
  2. There will be significant demand for construction workers to repair the storm damage. This will create a shortage and slow down new construction, making availability of homes for sale in even shorter supply.
  3. A shortage of homes for sale may increase the prices of homes that are on the market.

We are thankful Irma did not have a more devastating impact on life and property in Tampa Bay. We keep South Florida, Houston and Puerto Rico in our thoughts and prayers as we continue through 2017 hurricane season.

– John Tomlin, CEO, Tomlin St Cyr Real Estate Services

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