Consider this. Listed on Zillow is a stunning home located on Anna Maria Island on the coast of Manatee County, Florida. On October 2, the day Hurricane Helen made landfall, the price was reduced by $699,000 to $1.5 million. The description says: “Significant price reduction – Sold As-Is – Seller responded immediately after Hurricane Helen…Up to 36 inches of drywall was removed from the entire home, dehumidifier and fan started immediately and ran 24 hours a day, hardwood All floors and vapor barriers were removed. Cabinets were removed, all doors removed, all appliances and furniture removed, dried and disinfected (anti-fungal spray was used throughout the house). ”
A new climate risk assessment from Zillow and First Street says the home is at extreme risk of flooding and would require separate insurance to qualify for a federally backed loan. This property literally has a 100% chance of flooding within the next 30 years, America’s favorite mortgage term.
So the question remains, should I buy it?
For many, the answer is not chance. Florida is a hurricane-prone area. We’ve known this for a while, but it could impact home sales in coastal metropolitan areas. Pending home sales nationwide rose 2% year over year in the four weeks ending Oct. 6, the largest increase in three years, according to Redfin. In fact, it’s on the rise in most urban areas outside of Florida.
Pending home sales plummeted nearly 18% in West Palm Beach, the largest decline among the 50 most populous metropolitan areas. Next was Tampa, where the number of pending home sales decreased by 15.5%. In Miami, the number of pending home sales decreased by nearly 15%.
“While this is due in part to Hurricane Helen, coastal Florida’s housing market has slowed in recent months due to rising insurance and HOA (homeowner association) costs due to the prevalence of climate disasters,” the analysis said. are. Additionally, “Hurricane Helen and Hurricane Milton, which hit a few days later, could have an even greater impact on future home sales.”
These two problems are especially acute in the world of condos in Florida, where prices are falling for that very reason even as supply increases in some metropolitan areas. The number of condos for sale in Tampa increased by about 57% in July compared to the same month last year. However, prices fell 5%, according to a separate analysis by Redfin. The same thing was happening in Fort Lauderdale, Jacksonville, Miami, and Orlando. Homeowners association dues had been increasing due to additional maintenance requirements for condos and rising insurance premiums, but the increasing severity of weather-related events and the flight of several insurance companies from the state has led to increased insurance costs. Prices were also on the rise.
Not to mention, a previous survey commissioned by Redfin found that nearly one-third of residents between the ages of 18 and 34 said they were reconsidering where they wanted to live after seeing and hearing about the damage caused by Hurricane Helen. . “Americans are beginning to realize that no place will be completely immune to the effects of climate change, and even those who have not directly experienced catastrophic weather events are seeing the effects in the places they want to live. “We’re starting to do that,” Redfin’s chief economist said. he said at the time.
Housing is already out of reach for many people. Can you imagine charging even higher premiums? That’s what people in Florida are dealing with, and in some cases, their homes are uninsured. Florida, for example, has lower prices than California, which is why people flocked to the state during the pandemic, but Florida may be regretting its decision. Florida home prices are much higher than they were less than five years ago. That doesn’t even include insurance issues.
