- Hurricane Ian, an example of Florida’s worsening climate crisis, caused billions in damage.
- Real-estate investors are trying to take advantage of the down market by buying properties for less.
- They seem undeterred by high insurance costs, possibly falling home values, and ever-worse storms.
The real-estate market in Florida just doesn’t stop.
After estimated billions of dollars in damages from Hurricane Ian only weeks ago, buyers are seeing an opportunity to swoop in and buy properties for lower prices.
Rick Lema of Narragansett, Rhode Island, owns a home in a mobile-home park in Englewood, Florida — on the western coast of the state between Sarasota and Fort Myers — that got wrecked after Ian. Instead of first repairing his own home, he started looking for other damaged homes and commercial properties to invest in.
“If they were asking $1 million before the storm, I’ll offer $750,000,” Lema told The Wall Street Journal.
Friley Saucier, a real-estate advisor at Premier Sotheby’s International Realty in Naples, Florida, told The Journal that she is working with an investor who plans to spend up to $50 million on properties damaged during the hurricane.
Any deals now might come with hefty costs later
Real-estate investors like Lema may be able to get some discounts in upfront costs, but rising insurance rates in Florida might even out any savings.
According to data from the trade group Insurance Information Institute, Florida residents pay an average of $4,321 a year for property insurance — almost triple the national average. Those prices do not include flood insurance. Flood insurance, through the FEMA-managed National Flood Insurance Program, costs Floridians an average of $562 a year, according to the personal-finance site ValuePenguin, and that number could increase as the climate crisis worsens.
The risk of destruction from the climate crisis could directly affect the housing values, according to David Burt, a cofounder and the CEO of DeltaTerra Capital who shorted the booming housing market in 2008 while working as a consultant at Cornwall Capital. Burt said home values in some of Florida’s highest-risk areas — including the Fort Myers region, where Ian hit hardest — could drop by as much as 50%.
Still, it seems many buyers are undeterred by or unaware of insurance costs, future home-value depreciation, and the risk of ever-stronger hurricanes and rising sea levels.
Connie Langenbahn, a retired school-bus driver, has dreamed of spending her retirement in Florida and the recent disaster is not stopping her plans. She and her husband, Gregg, told The Wall Street Journal that they are still planning to leave Cincinnati and move to southwest Florida in November as permanent residents.
“It’s pretty much business as usual,” Coldwell Banker Realty agent Kelly Baldwin told The Journal.
Baldwin specializes in Gulf of Mexico towns like Anna Maria and Longboat Key, which are coastal cities susceptible to hurricane damage. But, according to Baldwin, current and future threats are not slowing transactions.
“I haven’t had anyone reach out who wants to stop their home search,” Baldwin said.