Hurricanes and similar natural calamities can have a long-term impact on the real estate sector. Hurricane Harvey struck Texas as a Category 4 hurricane. Texas, where it made landfall was ravaged by high-speed winds and incessant rain for many days since. The rains, the flooding and subsequent damage can play a big role in determining Real Estate Prices after the storms cease.

Impact of the Hurricanes Irma and Harvey

Nederland and Groves, two places in Texas, reportedly had 60 inches of rain. According to estimates, some 136,000 structures were flooded as a result of the rain and winds.

September 10 saw Hurricane Irma make landfall. Buildings and structures throughout Florida were impacted by the resultant winds and heavy downpour. Rehabilitation efforts are going strong in all places struck by storms and hurricanes. However, the story doesn’t end there.

A hurricane has many more implications than that meets the eye

Once a hurricane makes landfall, the sale deals for homes get suspended for a period of time. A simple reschedule won’t do now. The property has to be re-evaluated and marked down for the damage it underwent. Hurricanes drive down real estate prices which have a noticeable impact on the economy of the nation. Hurricanes can also cause property prices to touch the sky.

Buyers apprehensive after property damage

The investment is a big risk once a property gets damaged. In some places, property deals fell by 96%, five days before and after Hurricane Irma. Ross Milroy from Ross Milroy Realty in Florida says, “[The buyer is] wanting to come back and hear from the seller if there has been any damage, and if so, to what extent.” Immediately after the storm, the broker or the listing agent is supposed to get updates from the homeowner and update the buyer about the property.

A storm may not result in the buyer losing all interest but it certainly hampers progress.

Home prices can go up as supply goes down due to destroyed homes

If a particularly strong hurricane has passed the area then it would destroy hundreds of homes. The cost of insurance too would proportionately rise because of the event.

Since Hurricane Katrina in 2005, the trend has become more and more commonplace. After Katrina, real estate got a lot more costly in new orleans. Home prices shot up by 48% according to a report from Reuters. These prices never went down in New Orleans. Only time will tell if the same thing will happen with Houston or other places where hurricanes made landfall.

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