🏡 Milton & Helene vs. Florida Home Prices
How will the twin hurricanes impact the housing market?
Hurricanes Helene and Milton have wreaked havoc, especially in Florida.
250+ casualties
$100B+ in damages
How will they impact home prices in Florida?
Let’s look at the impact of the last big hurricane to hit Florida.
Hurricane Ian and Home Prices
Here are two indisputable facts.
Hurricane Ian made landfall in September 2022, and caused $117B in damages
Florida home prices are among the worst performing in America
So, is Hurricane Ian responsible for the home price reverses in Florida?
Yes. And No.
Deadlier Hurricanes & Home Insurance Costs
Hurricanes approaching Florida are now 260% more likely to reach Category 3 or higher than they were four decades ago.
These lethal hurricanes have driven up home insurance costs.
Insurify projects that Florida’s 2024 average home insurance cost (a whopping $12K) will be 50% higher than second-ranked Louisiana.
Post Hurricane Ian:
Homeowner insurance premiums increased by 40%
70% of Florida homeowners saw insurance costs rise
Clearly, this has negatively impact home prices - by reducing homebuyer demand, and persuading some homeowners to sell and relocate.
Low Affordability & High Supply
But, Florida’s problems pre-date hurricane Ian.
Let’s take Tampa as an example.
Rising mortgage rates triggered an affordability crisis, and drove down demand starting late 2021.
Similarly, homebuilder enthusiasm led to a supply shock - inventory doubled in the 6 months preceding Ian.
To Sum Up…
Florida home prices have decreased due to a combination of factors, including:
Destructive hurricanes and rising insurance costs
Overbuilding and affordability shocks
What Happens Now?
There are still too many homes for sale in Florida, and affordability remains low.
The twin hurricanes will push home insurance premiums ever higher. Homeowners will consider moving to safer areas.
Home prices will stay depressed for a while.