The strong real estate market is expected to continue in spite of this year’s predicted busy hurricane season. Surprisingly, a hurricane has the opposite effect on the real estate market than what’s expected.
Short-term effects, reports show that hurricane damages actually cause housing market prices to go up. The Alabama Gulf Coast market typically experiences investors buying up properties that surround the coastal area knowing the demands will quickly return. Not to mention, the millions of insurance dollars and government reconstruction money that flows into the market which boosts the economy and increases jobs for rebuilding. In turn, the market will feel some long-term effects as well. If homes are damaged by a hurricane, then it will cause a decline in inventory. That would prompt a seller’s market if there is limited inventory. In addition, there will be a limit in new construction due to the construction industry working on repairs.
At Ashurst Niemeyer, our Property Management Department is impacted by hurricanes as well. As many people enter the rental market who were previously homeowners, the supply of rental properties will also decrease. The housing market will tighten as supply is depleted therefore increasing the rent in unaffected areas. Commercial spaces are equally as vulnerable and can also experience damages. The impact on property values for offices and retail is less because people still need to work and buy products. The leasing of commercial property increases as business owners seek space to continue running their businesses.
Warm weather, water activities, beaches, and the ambiance of the Alabama Gulf Coast never leave. Despite the threat of hurricanes, residents enjoy what the area has to offer and the thriving housing market that accompanies it. This area is one of a kind, and its residents and future residents know that…hurricanes are just the price you pay to live in paradise!
If you are looking to buy or sell property on the Alabama Gulf Coast during this hurricane season, call one of our real estate agents to make sure you are making the right financial moves.