Hurricanes and Housing Values
Will hurricane Ian have a lasting negative impact on the Sarasota/Manatee housing market? How significant? How long will it last? Short answer: Little to no negative impact regionally. Yes, some neighborhoods in North Port and Eastern Venice experienced some effects due to post-Ian flooding, but as a region, we were spared. And yes, there are individual homes from Palmetto to Englewood that had damage from falling trees or similar that will take a value hit, but there are not enough of them to impact the regional values.
Does that mean prices will keep going up? Not necessarily. The weather is just one of many factors influencing values. Long-term, the West Coast of Florida is more likely to be affected by national market pressures driven by inflation and macro economic factors than from the hurricane.
Our market, like the entire country, was already experiencing a market shift prior to the storm. We are no longer in a frenzied boom market nationally or locally, but we are still low on inventory and seeing consistent demand. We are in a “Sellers” market. Just not the market we were in last year, so we need to stop comparing everything to 2021. Comparisons to 2018 or 2019 are just fine.
Demand is slowing, but is still strong. Supply has risen in the past two quarters, but still remains at 30% below pre-pandemic levels. Yet, new listings to market have slowed as homeowners struggle with consumer confidence in the economy. Supply levels are not expected to go back to pre-pandemic levels anytime in the foreseeable future. The pre-Hurricane Ian level of demand in Sarasota/Bradenton today is similar to that of 2019 which was a great year by normal standards.
Asking prices have adjusted down from their peak in late first quarter (Q1) 2022. Average sold prices have adjusted down minimally to a level comparable with fourth quarter (Q4) 2021. Sellers who adjust their expectations will sell their homes and still reap the profits gained over the past several years, just not the unsustainable increases over the past few months. Could we see further adjustments? Yes, but history tells us Americans want to live in beautiful locations like Sarasota/Bradenton. Supply vs. Demand!