Hurricane Irma has devastated much of Florida, and we in the Boca Raton area have emerged very lucky and intact compared to much of our state. As a business owner and real estate broker, what follows is my opinion of its impact on our local community and residential real estate market in its aftermath.
I have read several studies about the effects of hurricanes on residential real estate. Considering previous major hurricanes in Florida starting with Hurricane Andrew in 1992, the number of real estate closings dropped sharply in the months immediately following the event. However, these numbers rebounded within 3 months. Median prices also dipped compared to the rate of change in the national market. Within a year of most major (Category 3 or above) hurricanes, the prices in the areas which were the hardest hit had increased.
Changes to Expect in the Boca Raton Real Estate Market
Fortunately for us, the physical impact of Irma on Boca Raton has been minor. There was very little major property damage, with most damage coming in the form of debris and downed power lines. Now almost one week later, there are still some residents and businesses without power, but in general life is returning to normal.
So far, the main effect has been delayed closings and re-inspection requirements for pending transactions. I believe that the pace of transactions will decrease slightly over the next couple of months. We are hearing also from second home buyers that think (perhaps wishfully) that prices will go down moving forward. These individuals have expressed interest in capitalizing on that opportunity, should it present itself. Overall, the latest storm is not keeping people from saying that they don’t want to buy a home in Boca.
That said, I do not expect home prices in Boca Raton to decrease as a result of Irma. In fact, we could see an increase in demand for housing as people who are displaced from harder hit areas may seek housing here.
What Buyers Are Looking For
More than ever, a home built to withstand hurricane-force winds and flooding will appeal to buyers. After Hurricane Andrew, Florida mandated the most stringent building codes in the U.S. Since 2001, all residential housing in Florida must comply with the revised Florida Building Code. Much of the housing stock in the Boca area pre-dates the requirements. Buyers will be looking for properties that either have been upgraded to comply with the most recent requirements, or which were built after 2001. Therefore, sellers should consider updating their homes to reflect the highest standards of hurricane protection. Additionally, demand for new construction was high even before Irma, and I expect this demand to increase further. This shift will likely lead to higher price points for new homes.
Most importantly, the popularity of Boca Raton, Delray Beach and all of the surrounding towns will not decrease. Coastal areas in good climates have always been in demand and will continue to be, for both permanent residences and vacation homes. The risk of hurricanes has always existed in Florida — after all, the University of Miami sports teams are not called the “Hurricanes” for no reason. Much as our residents have persevered in the face of power outages and downed trees following the storm, so will the Boca Raton real estate market.
Gloria Singer is the Broker of Boca Expert Realty, a boutique Boca Raton real estate company with a focus on professional service and an unparalleled customer experience. Our select agents are amongst the top performing professionals in the field. Visit www.BocaExpert.com for information on Boca Raton, Delray Beach and Highland Beach real estate and to connect with an expert in the local market.