By Ashley Daniels
While local housing market stats from September 2018 showed delays in housing closings in wake of Hurricane Florence, we’re happy to report that October market stats show a healthy increase in closed sales in the coastal Carolinas region up to 4.4% overall, compared to October 2017.
That’s a proven rebound from last month, when sales dropped nearly 40% because of the hurricane-related closing delays.
Additional improvements from October’s regional stats include a 26.3% increase in closed sales of single family homes, the property type that also reported the strongest sales at a 5.5% increase. The single home price range with the largest gain in sales was the $300,001 and above range at 18.1%.
“These numbers from October are a promising indicator of our strengthening housing market in both sales and home values,” says CCAR CEO Laura Crowther. “And we only foresee a continued improvement through the end of 2018.”
Despite what many may think, a housing market post-hurricane can surprisingly have the opposite effect than what’s expected, according to research by Forbes. Hurricane damages actually increase housing market values, which is enticing for real estate investors.
In fact, the Federal Reserve Bank of Dallas investigated recent hurricane impacts on housing markets in U.S. cities and found that the “typical hurricane raises house prices for a number of years, with a maximum between 3-4% three years after.” In Texas, two months after the impacts of Hurricane Harvey, 31% of residential neighborhoods saw an increase in median home prices.
The National Mortgage News (NMN) reports that, in general, natural disasters don’t permanently change the foundation of housing market fundamentals; they just disrupt things for a bit and, after an initial dip in the market, the economy gets a near-term boost from reconstruction, as folks rebuild and get on with life.
NMN goes on to share research from the Federal Housing Finance Agency after Hurricane Andrew, which showed specifically that “price appreciation rates were positively affected by the hurricane.”