What is the Impact of Hurricane Maria on Florida Real Estate?
The devastating impact that Hurricane Maria has wrought on Puerto Rico’s homes and infrastructure cannot be overstated. In many communities, ninety percent of homes were destroyed or damaged so severely that they have been rendered uninhabitable. Additionally, 100% of electrical power was knocked out. A full two months after the storm, 60% of the island is still without power. The impact of this tragedy on Florida real estate will be major.
The Sunshine State is set for a housing boom as tens of thousands of islanders flee here. Of course, the number of Puerto Ricans who will at some point resettle on the United States mainland is unknown so far, an estimated 156,000 have arrived in Florida according to the Florida Division of Emergency Management.
Bruce Elliott president of the Orlando Regional Realtor points out that the state’s heaviest concentration of Puerto Ricans dwell in central Florida, and that should serve as a magnet for many of the refugees. Elliott points out that central Florida is already in the midst of a severe housing crunch and lacks affordable housing options at price points below $300,000 – rents in this region average $1,200.
Currently, refugees (Puerto Ricans are U.S. Citizens) are receiving short-term relocation assistance, such as hotel vouchers. Additionally, the federal government has approved Florida and New York to receive aid to help support Maria evacuees who wish to temporarily relocate.
Elliott worries about the ability of the refugees to build a sustainable life in the state: “There are inventory issues here in Florida, so there are questions of where they’re going to live when they get here, how they’re going to afford rent or a mortgage, how will they qualify for a mortgage, and how about Jobs? Where will they work? ”
While Elliott readily admits that it’s going to be tough, he is asking the 12,500 members of his association to be prepared to help the displaced Puerto Ricans who arrive on our shores. “We need to look and understand where there are [smarter] opportunities for housing That may mean asking current clients about opportunities to rent their houses to refugees.”
As referenced earlier, affordability is going to be a major concern. Elliott has been urging the realtor community to make donations to the Realtors Relief Foundation. The RRF gives 100% of its donations directly to the victims of natural disasters to help defray housing costs, including mortgage and rental assistance.
Noting Hurricane Irma’s damage to Florida in September, he adds that, “So many people have helped us; we want to help too. We have licensed realtors who are ready to help.”
But what of Irma’s impact on real estate prices? In the immediate aftermath of the storm (the first 2 weeks) prices fell during the cleanup according to Maria Pappas of the Miami Association of Realtors. “But as the storm passes and things are getting back to normal, people want to get on with their lives.” "
We tend to see people expedite their situation, expedite their decision making," Pappas said. "A seller on the fence is going to jump off the fence. A buyer on the fence is going to say, “You know what, maybe not the time for me, [or on the other hand], you know what… this is actually a great time.” There is a lot of opportunity out there - I am ready to make the move." Some smart money will bet that in the aftermath of a storm is a time when some sellers may drop prices. Yes, this may sound a bit harsh – but the market operates on matters other than those of the heart.