Hurricane Michael will transform real estate market

Dated: 11/01/2018

Views: 228

PANAMA CITY — One after the other, the Facebook messages poured in.

“Two adults and two kids looking! No pets. Under $1200 month for everything;” “3 bedroom 2 bath needed. We have guinea pigs and a small dog. No location restrictions. If needed we will even take a 2 bedroom;” and “We have 3 people, one bathroom is plenty. We also have a cat we are grateful to whatever is available. Preferably three beds.”

Eighty-five families who lost everything to Hurricane Michael responded to a post by B Cody Shields, owner of the fledgling company Think Real Estate, where he offered to match the displaced with available rental units. People on both sides of the equation, he wrote, should post what they need or what they have in the comments.

What didn’t pour in though were posts about available rental units. The list was decidedly lopsided.

“I’m doing my best,” Shields said, who noted he has had some successes. But he also reluctantly conceded, yes, “it’s overwhelming.”

Hurricane Michael simultaneously devastated the local real estate market and set the stage for the most robust real estate market the county has seen in years, according to real estate agents.

The canopy of trees that set the area apart mixed with the 155-mph winds Michael wrought has created a housing crisis in the community. Apartment complexes were devastated, with windows blown out, roofs torn off and walls crumbled. With many properties now unlivable, mass evictions were issued. Homes didn’t fare any better, with trees crushing through them and widespread storm damage.

Parker officials are estimating that 60 percent of the housing stock in their city will be uninhabitable. That’s 60 percent of that community that will be displaced — and right now, places to put them don’t appear to exist within the county.

“We just don’t have enough places for people to rent,” said Karen Key Smith, with Beachy Beach real estate. “My phone has rung off the hook all day, and I’m getting a lot of Facebook messages saying ‘can you find this family a home?’ It’s sad to me to think about people not having a home, but there is only so much we can do.”

Nathan Lawrence, a real estate agent with Keller Williams Associates, estimated that for the next six to 12 months the real estate market is going to stall in Bay County. The supply of non-damaged homes simply won’t be there for people to buy and people will be waiting for insurance money before making decisions, agents said.

“It’s going to be similar to what happened with the condos after (Hurricane) Opal,” said Keith Hodges, with Counts Real Estate. “You could not sell them ... but once the insurance was settled, the market exploded.”

A stalled market isn’t the same as no market. Many deals in the works before the hurricane still are going through, the agents said. They also are fielding requests from people looking to make cash deals and from people who are looking to sell their house and get out of Bay County for various reasons. One possible exception is the market in Panama City Beach, which already was strong before the storm and avoided most of Michael’s damage.

Predictions of a stalled market aren’t unanimous.

Tom Neubauer of ERA Neubauer Real Estate, for one, doesn’t expect to see the market take a hit, noting that both military bases staying open should serve as a steadying influence. And as rental units and homes with minor damage are repaired, he anticipates they will move very quickly.

All the agents agreed, down the line a robust market is going to develop — the best the county has seen in years.

Investors looking to build new properties in the county already are contacting real estate firms, multiple agents said.

“Overall, you are going to see a spike in new construction,” Lawrence said.

And then, once there has been some time for insurance claims to be sorted out and repairs to be made, the market is primed to “explode” as Hodges put it, likely in favor of the sellers.

The shortage is “going to drive up the price,” Shields said. “It’s classic supply and demand.”

The damage also will push more houses and rental units that were grandfathered in previously to be brought up to code, improving the quality of the housing stock. Shields said that’s a step that would have taken “a long time” if not for the storm.

Plus with insurance money and repairs, Lawrence said many homeowners are “going to be in a better position with more equity to sell.”

In other words, this could end up being a time where many homeowners decide it’s time to upgrade to something larger as they will be able to fetch more on the market for their current house.

“It’s going to be really tough,” Shields said.

And right now, for many people the future robust market still is far away as they deal with the immediate search for a place close to their work, children’s school, etc., in communities where much of the housing stock has been decimated.

“It’s going to be like ripping off a Band-Aid,” Shields said. “It hurts a lot at first. It’s going to put a lot of people in an uncomfortable situation. But eventually, the housing market and the economy will be way better off.”

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