How Have Hurricanes Ian & Nicole Impacted Real Estate In The Daytona Beach Area?
Most of us were impacted by Hurricane Ian & Tropical Storm Nicole in some way; if not directly impacted, you certainly have family, friends, or co-workers that are still dealing with the aftermath. As we continue cleaning up and rebuilding, a lot of people may wonder, how will these storms- or any storm for that matter- impact real estate in our area.
Hurricanes are an inevitable threat to life in Florida. They always have been and they always will be, but they’ve never stopped people from flocking to the Sunshine State. Florida remains one of the most popular states that people move to from other parts of the country- hurricanes and all. Historically speaking, there’s a brief period after a storm that temporarily slows migration to the state while the storm is still fresh in people’s minds, but real estate quickly rebounds, and home values continue to appreciate.
But these two storms were different in a few ways. Firstly, the sheer size of these storms and the financial impact they both had. We’re far from knowing the total damages, but experts agree that Hurricane Ian will be among the most costly hurricanes to ever hit the US. It made landfall in one of the state’s most expensive markets and then proceeded to cross the state on the I-4 corridor, impacting millions of homes. And then, just 43 days later, Volusia County experienced unprecedented damage to our beaches from Tropical Storm Nicole, with initial estimates at $481 million.
And it comes at a time when the state is already facing a major insurance crisis. At least a dozen insurance companies have either gone out of business or pulled out of the state since 2017, forcing thousands of new policies to Citizens Insurance, the state-funded insurer of last resort. In 2022, Citizens saw a 50% increase in new policies.
During a special session last month, lawmakers passed legislation to reduce litigation and steer more policies into the private market and are hopeful the changes will have a positive impact on the insurance industry. So how will this impact you as a homeowner? It means that you can very likely expect homeowners insurance to go up yet again. Experts expect more carriers will pull out of the state and are predicting insurance rates to increase by 30%-50% in the next 12-18 months. We also expect much tighter requirements for financing oceanfront condos in the future. We were already seeing some changes in condo financing with a new requirement that the building meet certain structural engineering certifications, and those requirements will certainly tighten even further after Nicole left her mark.
So while it’s still too soon to know the full scope of how these storms will affect us here in Volusia County, history tells us the real estate market won’t necessarily take a hit as a result. Any slowing in the market will be temporary, people will factor in the cost of insurance when purchasing, and building standards will be revised. As in the past, we will recover from the storm- and good or bad- people will soon forget the damage hurricanes can cause. Our community is resilient and our area will bounce back just as it has in the past.