The Real Story…
News and commentary about the real estate market and related topics.
Dave Parrish, ABR®, CSP, GRI, ePRO®,REALTOR ®, RE/MAX MarketPlace
The opinions expressed here are my own and don’t necessarily represent those of RE/MAX International.
Tornado impact will still be felt in months to come…
As the tornados ripped through our community during the early morning hours of January 23rd, they not only killed two but also wrought much damage and impacted many families directly in the loss of property including the total destruction of more than 200 homes. In viewing the devastation of the storms, it truly seems a miracle that no more than two were killed by their indescribable power, which caught so many in the middle of their sleep.
The immediate response by members of our community to help wherever possible was not a surprise…. Nor have those efforts and prayers ceased. While the immediate needs of those directly affected may be for the most part met, we are a long way away from recovering from those storms and feeling the end of the ripple effects they will have on our community in the months to come.
While certainly not trying to minimize the emotional impact that these storms have had and will continue to have, there is also a significant impact on the local real estate market. The most immediate of those is the impact on rents.
Pressure on rents has been increasing over the course of the last several years as the impact of the economy has spread to so many families moving them from homeowners to tenants. With occupancy rates already in the 98-99% area, we have seen a slow but steady increase in almost all rental prices. The added pressure from those families most directly impacted by the storms (either by the fact that their homes were totally destroyed or significantly damaged making them uninhabitable) will put even more pressure on rents, which will most likely rise quickly and then be much slower to a return to “normal” levels.
A second impact is that not all homes destroyed or significantly damaged will be rebuilt or repaired within a sufficient time frame to save them from further deterioration or destruction. This will occur for two major reasons. First is the issue of non-insurance and under insurance of homes and secondly because the payoff for some homes will be seen as an opportunity to move-on to greener pastures.
Those vacant lots left behind (after they are cleared of debris) not to mention the loss of vegetation will become a blight on some neighborhoods that could drop the market values of homes in those neighborhoods significantly. With that possibility in mind, I do hope that the powers in charge will keep a watchful eye out for abandoned properties and develop some plan for the re-greening of the affected neighborhoods.
On a more positive note for those not impacted by the storms who are looking to sell: You should note that on the day the storms struck we were near a five year low of homes on the market. We are now facing a potential increase of persons looking to buy within from sixty to ninety days out. While this increase in demand may not necessarily translate to a higher market price, it should aid in producing a potentially quicker sell of your property, as long as you follow all the other rules of making your property move-in ready and attractive to prospective buyers.
May the market be with you.
