September 2017 was an anomaly for the Palm Beach County real estate market, with Hurricane Irma the prime culprit for the steep decline in both overall sales volume and median prices. While Median Home Prices clocked in at a healthy $340,000 in August, September’s median prices retracted to $325,000.
But the astute homebuyer doesn’t care about the median home price for September. Instead, let’s use this month’s report to focus on the risks that sudden and extremely dangerous hurricanes like Irma pose for homeowners – not just now, but for decades into the future.
Hurricane Irma’s impact on the Palm Beach County real estate market
Hurricane Irma was an incredibly dangerous storm, at one point looming just north of the Caribbean Islands, seemingly on a dead-straight collision course with South Florida. That was about four days before the massive Category 5 storm was expected to be on our doorstep.
We had already witnessed the catastrophic damage Irma caused the U.S. Virgin Islands, including the report that country star Kenny Chesney’s private vacation home in St. John was demolished.
It was looking like we were about to face the worst hurricane to hit Palm Beach County since the 1920’s, and Irma was bigger, stronger, and faster than anything meteorologists have ever seen in their lifetime.
And then it veered northwest. Though Irma’s winds leveled the Florida Keys, and caused extensive damage throughout South Florida, we were relatively lucky here in Palm Beach County. The worst of it was that we lost tons of trees, and the power grid was knocked out for a few days.
The real estate market came to a screeching halt, as lenders and title companies hit the pause button on any real estate transaction that was in the closing stage. The lenders, of course, want a chance to make sure the home wasn’t damaged before they would allow transaction to proceed.
That explains the 30% drop in Closed Sales Volume from this time last year.
So once again, Palm Beach County homeowners and residents lucked out. But what happens when we don’t?
Lessons for homeowners and investors from this past hurricane season
This hurricane season was the most active season on record in history for the continental United States, according to climate scientists, and it culminated with Hurricane Irma. It was like living in a movie. And it was scary.
Homeowners across South Florida were woken up to the realties of living in paradise. We groan each year when we receive that insurance bill, but this is why we pay it. Your various insurance policies are in place to protect your assets in case a storm tears up your home. Your most common insurance policies are:
- Homeowner’s Insurance – insures the structure of your home up to a policy limit, and optionally, the possessions and valuables inside your home
- Hurricane/Wind Insurance – protects from losses sustained in hurricanes, tropical storms, or high winds
- Flood Insurance – insures for damage caused by rising waters
Depending on where your home is located, you may be required to purchase some or all of these policies. If you own your home outright with no mortgage, you may not be required to hold any of these policies.
Studies have found that many homeowners are underinsured, and don’t even realize it. It’s going to be a bad day when we do get hit with a Cat 5 storm, and people come to find that they hadn’t ever bound their insurance policies adequately enough.
For example, many homeowner’s don’t own a flood insurance policy, because they are not in a flood zone. But just because you are not required to buy it does not mean you don’t need it. As water levels around the world rise, and oceans become warmer, storms are getting bigger. And bigger storms mean more water.
If a big storm suddenly hits and dumps far more water than we expected, water levies are put under pressure and could buckle and fail. A scenario in which all of eastern Palm Beach County is swamped under four feet of water from a larger-than-expected storm surge is not unimaginable.
Talk to our one of our Realtors if you don’t currently have flood insurance. Our preferred partner for insurance is Glenn Karanick with Insurance Express in West Palm Beach. Flood insurance is not expensive; it’s peace of mind.
Related Posts about Hurricanes and Real Estate
Check out these tips from title and closing attorney, Adam Seligman, Esq. on what homebuyers need to know if their deal is halted because of an impending storm.
Our Realtors give our best tips for preparing for a major storm to protect your family, your home, and your assets.
Learn more about the importance of homeowner’s insurance, and why you need to have it at all times to be prepared for anything.
August 2017 Single-Family Real Estate Market Stats
|SINGLE-FAMILY HOMES||SEP 2017||SEP 2016||PERCENT CHANGE|
|Median Sales Price||$325,000||$316,000||2.5%|
|New Pending Sales||927||1,508||-38.5%|