Metros Struck by Hurricane Ian Showing Home Sales Resiliency

According to a new report from Redfin, listings of homes for sale in the Cape Coral-Fort Myers, Florida metropolitan area have recovered after dropping in the wake of Hurricane Ian last fall, and sales have begun to bounce back.

In the two months after the devastating September 2022 storm, there were 900 fewer new listings in Cape Coral-Fort Myers than there would have been had the storm not hit, according to Redfin projections. But in the six months after that, there were 1,314 more new listings than projected, more than offsetting the shortfall. The metro had gained 415 more new listings than it had lost by early May.

CoreLogic estimated that the damage and loss totals from Hurricane Ian rose to between $41 billion and $70 billion, an estimate including wind loss, re-evaluated insured and uninsured storm surge loss and newly calculated inland flood loss for residential and commercial properties. Hurricane Ian is the costliest Florida storm since Hurricane Andrew made landfall in 1992.

New listings in the Cape Coral-Fort Myers region are likely outperforming expectations due to a backlog created by Hurricane Ian, as homeowners who paused their selling plans or delisted their properties in the wake of the storm are now putting their homes on the market. There are likely other homeowners who didn’t intend to sell before the storm, but are now moving because their home was damaged and/or they want to live in a safer area.

“Intense storms are becoming more frequent in Florida due to climate change, but homebuyers are still moving to the Sunshine State in search of warm weather and relatively affordable home prices,” said Redfin Senior Economist Sheharyar Bokhari. “But as homebuyers have moved into Florida, insurers have moved out, leaving homeowners with fewer and more expensive coverage options. Ultimately, lower-income residents may be pushed out of the riskiest areas due to rising insurance and rebuilding costs. Those who can afford to remain will likely see their home values appreciate at a slower clip as the dangers of climate change become impossible to ignore.”

Insurers aren’t just leaving flood-prone areas; State Farm and Allstate recently announced they will stop issuing new homeowner’s insurance policies in California due to climate risk, citing increased exposure to catastrophes including wildfires.

Redfin’s analysis focuses on home listings, but it’s worth noting that scores of vacant plots have also hit the market in Cape Coral after the homes atop many of those lots were destroyed. There were 6,167 land listings in Cape Coral as of June 16—comparable with the number of home listings (6,619). While some people who moved to Florida during the pandemic are leaving, new out-of-staters continue to move in, which is incentivizing homebuilders in Cape Coral to keep building, according to local Redfin Premier Real Estate Agent Isabel Arias-Squires.

The Sunshine State has issued approximately 80,000 residential building permits to date in 2023—more than any other state but Texas. Arias-Squires noted that new-construction homes in Florida have the advantage of being built under the most recent building codes, providing better resistance against natural disasters.

Redfin’s study notes that in the three months after Hurricane Ian, there were 723 fewer home sales in Cape Coral than there would have been if the storm not hit, according to projections. In the following five months, there were 538 more sales than projected. That meant that by early May, the sales shortfall had shrunk from 723 to 185.

“The storm’s effect on prices was likely muted because at first, new listings fell, which pressured prices to rise due to a shortage of homes for sale. But new listings then more than recovered, which pressured prices to fall because there was more supply than usual,” Bokhari said. “In the end, the two effects canceled each other out.”