Hurricane Michael Real Estate effects

Comments from Gregg

About a year ago I wrote a letter about our experience regarding Hurricane Irma. I pasted it below. This year Gail and I were in North Carolina at Otter Cottage in Murphy as Hurricane Michael devastated part of the panhandle of Florida and other areas of the east coast. We were glued to the live stream on our computers as we relived our own experience for Irma.

At the conclusion of the letter on post Irma below, I talked about what I thought the effect of Hurricane would be on the real estate market. That letter was read by the CEO of Eco Homes.   What I said then applies even more now.

Last September the CEO called me and asked me to come visit him in Orlando.  He told me they were already building what my email below had predicted the market needed.

Now fast forward one year.  Eco has closed on about 30 Hurricane Proof, Solar powered (with battery backup)  homes in the Orlando area and has another 30 or so due to close this year  with over 100 in the works. Last year I invested in the company and started acquiring lots for  them to start homes here in Lehigh Acres, Cape Coral and Northport. Eco Homes now has over 100 lots in various stages of due diligence or permitting here in our market area. I now consult for them in land acquisition and marketing. 

Also during  past year a large hedge fund has invested in the company and Eco Homes is  about to make an announcement that a major Florida builder has also bought into the company and will take over management of construction

{FirstName}, These homes just make simple sense. They are high end, "jewel box" ( smaller, efficient, and high quality) homes, smartly designed and made to withstand hurricanes and generate their own electricity.

CHECK IT OUT

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Here is last years letter with some edited comments from me today in RED:

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It has been one week since Irma hit Southwest Florida and 13 years since Hurricane Charley roared through Florida. Right after Charley we had a spate of smaller hurricanes, but essentially we have gone 13 years without a major storm here in Southwest Florida.

Until last week.

As I sit here on my back porch on my laptop I hear the din of generators in the neighborhood, most homes still with without electricity. (We never lost it at our home).  It is odd that this is one of my most vivid memories that I have from Charley:  The noise of the generators.  I didn’t remember the fear I had or the feeling of helplessness when looking at my family in my home and feeling responsible for their well-being as we were told that the storm surge could reach 15 feet. (We heard that during Charley as well)

It’s one thing to be responsible for my wife and I – I thought I could handle that. But add grandkids and other family members and the pressure mounts,

Gail and I decided that the two of us would “Shelter in Place”. The rest of our family had thankfully either evacuated, were already out of town, or had made their own decision to shelter in place.  As for Gail and I, we  had a completely boarded up house, built with 2x6 frame in 2005 to updated hurricane codes, a generator, gas, and lots of food. Our elevation is 13.5 feet plus a few feet above that to our raised slab.   

As the storm shifted east however, the mandatory evacuation included most of Cape Coral and indeed our immediate neighborhood, But the the shelters were full, we didn’t want to get stuck in the storm in our car, in a flood, we wanted to be here to protect out home if the  floods did rise, and we felt that we could always vertically evacuate (go upstairs).

 We decided to stay. Then Gail’s daughter called – she was on her way from evacuating Cape Coral (fully 6 feet below us).  I am glad they came – we went thought his life experience together.

I was posting a sort of diary as the storm came through on Facebook, You may find some of the posts interesting. Then I would like to make some comments related to real estate.

As we prepped

Practice in our Safe Room

Day Before the hit

A walk to the River with video just before the hit

The last pre storm meal pic

Getting ready to go into the Safe Room

The experience was an emotional roller coaster: from fear to anger to relief; from stress to resolution to dis-belief.  In my opinion Charley was much worse for Southwest Florida. But Irma’s flooding was worse – not from storm surge as predicted – but from sheet flow. We had no flooding near us – but Lehigh and Bonita took it hard, in fact because of sheet flow water is still rising a week later in some areas.

Gail and I are glad we stayed. Our yard was a mess, some very minor damage to the house, but we were able to help others and in fact are still home to a few displaced persons with no power (we never lost electric power) – we are one of two homes in the entire neighborhood with electric –  this is the luck of the age of the house and the fact that the power comes from the rear, underground, not through the heavily treed neighborhoods,  I have spent the week either cleaning up here of helping.  Gail and I decided that hurricane are better suited for the young and physically fit. It has been an exhausting week.

 

Some of things I have been thinking about,  real estate wise:

Some folk will decide to leave the area.

          Even though it has been 13 years since the last major event, people are scared. I predict there will be more home listings in the coming months.

Others will trade up to hurricane resistant homes. WE ARE SEEING THIS IN OUR MARKET.

Elevations will become more important to buyers. There are thousands of homes that were not in flood plains and therefore were not required to have flood insurance. (Like in Texas for Harvey). I am rarely asked the elevations of a home by a buyer.  That for sure is gonna change. WHEN I BUY LOTS FOR ECO i LOOK FOR THE FOLLOWING FACTORS:
1. ELEVATION
2, PAVED ROADS
3. UTILITY POLES
4. HOUSES IN NEIGHBORHOOD
5. PLATTED BEFORE 1972
6. LOCATION


Flood insurance will be bought even if not required by the lender. This will decrease the amount of house some people can afford to buy. I DO NOT HAVE  CURRENT DATA ON THIS BUT ANECDOTAL EVIDENCE TELLS ME THIS HAS HAPPENED AND CONTINUES

Demand for Impact Windows will beat the heck out of hanging shutters. This will increase the cost of a new home. CAN DO, BUT THERE ARE OTHER ECONOMIES.

Prices will drop in the short term. Especially for older homes. FOR SURE

High-rise condos did well. Look for a rise in demand and prices for riverfront condos and other high rises.  I HAVE NOT SEEN THIS HAPPEN

Sewer over septic systems, city water over wells.  Floods in areas have made well water undrinkable. This is especially true in areas with septic systems. DEMAND FOR SEPTIC AND WELL WATER - OFF THE COMMUNITY GRID HAS BEEN HIGH.. I WAS WRONG ON THIS ONE.

Demand for back up power systems and rolling shutters will increase short term. I NOW SEE THIS AS LONG TERM  

Houses will be built smaller and safer. TAKE A LOOK AT ECO HOMES