Area Weathers Tropical Storm Ernesto – Will It Affect Real Estate Market?
A hurricane threatens… but there’s no hurricane, just tropical storm winds and rain. Residents of Palm Beach County may have forgotten that this scenario happens more often than a severe storm.
At least, we’re getting enough practice at it that it has become a routine… get supplies, button up, hunker down, and prepare for the worst. It’s a safe plan. And fortunately, today, it’s just an inconvenience that is not much worse than a northern blizzard (although far more comfortable).
So how will this affect the local real estate market? I doubt one particular storm will have much of an effect one way or the other, and everyone reacts differently. But in general, I think Ernesto will have more of a positive effect on the market short term.
Why positive? I guess because it wasn’t a hurricane. Because there was no damage. And, while we won’t know until November, it is theoretically possible to go an entire storm season down here with no damage. Actually, decades of seasons. Maybe Ernesto is a reminder of that.
We’ve just gone through a relatively quiet summer, with a much more pronounced lull. No, not in storms… in real estate closings. While locally closings were higher in May and June than they were since last summer, as sellers and buyers moved right after the end of the school year, the summer was quiet, with very little buyer activity. That is typical for South Florida. As we go into September, buyer activity should pick up again, more homes should go under contract, and the inventory levels (as measured in months of homes) should be reduced to a more stable level. Hopefully, more northern buyers come down to South Florida later this year to purchase retirement homes.
What is interesting about the market this year is that sellers have (mostly) not panicked. We’re not seeing “panic selling” in the real estate market. There are some investors out trolling for desperate sellers, but most of their low offers are being refused by patient sellers. And there are buyers, who aim to live in the home, purchasing homes at reasonable prices. Not record prices, but prices fairly well in line with the sales prices of 2005. Our median price has been generally unchanged over the past 12 months or more.
There’s no need for buyers or sellers to panic about Tropical Storm Ernesto, either. Tropical storms are just one more thing we need to prepare for and deal with in South Florida, and I’m happy to see we are getting better at it every year.